Nokia recently announced the $8.1 billion acquisition of the mapping firm Navteq. They see this acquisition as a logical extension of their transformation from a hardware company to a software company. Nokia has experienced many transformations such going from timber and rubber to cabling to communications, etc. They have recognised that device manufacturers may eventually go the way of PC manufacturers and bet the house on differentiating through applications and services.
Zander called the $8,1 billion price tag 'stunning' and commented 'We looked at it and went on our way...We didn't even think about it...That's not our strategy...We are not in the applications business'.
This put down of Nokia, (a company going from strength to strength in terms of market share, profits and portfolio diversity), is ironic from an executive whose company has seen market share fall, profits disappear and its number one product catch a dose of the Emporer's New Clothes. If I was being generous, I would say that Zander has to say this to mollify investors that he is not going on an acquisition spree that will dilute an already battered share price.
However, knowing a bit about the internal workings of Motorola, I would also add that it somewhat typifies the corporate culture within certain parts of this company.
If we witness the eventual 'PC-fication' of the mobile device industry, then we will see that eventually features such as thinness, megapixels, GPS, etc will plateau and it will become difficult for a manufacturer to differentiate on these hardware-related aspects.
Therefore the important differentiator will become the software, applications and services.
So as Nokia re-invents itself yet again to try and take advantage of a new chapter in its history, the CEO Motorola continues to bellow Jurassic platitudes.
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