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Every company approaches a change of guard with trepidation, and more so if it takes place after a long innings by the incumbent. This perhaps explains the mood of uncertain expectancy prevalent in the corridors of Nokia HQ at Espoo in Finland as the telecom giant prepares for the Jorma Ollila era to come to an end.

Ollila, the architect of the Finnish giant in its current form, is to step down next June- Olli-Pekka Kallasvuo, currently head of the Mobile Phones unit, has already been designated to take over; he becomes the COO and president in October before the grand incarnation in June 2006.

"Each individual has a different personality and style of working," says Kallasvuo to this correspondent, answering whether his style of functioning would be a continuation of the Ollila approach. However, he hastens to add that not much deviations could be expected as he intends to take forward Ollila's legacy with few clear targets in mind- retain the number one position in handsets, while building on Ollila's key strategies of making Nokia software platforms a true rival to Microsoft's in the enterprise, as well as boosting revenue and margins with advanced multimedia devices.

These strategies represent Ollila's second revolution at Nokia; the first was the momentous decision he took to pull the Finnish conglomerate out of all its businesses – which included rubber goods, computers and even bedroom slippers – and focus only on mobile communications. To make this second revolution as successful as the first, Kallasvuo needs to continue on the same broad path rather than making any radical about-turns.

Antti Vasara, vice president, corporate strategy delineates the three principal areas of growth to be targeted in the Kallasvuo era-exapanding mobile voice by driving consumer mobile multimedia, bringing extended mobility to enterprise and making managed network services a principal component of the networks division. "These strategic growth areas are in sync with the life goes mobile vision drawn up by Ollila and expected to continue with Kallasvuo," he says. Even the last quarter results prove Nokia is right on track-sales of mobile phones increased by 20 percent, sales of multimedia by 89 percent, enterprise solutions by 7 percent and networks by 6 percent.

Ollila's legacy to his successor is strong – the company has stabilized again, and the future growth plan, though ambitious, is well defined and reflects Ollila's deep and creative strategic thinking. Now Kallsvuo needs to shepherd this plan through serious challenges, most likely to come from a revitalized Motorola under the maverick Ed Zander-the man many analysts believe is in the process of effecting a turnaround at Motorola almost as impressive as that created by Ollila at Nokia in the mid-1990s.

From Handsets to Multimedia Devices
Mobile devices, no doubt, constitute an integral part of this strategy. There is little doubt that Nokia is the runaway leader in the mobile handset market-the near 40 percent market share is an ample testimony to the fact. However, handsets feature prominently in Motorola's plans of staging a turnaround. Nothing epitomizes this better than its hugely successful slimline RAZR handsets. This is not only the unifying design concept behind most of Motorola's planned high end devices, including music phones and dual-mode Wi-Fi/cellular devices, but also represents the company's desire to become a consumer brand like Apple or Sony, an ambition cherished for the past few years by Nokia too. Its recent alliances with Apple to leverage the success of iPod bears testimony to this.

Nokia has a headstart in this respect, being better regarded as a consumer brand than the old Motorola ever was, but it has not had a single device with the same consumer impact as the RAZR. Its N-Gage games console phone, for instance, was an interesting concept, illustrating Nokia's belief that the handset should become the unified portable device, combining the functions of the music player, business PDA, gaming platform and television. But unfortunately N-Gage never had the impact on the market as desired or expected by Nokia.

However, under the new regime, Nokia looks set to give a second lease of life to its attempt to position itself as a multimedia lifestyle product vendor rather than only a mobile handset peddler. The resounding successes of the 60 Series of smartphones as well as 8800 have given it the initial impetus. Anssi Vanjoki, executive vice president, Multimedia hopes that the impending N Series, particularly N90 and N91 could prove to be the killer devices. With Kallasvuo coming from a position of heading the Mobile phones business, the momentum is expected to continue.

Both these devices are positioned not as mere handsets-N90 is expected to compete against digital cameras as it becomes the first and till now only mobile device to introduce Carl Zeiss optics; the N91 is being projected as a mobile musical jukebox as it enables easy purchase, consumption and synchronization of music thereby pitting it against the existing MP3 players. Seems Nokia is determined not to repeat the mistake it made in 2003 when it failed to spot the boom in clamshell handset immediately and lost share in the US market.

