Yesterday at Nokia's annual general meeting, President/CEO Olli-Pekka Kallasvuo outlined the company's future strategy.

Despite inroads from competitors and a shaky global economy, Finland-based Nokia is still the world's No. 1 manufacturer of mobile devices by market share and a leader in the converging Internet and communications industries. Nokia makes devices for all major consumer segments, offering Internet services that enable people to experience music, maps, media, messaging and games via their handset.

"Nokia is fundamentally changing its business model to transform both the company and the industry," Mr. Kallasvuo said. "While we continue to compete with the traditional mobile device manufacturers, we also are dealing with new competitors entering the market from the PC and Internet industries.

"To succeed in this new environment, we need to offer consumers irresistible solutions that improve their lives," he said. "During 2008, we have taken many steps to ensure we maintain our strong leading position in the device business, while increasing our focus on solutions-centric business models.

"We have focused our services investments on five primary categories: maps, music, messaging, media and games -- these are the areas where the biggest opportunities lie."

Nokia also provides comprehensive digital map information through Navteq and equipment and services for communications networks through Nokia Siemens Networks.

Mr. Kallasvuo said the company believes that Nokia's strategy of combining unique services with high-quality devices will increase customer retention and add value.

He said that more consumers are not only choosing Nokia, but are also remaining as Nokia customers.

"Our estimated consumer retention rate of around 55 percent is almost twice the rate of our global competitors," Mr. Kallasvuo said.

He noted that Nokia customer retention has consistently increased every quarter since the beginning of 2007.

"This is a substantial achievement and shows we have made significant progress with our solutions approach during the past year," he said.

During the address, Mr. Kallasvuo also highlighted the Nokia 5800 Xpress Music devices.

"Consumer response has been well beyond expectations, and it has the potential to become our most successful device ever," he said. "We estimate that this smartphone alone accounts for around 20 percent of all touchscreen devices sold worldwide.

"It offers unique value for those who want to experience their music on the move, particularly when combined with our innovative Comes With Music service."

Mr. Kallasvuo went on to emphasize that Nokia sees further opportunities as consumers trade down to less expensive devices, particularly in a time of recession.

"The Symbian operating system is the world's most widely used software platform for advanced mobile phones," he said.

According to Mr. Kallasvuo, with the help of Symbian, Nokia plans to broaden the definition of the smartphone by expanding mobile Web features into mid-range devices and other new product categories.

"We believe that mobile computing should not be limited only to expensive, high-end devices," he said. "Expanding Symbian into lower price points is the right thing to do.

"We see this as a tremendous opportunity to increase efficiency, to get more scale for Symbian and gain market share."

He also said that success in the changing business environment would require courage and a shift away from the conventional.

"We cannot expect to do it all alone," Mr. Kallasvuo said. "We have to work together with certain competitors, new players and partners in new ways.

"We have to compete and co-operate," he said. "We are working more closely with many other companies, including operators and partners.

"We expect more such partnerships to come."

Mr. Kallasvuo told the audience that Nokia has been continually adapting to a changing environment and would continue this approach.

"We are scaling our operations accordingly and making sensible but fundamental changes in the way we work," Mr. Kallasvuo said. "The results of our cost-savings program are not giving us one-off savings for the short term; these are long-term changes with long-term savings.

"Innovation in the mobile communications industry is certainly not standing still," he said. "It is very clear we have to continue to invest in our future, but at a more appropriate pace.

"Given the current climate, we have to balance what is beneficial and sustainable for Nokia's long-term future, while adjusting the speed at which we operate."

Even though the global device market will contract this year for the first time in many years, there is reason for optimism, according to Mr. Kallasvuo

"There is a lot of opportunity for the taking in our industry," he said. "Mobile devices are becoming true mobile computers and consumers increasingly are more willing to use them in new ways with new services."

NFC technology takes its next step with the Nokia 6216 classic
At the opening keynote of the 3rd annual WIMA conference, held at the Grimaldi Forum in Monaco, Nokia announced its third fully integrated Near Field Communication device, the Nokia 6216 classic.

The new arrival is Nokia's first SIM-based NFC device, which enables carriers to build NFC services on to the SIM card.

With NFC, consumers will benefit from greater ease of use, more convenient sharing of content such as images, Web links, audio files or contact data, as well as secure payment and ticketing transactions, all with one tap of the device.

The Nokia 6216 classic is expected to start shipping in the third quarter of 2009 in select markets, with an estimated retail price of EUR 150 before taxes and subsidies.

Owner's credit card information can be stored securely on the SIM card and waving the device in front of a contactless terminal enables quick payment and simple ticketing services.

A compatible NFC SIM card is required in order to be used with contactless ticketing and payment services, and require a service subscription and installation of an appropriate secure application.

In addition to the NFC technology, the Nokia 6216 classic is outfitted with the features people desire from a next generation mobile device, including digital camera, bright display, stereo FM radio and music player, 3G connectivity and a microSD slot which is expandable up to 8GB.

"When you see it, at first sight maybe you'd say it looks pretty much like any other phone," said Howard Wilcox of Juniper Research in a blog post. "As an analyst, however, I truly believe that we're on the verge of a whole new world of ways to pay -- but most phone users don't know that yet."

Major retailers across the U.S. are installing contactless readers that can accept contactless payment and are integrated with POS systems, according to Juniper.

There are 21 contactless payments issuer financial institutions, and in excess of 80 merchants including Staples, KFC and Coca-Cola, accepting contactless payments at more than 50,000 locations.

In Japan, contactless payments via FeliCa-enabled phones are already commonplace, according to Juniper.

Elsewhere there are a number of pioneering NFC trials and services by companies such as O2, Logica and Mobilkom Austria. And in France, various retail chains are about to install NFC checkouts.

"The mobile wallet is the way to go," Mr. Wilcox said. "Get ready folks -- this is the future."