Nokia to transfer 2,800 staff to Accenture

June 22, 2011 - 6:59 AM

HELSINKI (AP) — Nokia Corp. said Wednesday it has completed a deal to outsource Symbian software development to Accenture, including the transfer of 2,800 workers to the global management-consulting firm.

The announcement came two months after Nokia disclosed the plan as part of its aim to cut costs by $1.5 billion (euro1 billion) by 2013, including 7,000 global layoffs, and catch up with top rivals in the tough smartphone market.

The Finland-based company faces strong competition from Research in Motion's Blackberry, Apple's iPhone and Google's Android, as it continues to see market share fall. Last month it issued a big profits warning.

Nokia's share price has plunged in recent months and was trading near multi-year lows of euro4.23 ($6.08) in early afternoon trading in Helsinki — almost unchanged from Tuesday's closing rate.

Nokia said Accenture PLC will provide it with software services through 2016 with the personnel transfer expected in October when the deal closes. Half of the workers are based in Finland with another 1,400 in China, India, Britain and the United States.

Besides the personnel transfer, Nokia has said it plans to lay off 4,000 people by the end of 2012, mostly in Denmark, Finland and Britain.

Since 1998 Nokia has been the biggest seller of cellphones but in the first quarter of this year Apple overtook it as the world's top handset vendor in revenue terms — reaching sales of $11.9 billion on shipments of 18.6 million devices against Nokia's revenue of $9.4 billion on shipments of 108.5 million units.

Although Nokia sold 432 million devices in 2010 — more than its three closest rivals combined — its market share continues to fall. At 29 percent in the first quarter, it's at its lowest level since the late 1990s.

Even more damaging has been Nokia's inability to meet modern challenges of the smartphone market, the lucrative sector in the handset industry, where Nokia used to be the leading innovator. Although it sold 24 million smartphones in the first quarter, 13 percent more than in 2010, its share in the sector plunged to 24 percent from 39 percent a year earlier.

On Tuesday, Nokia unveiled the N9 smartphone, based on its new MeeGo platform, but the handset received mixed reviews as markets are waiting to see the company's first Windows Phone. CEO Stephen Elop has said the Windows-based phone will be launched later this year with bulk sales expected in 2012.

In February, Nokia announced a major strategy shift when it partnered with Microsoft Corp., saying it will gradually replace Symbian and MeeGo platforms with the Window-based software that will become the main software used in Nokia cellphones.

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