Nokia to target businesses as European consumer markets reach saturation

9 Sep 2003

Leading handset manufacturer Nokia [NYSE: NOK] is preparing for an about-turn in its business strategy, as handset penetration in its core western mobile markets reaches saturation point, according to the Financial Times. Whilst emerging markets, such as India, are being used to plug the deficit, Nokia realises that this may not be enough to sustain its double-digit revenue growth and looks set to announce a radical move into the burgeoning enterprise market. The new business will be conducted through Nokia Enterprise Solutions (NES), which will sell handsets and systems to large organisations, and sit alongside the vendor’s two main existing divisions: handsets, which targets consumers, and the operator- focused infrastructure division. NES is the product of the merger of three of Nokia’s existing divisions: mobile email provider Nokia One; its business handsets arm; and California-based Nokia Internet Communications. Nokia will be entering into a highly competitive market, up against the likes of Oracle, Hewlett-Packard and Microsoft, but also a potentially lucrative one: enterprise contracts are currently worth USD70 billion annually and predicted to grow by 40% each year for the next three years.