Nokia CEO Says the Door to U.S. Market is in San Diego

5/28/09

Nokia CEO Olli-Pekka Kallasvuo says San Diego plays a key role in the Finnish mobile phone giant’s plans to stage a comeback in the U.S. market. Kallasvuo was questioned by Wall Street Journal columnist Walt Mossberg at the All Things Digital D7 conference in Carlsbad, CA, about Nokia’s (NYSE: NOK) decline with U.S. carriers. Nokia operates a handset engineering facility in San Diego specifically for the U.S. market and Kallasvuo said, “I’ve been working on this for a long time. And it’s kind of interesting, the idea that we’re in San Diego now; we have about 2 or 2.5 years ago started to make U.S.-market-specific products right here in San Diego.”

Back home in Finland, Kallasvuo famously said in 2006 he wouldn’t sleep until Nokia had improved its position in the United States. Nokia lost its No. 1 rank in the U.S. after missing the trend for clamshell phones and thinner designs. The Finnish company now has approximately 9 percent of the U.S. market, while globally the company’s market share is 35-40 percent. This week Nokia took flak after the debut of its Ovi application store flopped. (Ovi is Finnish for ‘door’)

Nokia cut its workforce in San Diego from 1,100 to 500 in late 2006 when the company retreated from its CDMA operations. Nokia’s San Diego operation focuses only on North America, so there would be handsets designed for the U.S. that exist nowhere else. That is an exception in the company’s global strategy. Last year, Nokia and San Diego’s CDMA giant Qualcomm settled their legal disputes, and in January the two former rivals announced they were cooperating in the development of U.S. mobile devices.

Kallasvuo was showing Nokia’s new flagship phone, the N97, at the D7 conference yesterday. But the N97 does not have a U.S. carrier, and it costs $699.

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