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FEBRUARY 9, 2004
Can Nokia Capture Mobile Workers? It sees a big, largely overlooked market. Of course, so do rivals Palm and Microsoft Executives at Nokia Corp. (NOK ) see the problem nearly every time they catch a plane or check into a hotel. Business travelers are busily tapping out e-mails on BlackBerrys and downloading Web pages through Wi-Fi connections onto laptops, Palms, and Pocket PCs. Nokia's long-held vision of a wireless workforce is finally starting to take shape -- but not enough of it is happening on Nokia mobile phones. Now, Nokia Chairman Jorma Ollila is reorganizing the Finnish company, the world's leader in cellular phones, to push into untethered business communications. Last fall, Ollila created a new Enterprise Solutions Group -- one of four units that will report directly to him. He's setting it up far from company headquarters in Helsinki, in an as-yet-undisclosed site near New York City. And to run the unit, he has reached into Hewlett-Packard Co. (HWP ) and hired Mary T. McDowell, a 39-year-old American and a veteran of the server business. She took over in January -- and plunges into a doozy of a job. It involves developing an entire technology offering, from server software to handsets, and taking on industry giants, including Microsoft Corp. (MSFT ) and HP. Nokia's key in the enterprise market will be software. Analysts say that if McDowell's team comes up with systems that neatly shuttle corporate data to far-flung mobile phones -- while blocking out hackers, thieves, and viruses -- hardware sales will follow. It's here that Nokia has a little-known headstart. Its Internet products group, now part of the Enterprise Solutions, is a surprising No. 2 to Cisco Systems Inc. in the market for corporate firewalls and other security devices. Still, Nokia faces a hard climb. The company's mainstay in the business market is the venerable Communicator, a handheld computer-phone hybrid that has failed to win support beyond the techno-nerd crowd since the first version appeared in 1996. Total sales in that time, according to IDC, barely top 400,000 -- a cipher in the 10 million-unit-per-year PDA market dominated by Palm and Microsoft operating systems. McDowell is planning to catch up in a hurry. Her argument? There's plenty of room for Nokia, a $37 billion powerhouse, in a wireless-data business still in its infancy. The company figures that its potential market, which includes phones and equipment to connect to mobile networks, will grow from $27 billion this year to $43 billion in 2007. "We have the chance to shape a new market," says McDowell. She adds that her unit, which starts out with about 2,000 employees, should produce 5% of Nokia's revenues, or about $2 billion, by the end of this year and break even in 2005. Big dreams for the Big Apple, but Nokia may struggle to make them come true.  By Andy Reinhardt in Paris Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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