04th September 2013 What now for Nokia?

So now that Nokia (NOK) has bowed out of the smartphone and devices industry, where does the company that's reinvented itself more times than Madonna go from here?


The company is now effectively left with three core business areas, NSN, HERE and "Advanced Technologies", which seems to stand for "Everything Else".


Nokia Solutions and Networks focuses on data networking and telecommunications equipment, operating in areas such as mobile broadband. NSN is expected to shortly receive a contract from Vodafone (VOD) to upgrade its 2G and 3G networks in India and has already won a number of Wi-Fi and other deals there. It has recently opened a new office in Iraq and secured work in Ukraine.


The high sales of its mobile phones allowed Nokia to go on large scale spending sprees and one of the areas it bought into was mapping and location. HERE is its answer to the mapping services of competitors Google (GOOG) and Apple (AAPL) which started out with acquisitions it made back in 2001. Now it licences HERE to companies such as GPS manufacturer Garmin (GRMN) and Amazon (AMZN) as well as powering both Bing and Yahoo! Maps (YHOO). Available across a number of mobile phone operating systems, HERE still has some way to go to displace Google Maps but aims to do so by providing a number of different services such as allowing users to save favorite locations to the cloud so they can be accessed on different devices.


Nokia stated that its Advanced Technologies division will focus on "connectivity, sensing and materials, web and cloud technologies" and also include it patents portfolio. So like I said, everything else. Some of this feeds into the other two areas, such as cloud computing for HERE, but Nokia has always held an impressive array of patents which it has expanded at every opportunity.


If reports that this deal was hammered out with Microsoft (MSFT) in 50 meetings over the last 7 months are true, Nokia's purchase of NSN co-founder Siemens (SI) stake in the company on the 7th of August shows that they had begun to prepare for the new post-smartphone age which would be driven by services and patents.


Nokia will aggressively pursue patents that will allow it to provide services across a number of different platforms, or a very least profit from existing services and technology, while focusing on NSN. The company has already fallen this far by tying itself too close to Microsoft and would be well advised to expand beyond the Windows OS Phone series, which may yet fall by the wayside.



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