Nokia looks to multimedia for future growth

25 Nov 2003

Nokia Chief Executive Jorma Ollila has heralded a new dawn, claiming his company is structuring itself differently to better take advantage of the multimedia era. At a briefing for US investors in Dallas, Texas, Ollila highlighted Nokia’s efforts to transform itself from a leader in low-cost mobile handsets into a technology leader by investing heavily in software innovations. Nokia expects its R&D expenditure in 2003 to total around USD4 billion, up to 70% of which has been channelled into handset software. In recent months Nokia has created a separate multimedia division to specialise in the making of camera phones and wireless gaming devices; the new division is expected to contribute approximately a tenth of 2003 annual revenue.

At the same analysts’ meeting Ollila reiterated earlier forecasts that Nokia’s 4Q results would be slightly lower. He also outlined a long-term target of 10% annual net sales growth, a figure which the market deemed too ambitious to the tune of three or four percentage points, with the company’s US shares shedding 0.6% of their value on Wall Street yesterday.