Career Rise at Nokia

1980-81: Corporate Counsel at Nokia
1987: Assistant VP
1990: Group Executive Board/Senior VP Finance
1992: CFO, EVP Nokia Americas
1999: CFO
2004: EVP Mobile Phones Unit
2005: President and COO
2006: President and CEO
2006: Group Executive Board Chair

Born in Lavia, Finland, Kallasvuo graduated with a law degree from Helsinki University and joined Nokia as corporate counsel in 1980 after a position in the banking sector. Other than a short sabbatical in 1981, Kallasvuo has spent his career at Nokia in various executive positions including heading up the mobile phones business unit and the position of CFO (see sidebar). CE Vision had the opportunity to ask Kallasvuo a few questions before the International CES.

What accomplishments are you most proud of since you took over as CEO in June?

The second half of the year has been an incredibly dynamic period for Nokia. We announced our plans to merge Nokia's networks business and Siemens' carrier related operations, we have re-focused our CDMA operations, and we completed the acquisitions of both Loudeye and gate5. These moves reflect that the industry is changing and that Nokia is changing with it. Internet mobility and convergence are the key drivers behind the next phase of our development.

What is your vision of the future of mobility?

The future of mobility is all about realizing the exciting potential of digital convergence; combining mobility and the Internet. During the past decade, we have seen enormous change and growth in mobility, and we now expect the 3 billion subscriptions mark to be reached in 2007. Many of these new subscribers will access the Internet for the first time from their mobile phone. And, as today there are approximately 850 million Nokia phone users out there, we are better positioned than any other company to bring Internet mobility to the mass market. This represents a significant business opportunity for Nokia, and we actively are aligning our strategy in pursuit of this goal.

What's the significance of UMA technology and is it taking off?

Complementing an operators' cellular network coverage with unlicensed wireless technologies, such as Wi-Fi or UMA (Unlicensed Mobile Access) opens a new range of opportunities for both consumers and operators. It allows consumers to enjoy the benefits of better indoor coverage using Wi-Fi radio access, and for operators it's a cost-effective way to expand cellular coverage places where it might be too difficult or expensive to provide indoor cellular coverage.

Whether connected to the cellular network or in a Wi-Fi hotspot, consumers can communicate using their UMA handset, such as the Nokia 6086, and a regular mobile phone number. Once the user ventures outside the range of the Wi-Fi, the handset automatically switches to the cellular network, and the voice call or data session continues without interruption. The same scenario applies in reverse. Orange, one of the world's largest mobile communications companies, is an initial customer for the Nokia 6136 UMA-enabled device, and we look forward to welcoming others.

The technology landscape continually is evolving, and new multi-radio technologies are emerging all the time. Just last month, for example, Nokia announced a new short range multi-radio technology called Wibree. It complements other local connectivity technologies and consumes less power, thus enabling smaller and less costly implementations.

What are Nokia Flagship Stores?

The Flagship Stores are about broadening the appeal of the Nokia brand while inspiring and educating consumers on the benefits of mobility with an innovative, comfortable, cutting-edge retail experience. To date, we have opened a total of six stores around the globe, and feedback has been fantastic. Our very first store opened in Moscow in December of 2005, and since then we have opened stores in Hong Kong, Helsinki, Chicago, New York, and most recently-just in time for the holidays-Mexico City.

What role does design play?

Product design is, of course, very important to Nokia, and our philosophy is simple-observe, then design. And our goal is to design simply beautiful products that people fall in love with. In an industry that tends to focus so much on technology, our approach to design is a very personal one-it's about simplicity, relevance and enhancing consumers' mobile experiences. This is why our design team includes social anthropologists, trend spotters and researchers in addition to technology specialists and designers.

Our design organization currently is undergoing a transformation in line with some new strategic priorities we have set. Among other changes, we are opening two new design studios, one in London and one at Nokia headquarters in Finland. We want an office in London so we can attract the world's best design talent and be at the center of one of the world's great trend-setting cities. The idea behind the office at headquarters is to bring Nokia management and designers into an even closer daily dialogue. This is very important from a product development point-of-view.

Will Nokia's N92 mobile TV device be released in the U.S.?

Just as Nokia has spearheaded the liberation of other previously fixed or single purpose experiences-imaging, music, browsing, e-mail and beyond-likewise, we are blazing the trail for mobile digital television. With trials and early commercial deployments of DVB-H well underway in markets across the globe, Nokia will bring the mobile digital television experience to a range of devices, starting with our flagship Nokia N92. Nokia is poised to deliver DVB-H devices once networks and service plans are further developed in the U.S. in 2007.

How important is China to your global strategy?

China is an extremely important market for Nokia and, in fact, was our number one country in terms of net sales last year. We have a long history there, and Nokia is a strong contributor in terms of local investment, funding and resourcing.

The mobile industry has grown massively in China in recent years, and there is still a lot of growth potential remaining. At the end of the third quarter of 2006, there were 426 million mobile subscriptions there, representing 32 percent penetration. We expect that by 2010, China will have added another 160 million subscriptions, and that in the same period the ratio of replacement buyers is expected to grow from 60 percent to more than 85 percent of the total device market volume.

 The anticipated growth of the replacement market is another positive sign for the adoption of mobile services in China. Internet penetration in China is only around 10 percent, and the mobile phone represents a great opportunity to become the primary information and computing device and, for many, a device on which they will have their first Internet experience.

You've recently expanded your R&D organization in Silicon Valley -what is the significance of that to Nokia and the industry?

We increasingly are taking an open innovation approach to our research activities, working in collaboration with top universities and other innovative companies. This is a key driver for opening our Silicon Valley research center in Palo Alto. Silicon Valley in many ways is the pulse of Internet innovation, and as we are seeking to enhance our strategy with even greater focus on Internet based technologies, applications and developments, our activities in Silicon Valley will continue to make a significant contribution.

Nokia

Early Roots: 1865 - founded: 1967
Headquarters: Espoo, Finland
Revenues & Profits: EUR 34.2 billion (2005)
Operating Profit: EUR 4.6 billion
Employees: 58,874 (2005)
Global Facilities: 14 countries
Stock: Helsinki, Stockholm, Frankfurt and New York exchanges
Joint Ventures: 14
R&D: Centers in 11 countries
Top Competitors: Ericsson, Motorola, Siemens AG
Philanthropy: Includes UNICEF, the United Way, employee matching gift program
URL: www.nokia.com. V

by Cindy Loffler Stevens
January/February 2007