The U.S. will snatch the lead in mobile technology from Europe as the Internet is integrated with mobile devices, Nokia's CEO told a Silicon Valley audience on Wednesday night.
Europe was the center of mobility in the 1990s, when the focus was on texting and making calls, but Silicon Valley's Internet and PC heritage is starting to give the U.S. the edge, Olli-Pekka Kallasvuo said in a dialogue with Forbes Publisher Rich Karlgaard at a gathering of the Churchill Club, a local business group. Continuing performance upgrades to U.S. carriers' networks is helping, he said.
"I think it will be driven by the U.S., by the Valley, and I see a lot of activity here. ... The U.S., as opposed to being a laggard, will lead this one," Kallasvuo said. Nokia has a large research center in Silicon Valley already.
Nokia is investing heavily in services to supplement its mobile-phone business, which sells about 40 percent of the world's handsets. Most recently, the company in Espoo, Finland, announced a deal on Tuesday to buy Canadian mobile messaging company Oz Communications.
"The consumers are not happy with a hardware purchase anymore. They want more. They want an experience. They want a solution," Kallasvuo said. As an example, he pointed to Research In Motion's BlackBerry, which delivered a mobile e-mail capability tightly integrated with the device.
Nokia is trying to meet these expanded demands with a variety of services, including its Ovi portal, which includes personal file synchronization and sharing, music, games, photos and mapping and location. The company is also readying the Nokia E-mail Service, which will provide access to multiple e-mail accounts on both low-end and more advanced handsets.
Nokia's aim with these added services is to give context to the Internet while people are out in the world, using elements such as information about their surroundings and their friends' locations, Kallasvuo said. Rather than competing with mobile operators, which traditionally have kept tight control of what appears on their phones, Nokia is cooperating with them, he said. He cited agreements with several major European operators to deliver Ovi.
Kallasvuo gave a tip of the hat to Apple as well as to RIM, crediting the iPhone with helping to reinvigorate the mobile industry. Nokia research shows the news is good across Europe, North America and Asia, he said.
"The whole market is moving up when it comes to the involvement of consumers," Kallasvuo said. They are increasingly willing and able to use mobile communications in new ways.
"Apple has made a sort of big favor to this industry ... showing, with the iPhone, to the U.S. and other consumers, that this can be very exciting," he said.
But he added that Nokia needs to respond to new competitors, and will. (The company Thursday announced that its first touch-screen mobile phone, the 5800 Xpress Music, will ship later this year and has a smooth glass front like the iPhone's.) In addition to compliments, Kallasvuo took a few digs at his rivals.
With a recently announced Microsoft Exchange client for the Symbian Series 60 OS, Nokia will quickly surpass RIM in the volume of mobile e-mail devices, Kallasvuo said. And while the iPhone has had an outsize impact, it's a "niche" product, he said. Sales of the iPhone -- estimated at several million since the 3G model was launched in July -- are dwarfed by total Nokia sales of more than 100 million units per quarter.
Kallasvuo also took pains to set Symbian, the operating system Nokia plans to acquire and give away to the Symbian Foundation as open source, apart from Google's Android. Symbian is the only mobile OS that is mature and open, he said. He noted the attention generated by Google's Android announcement last November.
"We could have made the same announcement 10 years ago," when Nokia launched Symbian with an alliance of partners, Kallasvuo said.
"There are no hooks, there are no disclaimers, there's nothing, when it comes to Symbian, that would make it closed in any way," he said. "We will not need more openness, we will need more mindshare, because that's the area where we are trailing at the moment when it comes to some competing operating systems."