Ailing Finnish cellphone maker Nokia Oyj is revamping its business to bolster location-based services as it tries to gain profitability and compete more effectively against rivals such as Apple Inc Nokia said on Wednesday it would incorporate Navteq, an independent unit specialising in the fast-growing digital mapping, into its broader services business.
Map-linked advertising, key to generating cash from location-based services, is starting to take off and is expected by Pyramid Research to grow to over $6.2 billion by 2015. Nokia Chief Executive Stephen Elop also named Michael Halbherr, an outspoken executive who joined Nokia in 2006, to lead the new Location & Commerce business line. Halbherr was the mastermind behind Nokia's $8.1 billion 2008 acquisition of Navteq, the world's largest digital map maker, in the largest-ever takeover by the 146-year old company.
Elop has seen the company's stock price halving over the last four months as investors doubt the likely success of his plan to switch to Microsoft Corp's smartphone software. Under previous management, Nokia pushed strongly into a wide range of cellphone services, but most of the efforts, including gaming and music, flopped.