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Nokia seeks to reconnect with the US market

Nokia seeks to reconnect with the US market

By Kevin J O'Brien, New York Times | Updated: 5 June 2012 02:25 IST

Highlights

Mary T. McDowell, a 46-year-old Chicago native, is acutely aware that her employer, Nokia, the mobile phone maker from Finland, has a lot of work to do. The task is particularly daunting in the United States, where Nokia shows little of the swagger of a

Mary T. McDowell, a 46-year-old Chicago native, is acutely aware that her employer, Nokia, the mobile phone maker from Finland, has a lot of work to do.

The task is particularly daunting in the United States, where Nokia shows little of the swagger of a global powerhouse that sells about 11 cellphones a second. With a skimpy 8 percent share of the U.S. market, according to the research firm comScore, Nokia trails Samsung, LG, Motorola and Research In Motion, the maker of the BlackBerry.

As Nokia seeks to turn around its smartphone lineup to try to compete with the BlackBerry and with Apple's iPhone, the company is also trying to shore up its bulk cellphone business, which accounts for 84 percent of the 432 million devices Nokia sold last year. In July, it put Ms. McDowell, a former line engineer who kept Compaq and Hewlett-Packard atop the computer server market in the 1990s, in charge of its mass-market phone operations.

"People tell me: 'Oh yes, I remember my Nokia device. It was very reliable and very good. I haven't bought one in a while,"' Ms. McDowell said. "So I think the opportunity for re-entry is there."

Ms. McDowell, who in 2004 became the first American hired directly onto Nokia's management board, has taken over Nokia's bread-and-butter business at a crucial time. The company's market lead is under assault, its profit and share price are sliding and its chief executive, Olli-Pekka Kallasvuo, was recently called on to deny speculation that he would soon be replaced.

Long faulted for an insular corporate culture, Nokia is increasingly turning to Americans like Ms. McDowell, who will be relocating to London from Nokia's offices in White Plains, New York, and Jo Harlow, a native of Harrodsburg, Kentucky, a senior executive in the smartphone division, to oversee its global business and reconnect with U.S. consumers. Another American, Richard Green, a former Sun Microsystems executive, is Nokia's chief technology officer.

Asked last week whether Nokia was in crisis, Ms. McDowell, the highest-ranking American within the corporate hierarchy, said Nokia's top managers knew that its trusted recipe for success -- the production of solid, dependable devices for a global mass market -- must become more flexible, innovative and timely. She declined to comment on speculation about a change at the top.

"What I would say is, we have something to prove, particularly at the high end of the product line," Ms. McDowell said. "I think it is a business that has good momentum, but obviously there is more work to be done. There's a richness of innovation at Nokia."

She added that Nokia's problems in the United States stemmed from its failure to work closely with U.S. mobile operators to tailor devices to their needs, rather than from any shortcomings in the phones themselves.

Signs of the new, more urgent Nokia attitude can be seen in Berlin, where 400 Nokia employees work on mapping and location-based services, two pillars of its online services business, Ovi. At Nokia's reception desk in Berlin, a computer screen displayed a tally last week of 120.5 million registered Ovi users, 300,000 more than a week earlier.

Nokia has a goal of signing up 300 million Ovi users by the end of 2011, customers who would also be in a position to buy Nokia mobile services like banking, e-mail or even agricultural education, part of a service called Nokia Life Tools in developing markets.

To make this a reality, Nokia plans to democratize the smartphone, Ms. McDowell said, making it affordable to more people, particularly in emerging markets, by offering premium features like touch screens and enhanced Internet connectivity on lower-end phones. The company is expected to announce some new features for its non-smartphone line this week.

"Consumers across the price spectrum are starting to demand more from their mobile phones," she said. Even when prices are low, "people are looking up at smartphones and thinking, 'What sort of features would be relevant to me?' How do you tie that in a package that is both appealing and the right price? That is the central challenge."

In her 17-year tenure at Compaq and later at HP, which bought Compaq in 2002, Ms. McDowell established a record of defending her employer's lead in the critical server market.

"She consistently drove bold changes that kept us one step ahead with a mantra of innovation on top of standards netting differentiation on a large scale," said James Mouton, an HP senior vice president and general manager, who worked with Ms. McDowell.

Nokia hired Ms. McDowell to oversee its line of business devices, and in 2008, promoted her to chief development officer, responsible for global research and development. Ms. McDowell said Nokia was preparing new features for its mass-market phones, aiming at major markets like China, where it is the market leader.

Some recent pragmatic innovations include the Nuron, a touch-screen phone sold by T-Mobile in the United States for $179 without a calling plan, and the C3, an e-mail device with full keyboard that costs about $100 before subsidies, made for the global market. Last week, hundreds of consumers lined up to buy the C3 at its introduction in Hanoi.

Antii Vasara, a senior vice president for Nokia's Symbian devices who works for Ms. McDowell, said she liked to set clear, precise goals and track results. "When something doesn't go as expected, she has the ability to change and adapt quickly," Mr. Vasara said.

In her new role, Ms. McDowell will have to think on her feet. In the three months through May, Nokia's US market share slipped 0.6 percentage point from the level of the previous quarter, to 8.1 percent, according to comScore. Globally, Nokia remains dominant, with 49 per cent of the market for phones costing less than $100, according to Strategy Analytics. But even there, competitors like ZTE of China and Samsung and LG are in hot pursuit.

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