Business Tech

Nokia said Friday that a streamlining effort could result in the elimination of as many as 330 positions from its research and development staff, or about 2 percent of its global R&D workforce.

Microelectronics research at Nokia.

(Credit: NOkia)

The changes will likely hit up to 230 workers in the company's Oulu site in Finland and roughly 100 at its Copenhagen site. Nokia said it plans to offer voluntary severance packages to the affected workers and to find alternative jobs for as many people as possible.

The company currently employs more than 17,000 workers in its R&D business. It has 2,000 employees at the Oulu facility and 1,000 in Copenhagen.

Though Nokia still holds the top spot in the smartphone arena, its dominance has been eroded by competition from the likes of Apple and Research In Motion. A recent In-Stat report found that Nokia's share of the smartphone market had dropped to 35 percent in this year's second quarter compared with 50 percent in the prior year's quarter.

Another report from Strategy Analytics revealed that Apple had surpassed Nokia in cell phone profits during the third quarter, the first time that Nokia had fallen to second place.

Nokia's third-quarter results showed a net loss of $832 million, while sales dropped around 20 percent. Nokia Siemens, the network equipment maker run by Nokia and Siemens, has also been a drag on its owners, recently announcing its own layoffs and cost cuts as a result of its weak performance.

Damaged by lower sales, huge operating losses, and a falling market share, Nokia Siemens Networks is pinning its hopes on a major reorganization.

The network equipment maker, jointly owned by Nokia and Siemens, announced Tuesday that it will lay off 5,700 employees and cut its five business units to three as part of a plan to slash expenses by 500 million euros ($740 million) by the end of 2011.

The layoffs will represent around 7 percent to 9 percent of the company's 64,000 global employees and is likely to be felt across all countries in which Nokia Siemens has a presence. The company did not state which jobs would be affected but did say that any disruption to sales positions that deal directly with customers should be limited.

The three new revamped business units are expected to launch on January 1 and will include Business Solutions, Network Systems, and Global Services.

"As our customers make purchasing decisions, they want a partner who engages in issues well beyond a traditional discussion of technology," said Rajeev Suri, chief executive officer of Nokia Siemens Networks, in a statement. "Business models, innovation, growth and transformation are now very much front and center when it comes to the selection of a technology partner - and our planned new structure will position us well in this changing market."

The company said it's also looking at potential new acquisitions and partnerships that could enhance its product line or expand its customer base. In June, Nokia Siemens bought Nortel's wireless technology for $650 million.

"We recognize that we are operating in a market where customer needs are evolving fast," said Mika Vehvilainen, chief operating officer of Nokia Siemens Networks, in a statement. "We see acquisitions and expanded partnering as important tools to help meet these needs in the fastest, most efficient way possible."

Formed in early 2007, Nokia Siemens has seemed cursed from the start. Its launch was initially delayed a few months due to a bribery scandal involving several former Siemens executives.

The new company had hardly gotten off the ground when it announced it wouldn't meet financial expectations. And it's struggled since then, hurt by the economic downturn and increasing competition.

Third-quarter sales fell 21 percent to 2.8 billion euros, while its operating loss widened to 1.1 billion euros. Parent Nokia was recently forced to spend 908 million euros to write down the value of the deteriorating business.

Nokia and SAP are forming a new company that will use their technologies to help manufacturers battle counterfeit products.

Announced Tuesday at SAP TechEd in Vienna, Original1 will offer services to better authenticate branded products and protect them from counterfeiting, the companies said in a statement.

Offering software as a service (SaaS), Original1 will draw on a combination of SAP's supply-chain technology and Nokia's mobile authentication software. Nokia and SAP will each own 40 percent of the business, while German firm Giesecke & Devrient (G&D) will own the remaining 20 percent and add the security and encryption component.

The service will target products that are especially vulnerable to counterfeiting, such as pharmaceuticals and luxury goods, G&D spokesman Stefan Waldenmaier said. Other items, such as auto parts and software, could also benefit from the service, he said.

At this point, the service can only work with physical products, not electronic items. So, for example, Original1 could protect boxed software but not downloadable media.

Here's how it works: branded products will be electronically tagged with smart, tamper-proof barcodes, allowing the manufacturer to track them using a Nokia smartphone as they move from factory to store shelf. A retailer can then check the product information against a database and determine whether the data is coming from a legitimate product.

Located in Frankfurt, Germany, Original1 will be run by Claudia Alsdorf, currently the vice president of SAP Research.

"Counterfeiting is a worldwide problem that is increasing and affecting many successful companies in all industries," Alsdorf said in a statement. "Today, more than ever, companies need to combat counterfeiting before it's too late, when their company livelihood is at stake."

SAP has already run pilot tests of the new service with some of its customers and said the testing has been successful.

Nokia and SAP have a history of working together on mobile projects. Nokia is an SAP global technology partner, while SAP is a Nokia Enterprise Zone member.

