We covered about Nokia’s strategy as mentioned in their press release. Now, we have Nokia Q1 earnings call transcript as well and it again highlights the long-term strategy of Nokia. It looks like Nokia is eying the “Internet of things” opportunity with great interest and considers it as a great opportunity for all three businesses:
And when we take a step back and consider the future of technology, it is clear that there are opportunities for a strong Nokia. All the changes in technology that we have seen in recent years, from lower cost computing and connectivity, to better network, cloud-based data and processing power. The increasing ubiquity of sensor laden smartphone and other devices are starting to come together and create something much greater than sum of those parts.
That something has been called the programmable world by some. And we like that dome. It is a world where physical objects of all kinds; cars, TVs, medical devices, wrist bands and more will have build in computing power, sensors and connectivity. These objects will become bound together with intelligence built on vast amounts of data that is processed in the cloud and used to automate and simplify, to creates new services and to improve people’s life’s in many areas.
Lots of things will be required to enable this world, including connectivity capable of handling massive numbers of devices and exponential increases in data traffic. The ability to make the real and virtual worlds with location intelligence as well as new innovation of areas such as sensing, radio and low power technologies.
For Nokia this means opportunities for all three of our businesses. It is now up to us to tap that potential. To do that we will focus on developing our three businesses, networks, HERE and technologies in order to create long term shareholder value. We intent to optimize the company so that each business is best enabled to meet its goals. Where it makes sense to do so; we will pursue share opportunities between the businesses, but not at the expense of innovation and focus in each.
Coming to businesses, while it seems Networks is and will be the real money-making business, HERE is considered to be the growth engine and enjoys a distinct place in company’s strategy. Nokia is not prioritizing near-term profitability for HERE, but rather thinks future growth is the key.
For example, we are leveraging automation in our map creation process to improve our R&D efficiency but to be very clear we will not manage the business with the top priority on near term profitability as we believe building for future growth is a better path to shareholder value. The opportunity to create further value for Nokia shareholders through technologies is both significant and absolute priority for us.
HERE’s special place is also confirmed by the fact that only it has a distinct identity in Nokia Family,
Consistent with the planned structural changes announced today, Networks (formerly Nokia Solutions and Networks, or NSN) and Technologies will operate under the Nokia brand. HERE will retain its distinct identity within the Nokia family and, where appropriate, will be identified as “A Nokia Company”.
HERE is coming to multiple customers in multiple industries across different operating systems, platforms and screens as confirmed in both press release and call transcript.
HERE is differentiated in two clear ways. First, we are the industry leader in advanced telematics delivered through the cloud. This is a critical building block for the next generation of location services and thus a strategic focus area for our customers. And second, unlike our main competitor HERE has a very flexible business model which enables HERE to bring the benefits of location intelligence to multiple customers in multiple industries across different operating systems, platforms and screens. Over the course of 2014 our focus will be on making the right near term investments to capture the longer term transformational growth opportunities we see. We already have the world’s best map and we will invest to build further strength in technologies for smart connected cars, cloud based services to personal mobility and a wide range of device types and location based analytics for enterprises.