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Nokia wants to transform itself from a hardware vendor into a provider of services and content. As it transformed itself from a rubber boot maker to, for several years, the most dominant player in the mobile market, this may not seem to Nokia an immense step.
This has already been done successfully by smartphone companies such as Apple with its iPhone and Research in Motion with its BlackBerry (smaller than the iPhone in sales but with a strong grip of its segment of the market). The strategy seeks to boost margins that have been squeezed by increasing competition in the handset market.
Nokia has set itself the ambitious target of attracting 300 million users for its services by 2012.
New Alliance, a Shanghai-based investment group, and Nokia will each hold a 50% stake in the new venture – which will start business in January and employ 80 people.
Financial Times reports New Alliance is an affiliate of Shanghai Alliance Investment, a group that has cooperated with Nokia before. In 2001, it took a 30% stake in a China-based handset manufacturing subsidiary owned by Nokia, which the Finnish handset maker later merged into its group.