updated 08:50 am EDT, Tue April 28, 2009
Nokia Shrinks Online Svcs
Nokia this morning took extra steps to improve its finances and said it would scale back the development of its online services. Calling it a new "focus," the Finland-based company plans to draw more heavily on third parties for its image and video uploading rather than depend on itself. It also intends to make better use of its resources and will put all games on the Ovi Store in addition to N-Gage and other front-ends that already carried the software.
In addition to the reduced efforts, the company also warned that it would cut about 450 positions from its internal IT staff as well as its Compatibility & Industry Collaboration group, which handles support for outside services. The cuts are claimed by Nokia to be part of its existing job cut plan, though the total number of layoffs has expanded significantly over the past several months.
Tough economic conditions have been repeatedly cited by Nokia as a key factor in its attempts to improve its bottom line, but the cellphone maker's business is falling faster than the predicted 10 percent for the industry as a whole. Compared to early 2008, Nokia has lost an estimated 2 percent of market share and is taking a particularly hard hit in smartphones, where BlackBerries and iPhones have cut its share of the field from over half to just 38 percent in less than 2 years.
Ovi Store is part of a measure to regain influence on the smartphone market by providing a centralized portal for third-party apps and music not unlike the iPhone's App Store and iTunes Music Store.