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Nokia CEO: MS Purchase Rumors Bogus

PCMag sat down with Nokia chief Stephen Elop at CES to talk about the company's plans for 2012.

January 11, 2012

LAS VEGAS—Rumors that Microsoft is about to buy Nokia's smartphone division are "baseless," Nokia CEO Stephen Elop said in an interview with PCMag. Here at the CES trade show, Elop promised a broader array of U.S. smartphones (and maybe even some on Sprint and Verizon) along with more announcements at the Mobile World Congress trade show in February, but stayed coy when asked about recent OS purchases.

The interview below has been edited for length, but it's all Elop's words.

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PCMAG: Is Nokia looking to sell the smartphone division to Microsoft?

Elop: As we've described it before, the rumors are baseless, and some people who seem to enjoy generating rumors are running out of fresh material, so it seems to have come up again. I have nothing else to say.

PCMAG: Would Nokia's smartphone division work as an independent company, or are smartphones and feature phones essential to each other?

Elop: There's significant synergies between the multiple groups within Nokia—for example, on decisions around chipsets, on memory, on different display technologies. We gain scale advantages across the entire portfolio of devices that we have. In a number of the services and areas where we differentiate, [for instance] location-based services, we have a common team that's doing that work collectively across mobile phones and smart devices, so there's a lot of synergy that exists across the portfolio of Nokia products.

PCMAG: Recently you guys acquired Smarterphone, the feature phone OS company, and there had previously been some talk of your feature phone OS Meltemi. What are you going to do with those projects?

Elop: We haven't provided details of a key element here of our overall strategy. Last February we announced three pillars to our strategy. And one of those pillars was about increasing the R&D investment in the mobile phone space. You've talked there of the fact that QT would be the development platform for that initiative. Clearly there's some new work going on, new investments, you're seeing little bits and pieces of acquisitions and things happening. We haven't been more specific than that, but clearly there's an initiative underway there that relates to our mobile phones efforts to connect the next billion people to the Internet.

PCMAG: Could this be a platform to supersede S40?

Elop: So again, we haven't provided any details, but S40 is a platform that continues to see significant investment. It's getting smarter and smarter with each successive device and release, so there's still a lot of activity there.

PCMAG: Are you going to provide support for CDMA and CDMA/LTE Windows phones, or is this primarily a GSM platform?

Elop: When we introduced the Lumia products in October, we announced that there would be support for CDMA as well as TD-SCDMA, which is an important radio standard in China, as well as broadly LTE, which of course comes in different variants around the world. You saw today an example of LTE; we've clearly signalled that there will be examples of CDMA.

PCMAG: How should we expect to see promotion and marketing for Windows Phone here in North America?

Elop: I think what you will see, and you'll see us emphasize, is the most important thing for us to do is to introduce people to the concept that defines the Lumia experience, including the Windows Phone elements. What our work shows is that when someone has a Lumia device in their hand...their overall willingness to recommend the device to a friend goes up very high. People really enjoy the experience. But they have to see it to experience it.

We'll take the steps in stores to make sure that sales associates understand how the products are differentiated. We're seeding a large number of devices into the markets where we introduce the products, so large numbers of sales people and sales managers in stores have the devices in their hands...you'll see us really try and connect the consumer with that first experience of Windows Phone, and any step that we need to take or any barrier that needs to be knocked over between those two points is what we'll focus on in our marketing.

PCMAG: Within the Windows Phone ecosystem, there are other vendors who are putting out other phones with fancier specs.

Elop: I'm going to differentiate on "fancier specs," because the specs that I appreciate are who takes the best picture, who has the best video-conferencing imagery and so forth. What we've done with the Lumia 900 is we've done a lot of work around the optics of the camera. We demonstrated this during our press conference; for example, with the primary camera, we showed how with a variation in focal length and wide aperture, our pictures...get a much wider collection of the information, regardless of pixel count or anything like that.

Part of this is part of our marketing opportunity, to help show people the results. Where is the best picture? And that is the spec I'm most interested in.

PCMAG: How do you communicate quality, as opposed to just "higher numbers are better?"

Elop: It's the same argument on many different functional specs. You've got N+2 of these, we have N; is that better? Often it doesn't matter, or it's even worse. Part of our marketing opportunity is to help explain and show the experience, so when you pull out a Lumia and see the experience with that processor, with that screen and say, wow, this is fast, it doesn't matter that someone else has something that appears to have more of something.

PCMAG: Right now you're doing one phone per U.S. carrier. Is that a strategy?

Elop:You should expect to see a broadening of the portfolio on carriers. You're beginning to see some carriers overseas that have the 800 and the 710. So you should expect to see a broadening, and I don't want to take away from the fact, though, that a partner like AT&T [is] still willing to do unique work that's really focused on the needs of their consumers and their particular strategic needs. The 900's a good example.

PCMAG: What sort of announcements should we be expecting to hear from Nokia at Mobile World Congress next month?

Elop: Our hope is to continue to show that the clock speed of the company has been accelerated. You saw a bunch of announcements in October, you're seeing this in January in the U.S. market, the pattern that I want to demonstrate for the whole company is that we're clearly moving at an accelerated rate.