With a new venture fund and optimistic forecast extension, Nokia set out last week to fortify its already strong position in the wireless communications industry.
Its venture arm, Nokia Venture Partners, launched a new $500 million fund to buoy start-up companies in the mobile Internet arena. And the parent company extended its growth target of 25 percent to 35 percent from 2002 to 2003.
“In the mobile world, the best is yet to come,” said Jorma Ollila, Nokia’s chairman at the company’s global analyst meeting last week in Helsinki, Finland. “The opportunities in the future are enormous as we enter an unprecedented time when mobility, Internet, digitized media and other content can be combined and become available to almost anyone, anytime and anywhere.”
The new venture fund will include third-party investors like Goldman Sachs, BMC Software, CDBWebTech and others and will back more than 25 portfolio companies from the United States, the United Kingdom, Germany and Finland.
Nokia Venture Partners, which has staked its money in such companies as Evoice, Covigo, Categorio, Digital Transit and FusionOne, will also focus on the mobile Internet sector potential in Israel and the Asia-Pacific region.
“As a global player in the investment and banking world, we are excited to work with Nokia as a global player in the mobile Internet,” said Gene Sykes, co-head of technology investment at Goldman Sachs. “With the explosive growth of users accessing the Internet via mobile devices, we feel that the mobile Internet has huge potential.”
The company’s sanguine picture is triggered by its series of plans and projections for the next three years.
Envisaging a market driven by content, connection and consumption, Nokia believes it will benefit from new and enhanced capacity networks, applications and services because of anticipated user growth.
It will therefore focus on new services like messaging, imaging and other applications by providing the necessary technology to consumers, operators and other service providers.
The company is also expanding “Club Nokia,” its platform for Nokia handset users to promote the Nokia brand and increase customers.
Nokia also will be a notable player in the wideband CDMA market, where it will be a major supplier to AT&T Wireless Services Inc. in a deal valued at more than $1 billion as represented by the letter of intent.
Nokia has about 30 percent of the total worldwide mobile-phone market, which the company estimates will hit the 1 billion subscriber milestone in the first quarter next year rather than at the end of 2002, a period in which it expects Web-connected handsets to outnumber personal computers.
Nokia also announced at its analyst meeting that it intends to be a leader in the CDMA handset business for which it is shipping large volumes of its new tri-mode Nokia 5185i (CDMA1900/800/AMPS) phone which will be improved to fancier models in 2001.
Last month, Qualcomm Inc. also formed a venture arm to invest in start-up companies in order to proliferate CDMA technology.
Nokia is extending its tentacles to start-ups that will use its new applications and networks. The strategies are working for both companies as demonstrated in their recent stock fortunes.
