Nokia merges handset units

Nokia today said it is overhauling its company structure, combining its three handset groups into a single business unit, breaking out software and services into a new division and creating a special division in charge of Nokia’s global marketing, sales and supply chains.

The restructuring will have the biggest impact on its mobile handsets, enterprise and multimedia units, all of which report their sales, total shipments and operating earnings separately. Mobile handsets form the core of Nokia’s business responsible for the low-end to feature phone devices that are the bulk of its sales. Its fastest growing division, Multimedia, designs high-end feature phones and consumer smartphones, producing its popular Nseries devices. The Enterprise division produces business-oriented devices like the Eseries, and is Nokia’s most under-performing unit, regularly posting quarterly operating losses. Those distinctions are likely to disappear, though, as Nokia will now lump phone shipments and overall revenues into the new Devices group.

Nokia CEO Olli-Pekka Kallasvuo said that the new structure would give new growth opportunities for the division, allowing advanced technologies to be spread throughout its mobile phone portfolio instead of being confined to the specialty Multimedia and Enterprise groups. The strategy seems specifically aimed at Nokia’s biggest weakness. While it is the world’s largest phone maker, its dominance is divided between the high- and low-ends of the markets. The mid-range feature phone market is split between competitors like Motorola, Sony Ericsson, LG Electronics and Samsung, especially in North America.