Subject to regulatory approval, Original1 is expected to open its doors before year's end.

In the video below from SAP, Alsdorf talks about the new company:

Nokia on Thursday reported a loss for its third quarter of 559 million euros ($832 million) compared with a profit of 1.09 billion euros in the same quarter of 2008.

The net loss for the period that ended September 30 was triggered by declining sales, which fell 20 percent to 9.18 billion euros from 12.2 billion euros the prior year's quarter. A write-down of the company's weak Nokia Siemens Networks unit also put a big drag on the bottom line.

Net sales for the third quarter came in at 9.8 billion euros, down 20 percent from 12.2 billion in the year-earlier quarter.

Following the news, shares of Nokia stock fell 6.6 percent to 9.62 euros.

Though Nokia's mobile phone sales managed to eke out some gains, overall revenues were hurt by a shortage of components for many of its products.

"The demand for mobile devices improved in many markets during Q3," Nokia CEO Olli-Pekka Kallasvuo said in a statement. "With the average selling price of our devices holding firm quarter-on-quarter, our higher device volumes translated into increased net sales in our Devices & Services business. Our volumes and net sales were, however, somewhat constrained by component shortages we encountered across the portfolio.

The company said that its share of the mobile device market for the quarter was 38 percent, the same as in the year-earlier period and in the second quarter of 2009.

Nokia Siemens Networks, the network equipment unit formed in 2007 and co-owned by Nokia and Siemens, has struggled to turn a solid profit from the get-go. In a write-down of this failing business, Nokia was forced to spend 908 million euros.

(Credit: Nokia)

"The challenging competitive factors and market conditions in the infrastructure and related services business necessitated non-cash impairment charges at Nokia Siemens Networks," said Kallasvuo.

Despite weakness in the mobile phone sector, Nokia is optimistic about its near-term outlook. The company now sees volume for its phones hitting 1.12 billion units for the year, down 7 percent from 2008, but better than Nokia's earlier estimate of a 10 percent decline.

Nokia expects the market for its mobile infrastructure and related services market to fall 5 percent for the year from 2008 levels, an improvement over earlier estimates of a 10 percent drop.

However, the future remains cloudy for Nokia Siemens Network, which is likely to see its market share drop even further for 2009 than previously forecast, said the company.

During the third quarter, Nokia also completed its acquisition of GPS map specialist Navteq.

Intel and Nokia have more than a few holes in their respective collections of mobile technologies. How far will the collaboration announced Tuesday go to plug the holes and take them to the next technology plane?

Intel senior vice president Anand Chandrasekher

(Credit: Intel)

A platitude easily missed in the announcement may be the most revealing statement. Simply, that the two companies create the opportunity to take advantage of each other's expertise.

Nokia makes mobile phones. Intel, the world's largest chipmaker, can't get its chips into mobile phones. On the other hand, Intel makes the silicon that powers the world's PCs. Nokia doesn't have a clue about PCs.

The announcement won't necessarily inspire confidence with its lack of product particulars, but that's not what it's about. "Today is a relationship announcement," said Jeff Orr, senior analyst for mobile devices at ABI Research.

Intel and Nokia are simply agreeing at this stage to collaborate rather than be direct competitors, according to Orr.

Nokia was clear--in a cryptic sort of way--on one point, however: "Today's collaboration is not about smartphones but creating a new class of devices," Kai Oistamo, executive vice president for devices at Nokia, said in a phone interview Tuesday.

Beyond those future devices--presumably powered by Intel silicon--what does Intel get? Initially, the most concrete thing is 3G. "This is a gap for Intel, which has focused on Bluetooth, Wi-Fi, and WiMax," Orr said. "As a result, when future architectures like an Atom platform are developed for MIDs (mobile Internet devices), Netbooks, smartphones, that means vendors will have more flexibility for connectivity."

In short, Intel can build 3G into its chipsets and Intel can compete more effectively in the future with products like the iPhone and Palm Pre that include 3G as standard. Intel-based notebooks and Netbooks, until recently, were rarely offered with 3G as a standard option.

"We're not talking about specific products today but certainly we would not have taken a license (from Nokia) if we didn't have the intention to build a product," Anand Chandrasekher, Intel senior vice president and general manager at the Ultra Mobility Group, said in a phone interview Tuesday, referring to Intel's licensing of Nokia's HSPA/3G modem technology.

And it may be too soon for 4G technologies like WiMax. There are many countries (ABI Research's Orr counts about 100) where 3G is just emerging, so talking about WiMax (a 4G technology) is "very premature for most countries," he said.

Updated at 8:20 a.m. PDT: Added Intel-Nokia announcement and Intel discussion.

Intel and Nokia announced on Tuesday a wide-ranging deal covering chips, hardware, and software for mobile devices.

The companies said their new "long-term relationship" will focus on developing new chip architectures and software and a new class of Intel-based mobile computing devices. The move is part of a major shift for Intel, which is a giant in PC chips but not a player in cell phones.