Enterprise Mobility Through Partnerships
Other than mutimedia, Ollila has also laid the foundations for a new revolution at Nokia with the creation of the Enterprise unit-these two seem to be the real growth engines for the company under Kallasvuo. As the margins on devices fall, it will rely increasingly on its software platforms, which it seeks to establish as standards – most importantly, the Series 60 user interface, which Nokia will combine with Java, Linux and various elements such as virtual private networks and push email, to create an enterprise platform to rival Windows in the mobile environment.

Some of Nokia's enterprise solutions have already tasted success in recent times. In EMEA, third party studies indicate that Nokia has quadrupled its sales in the wireless PDA and related business smartphone market last year to more than 20 percent. There were plenty of accolades too-the 9300 enterprise was selected as the "Best Smartphone" in UK and "Best Corporate Device" in Australia, while the IP380 was adjudged the best buy firewall for SMEs. It made advances in Mobile TV this quarter with new pilots in Singapore, UK and Australia as well as launched the DVB-H air inteface specifications.

It has also expanded its future radio technology portfolio by announcing tie-up with Intel to accelaerate the development, adoption and deployment of WiMax. Working closely with Cisco, OnRelay and Avaya, Nokia is also offering more advanced enterprise options for mobile voice, pilots of which have started in H2 of 2006.

Networks Move Towards Managed Services
However strong the focus might be on multimedia and enterprise in the future, it would be naive to assume that network infrastructure business would be ignored henceforth. Particularly, when under Zander much of Motorola's strategy is focused on infrastructure – which is a far larger part of the Motorola revenue base than it is at Nokia – and the ability to offer soup-to-nuts solutions, from handset to base station to IP software, for multi-network convergence and what the company terms 'seamless mobility'. In fact, there is no let-up to the initiative to evangelize WCDMA as the world prepares to embrace 3G.

In fact, Nokia claims to account for 40 percent of the world's network infrastructure currently contributing to 20 percent of its total revenues. In the last quarter only, it signed 21 deals on HSDPA including marquee clients like T-Mobile, Elisa and Wataniya Telecom. Other significant deals at the same time include one with Thailand's DTAC to expand its GSM/GPRS/EDGE network, a 3G core network one with Vodafone in Hungary and an agreement with Finnish Saunalahti to deliver fixed to mobile convergence solutions.

However, Simon Beresford-Wylie, EVP & GM, networks informs there is going to be a perceived shift from being only a network infrastructure vendor to more a managed network services provider. "Managed services currently contributes 25 percent of revenues for the networks division, and this will increase to 50 percent next year"-a view Kallasvuo collaborates. This view is amply proved by Nokia's decision to set up a Global Networks Operation Center in India by the end of 2005. Not only would this center service Indian operators, it would also perform network operation tasks primarily for selected operators in the Asia Pacific region as well as Europe, the Middle East and Africa as part of Nokia's managed services offering.

Currently, Nokia has contracted managed services with 35 operators in 28 countries helping them with the day-to-day tasks of running their networks so they can focus on bolstering their business offerings. All of them will migrate from their existing NOCs to the global NOC to be located in India. Bersoford informs that Nokia has scouted long for the location of the global NOC in India and the choice has now narrowed down to two cities. Though, he refused to divulge their names, he confirmed that the final decision would be made within the next few days.

With its unique Nokia NetAct network and service management system, Nokia is a leader in this growing market. These include milestone contracts signed in Australia and New Zealand, India, Pakistan, Sweden, Taiwan and Ukraine. It manages the network of 8 out of Bharti's 23 circles, the rest being with Ericsson. Other than Bharti in India, the client roster also includes illustrious names like Vodafone in UK and New Zealand, Optus in Australia and 3GIS in Sweden. Informs Beresford, "We are supporting Vodafone in Australia and New Zealand with their total shift from 2G to 3G that will be completed by next year. This has helped Vodafone in not requiring to entirely re-train its personnel for 3G network maintenance." Similarly, 3GIS too has outsourced substantial managed services to Nokia.

Rajneesh De in Espoo, Finland