Samsung is rubbing salt in Nokia’s wounds by overtaking the company, for so long the flagship of the whole Finnish economy, in its home smartphone market, and planning an R&D center in Espoo, near Helsinki ‘ site of Nokia’s headquarters.
According to IDC researchers, in the first quarter Nokia sold 196,000 handsets in Finland, seeing its market share drop to 33.6%, from 48% a year earlier. Meanwhile, Samsung shifted 211,000 devices, giving it 36% share.
Finland is a drop in the ocean of total smartphone sales, but like Samsung’s Korean homeland, it carries industry weight well above its size, because of its long history as Nokia’s base, which brought it a significant role in shaping the mobile industry. There is still a major ecosystem of engineers, researchers and developers based around Nokia, though many, of course, are now seeking new employment.
Samsung aims to tap into that potential, it seems, by opening an ‘advanced hi-tech’ R&D facility in Nokia’s back yard. ‘On June 13 2013, we plan to open a new R&D center in Finland, which will be a branch of the Samsung Electronics R&D Institute UK (SRUK). This decision to establish our R&D presence in northern Europe reflects the importance we place on the European market,’ Samsung said in a statement. The firm has 18 such centers round the world, in nine countries, but this is the first in the Nordic region. It has also been investing heavily in recent months in its Silicon Valley research and investment presence.
The company has not yet specified what technologies will be the focus in Espoo, though it could include projects with the VTT Technical Research Centre of Finland, which last month announced a €1m energy efficiency R&D partnership with Samsung. However, given the proximity to Nokia, there is almost certain to be work on hardware and software advances for the smartphone and post-PC devices. An advert for an R&D director for the new Finnish unit, seen by Engadget, said the candidate would need experience in mobile software design and would help ‘create the future of R&D in mobile business’.
This suggests that the Tizen Linux-based operating system could be a key focus. Timo Jokiaho, a former Nokia engineer, has joined Samsung as head of Finland R&D and the European open source innovation group. According to his LinkedIn profile, one of his projects will center on ‘selected domains’ of the Tizen mobile OS stack, such as multimedia, security, graphics and web. After Nokia, Jokiaho also spent time at Huawei’s Finnish operation, where he was VP of terminal OS strategy and planning. Also targeting former Nokia brainpower, Huawei opened its own R&D center in Helsinki last year, focused on Android and other mobile software platforms.
It seems that, whatever the fate of Nokia itself, some of its considerable R&D legacy, and the influence it brought to Finland, will survive, driven by the new giants of the handset space.
Apple engineers and other executives are always in the sights of other smartphone makers, hoping to gain a little of the firm’s ‘magic’ by hiring people who were involved in the heyday of Apple product launches. Jon Rubinstein, one of the highest profile Apple stars after leading the iPod launch, became CEO of Palm and, having departed from Palm’s acquirer (and killer) HP, he was recently hired as a board director by Qualcomm.
Now Sony is looking for Apple talent and credibility, as it revamps its smartphone attack and aims to take advantage of the iPhone maker’s current ‘ and possibly temporary ‘ loss of the famous magic. CEO Kazuo Hirai has nominated two former Apple executives to his board ‘ Eikoh Harada, formerly head of Apple Japan, and Tim Schaaff, who joined Sony in 2005 after being VP of interactive media at the US company.
Hirai has centered his turnaround plan for Sony on the mobile and multiscreen devices business and given a pivotal role to the Xperia smartphone line, following the buyout of Ericsson from the companies’ handset joint venture last year. He has spoken of the need to add ‘inspiration’, not just features, to the smartphones, and may hope that Apple experience could help with that. ‘It would help Sony to gain outside board members that have expertise in businesses that Sony is trying to strengthen,’ Koki Shiraishi, an analyst at SMBC Nikko Securities, told Bloomberg. A third new director has been proposed ‘ Joicho Ito, director of the Media Lab at Massachusetts Institute of Technology. Four directors are retiring, including chairman and former CEO Howard Stringer.
The reshuffle comes as the current directors are mulling over a proposal from billionaire hedge fund manager and activist investor Daniel Loeb, that Sony should spin off at least part of its entertainment business ‘ particularly the movie and music operations ‘ in an IPO. He argues that this would increase Sony’s market value and raise cash. The film unit, which has had major hits such as ‘Skyfall’, has helped offset years of losses in the TV business, while smartphones are expected to be a major source of growth this year too ‘ Sony is projecting a 27% rise in its smartphones shipments in 2013. There are some small signs of progress ‘ Sony’s global smartphone market share crept up to 3.8% in the first quarter, from 3.6% a year earlier.
Even Motorola Mobility is getting in on the act, picking over the leavings of the company with which it battled for mobile dominance before Apple came along. The Google unit is to take over a former Nokia handset factory in Fort Worth, Texas, where it will make its upcoming Android flagship, the Moto X. The company will score brownie points at a time when the working conditions at some Asian factories, used by Apple and others, are under scrutiny. Motorola’s chief Dennis Woodside said that this would be the first smartphone to be manufactured in the US, and that the factory will employ around 2,000 staff. He said that, despite higher labor costs in the US compared to China or Taiwan, shifting production to America would integrate and accelerate design and development. The Moto X, the first new model to debut under Google’s auspices, is expected to be launched in October.