Among other aspects, the agreement covers mobile applications and wireless Internet access "in a user-friendly pocketable form factor."

The Intel and Nokia effort includes collaboration in several open-source mobile Linux software projects. Intel will also acquire a Nokia HSPA/3G modem IP license for use in future products.

"We will explore new ideas in designs, materials and displays that will go far beyond devices and services on the market today," Nokia said in a statement.

For Intel, the deal adds momentum to its push into the small device/smartphone space. The Nokia announcement follows a pact announced with LG Electronics in February to collaborate on development of smartphones based on Intel's future "Moorestown" silicon and Linux Moblin software.

In March, Intel also announced a deal with Taiwan Semiconductor Manufacturing Company (TSMC) to cooperate in the manufacture of Atom processors.

Intel's need
The point of all of these announcements is to get Intel-architecture chips into cell phones, a giant worldwide market with well over a billion devices sold in 2008.

And the world's largest chipmaker needs to be a player in this market. Smartphones like Apple's iPhone, the Palm Pre, and T-Mobile's Google Android phone, the G1, are taking on many of the attributes of PCs and are increasingly adept at Web browsing, video streaming, and game playing--not unlike a personal computer.

Toshiba just began selling a smartphone that packs a 1GHz Qualcomm processor.

Texas Instruments and other chipmakers are also readying speedy processors for smartphones next year with two processing cores and enhanced video capabilities. And it was disclosed last week that an Nvidia chip will power Microsoft's Zune HD.

And what do those devices and technologies have in common? They're all powered by chips based on the ARM design.

Why ARM? ARM's approach to designing processors is the opposite of Intel's: power efficiency is paramount, performance secondary. Smartphone chips need to operate within a tiny power envelope, typically well under 0.5 watts and must last all day on one battery charge. Current Intel Atom chips--while relatively fast--draw too much power and are hardly suitable for smartphones.

The irony
Ironically, Intel manufactured an ARM-based chip series for many years called Xscale, which traces its heritage to a design called StrongARM. These chips were used in the Hewlett-Packard iPaq, a leading handheld for a number of years. But Intel sold this business to Marvell in 2006.

The chipmaker's strategy now is to shrink its global-standard x86 PC chip architecture to the point where it can run efficiently in smartphones. That's where Moorestown comes in. Intel claims Moorestown will be suited for high-end smartphones by 2010 and that "Medfield" silicon will make it into standard cell phones by 2011.

Neither Intel nor LG gave a date for availability of the LG device, but it is expected to appear soon after Moorestown is available. Intel is saying that Moorestown will be available in 2009 or 2010, though the second half of 2009 appears increasingly likely.

Under the agreement with TSMC, Intel will port its Atom processor technology to TSMC, which will serve solely as a manufacturer of Atom-related silicon--primarily chipsets.

Sample JavaScript using JQuery.

(Credit: Microsoft)

Microsoft said Sunday that it plans to ship the JQuery JavaScript library with its Visual Studio developer tool suite.

The software powerhouse said that jQuery would be one of the libraries used to implement higher-level controls in the ASP.net Ajax Control Toolkit, and would also have a role in new Ajax server-side helper methods. The 15KB JQuery JavaScript library will be distributed as is, with no forking, and files will continue to adhere to the JQuery MIT license.

In addition, Microsoft said that it would contribute tests, bug fixes, and patches to the JQuery open-source project and that later this year it would extend product support to JQuery.

The announcement came in a blog post by Scott Guthrie, a vice president in Microsoft's developer division, who described the library's attraction:

A big part of the appeal of jQuery is that it allows you to elegantly (and efficiently) find and manipulate HTML elements with minimum lines of code. jQuery supports this via a nice "selector" API that allows developers to query for HTML elements, and then apply "commands" to them. One of the characteristics of jQuery commands is that they can be "chained" together - so that the result of one command can feed into another. jQuery also includes a built-in set of animation APIs that can be used as commands. The combination allows you to do some really cool things with only a few keystrokes.

Guthrie also pointed to a newly posted tutorial on Scott Hanselman's Computerzen blog about integrating JQuery with ASP.net Ajax.

Writing on the JQuery blog, John Resig said that mobile phone heavyweight Nokia also is adopting JQuery as part of its application development platform. As is the case with Microsoft, he said, Nokia isn't looking to make any changes to the library, and its developers will contribute to the JQuery project.

Resig, a lead developer of JQuery, wrote:

Nokia is looking to use jQuery to develop applications for their WebKit-based Web Run-Time. The run-time is a stripped-down browser rendering engine that allows for easy, but powerful, application development. This means that jQuery will be distributed on all Nokia phones that include the web run-time...

...The jQuery test suite is already integrated into the test suites of Mozilla and Opera and this move will see a significant level of extra testing being done on Internet Explorer and WebKit - above-and-beyond what is already done by the jQuery team.