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Secure Transactions News

Nokia divests from Venyon and reduces R&D

Thursday 3 December 2009

As an immediate implementation of this new strategy, Giesecke & Devrient and Nokia just announced has become the sole shareholder in Venyon by acquiring the 43% shares held by Nokia. G&D already held 57% of the shares before the acquisition. Terms were not disclosed. Since its creation in 2006, Venyon provides trusted services to provision and manage applications such as credit cards or transit tickets securely over the mobile network on the user’s NFC-enabled mobile phone. Venyon is well positioned to provide aggregating Trusted Services Manager (TSM) services between mobile network operators issuing NFC-capable SIM cards and service providers such as transit companies and banks on the growing NFC market. G&D estimates that the demand for NFC services is increasing worldwide. With its industry-leading expertise combined with G&D’s position in the SIM and secure applications market, Venyon is well positioned to provide TSM services to banks, transit operators, mobile network operators and other stakeholders planning to commercialize their NFC services.

Nokia plans to align its research and development (R&D) operations in Finland and Denmark to be in line with the company's focused portfolio of future products. The planned changes are expected to affect up to 230 employees at Nokia's Oulu site in Finland, approximately 100 employees at Nokia's Copenhagen site and approximately 220 employees in Japan. The total number would represent approximately 3 % of Nokia's R&D personnel globally.

Nokia still maintains a strong R&D presence in these sites; the company has over 2 000 employees in Oulu and over 1 000 employees in Copenhagen. Overall, Nokia has more than 17 000 people employed in its research and development activities.

The layoffs are part of the company's efforts to align its global research & development operations with new products. Nokia Siemens Networks, the network equipment maker owned by Nokia and Siemens, will not be affected by the reorganization, said Nokia. Vertu, Nokia's exclusive line of handcrafted mobile phones for the luxury market, will also continue operations in Japan unaffected by it.

Though Nokia still holds the top spot in the smart phone 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 smart phone market had dropped to 35% in Q2/2009 compared with 50% in Q2/2008.

Another report from Strategy Analytics revealed that Apple had surpassed Nokia in cell phone profits during Q3/2009, the first time that Nokia had fallen to second place.

Nokia's Q3/2009 results showed a net loss of US$ 832 million (EUR 554.7 million), while sales dropped around 20%. Nokia Siemens, the network equipment maker run by Nokia and Siemens, has also been a drag on its owners, recently announcing its own layoffs of 6 000 jobs and cost cuts as a result of its weak performance, encountering ferociously competitive Chinese gear makers Huawei and ZTE.