Nokia signals it aims to stay on top

Nokia Corp. may be the world's top cell phone maker, but it's no longer a trendsetter, as a host of inventive and alluring technologies from North America is shifting the center of gravity in the cellular universe away from Europe.

Despite efforts to boost its position in the United States, Nokia is struggling to compete with Cupertino, California-based Apple Inc. - maker of the iPhone - and Canadian smart-phone maker Research in Motion, which makes the BlackBerry.

"There has long been a steady stream of North American firms attacking Nokia and they are likely to encourage others, such as Amazon, to follow suit. The intensity of competition can really only get tougher," said Neil Mawston of Strategy Analytics.

Innovation is where Nokia has faltered, experts say. After much hype, its N-Gage online game flopped. And it has been slow to catch on to market trends, from folding "clamshell" handsets to phones with sliding tops and touch screens. It was forced to quickly ship models with those features to markets.

In October, it launched its first laptop, a netbook with a 10-inch screen that runs on Microsoft Corp.'s Windows 7 software. It also has introduced touch-screen handsets that unmistakably resemble the popular iPhone.

Nokia CEO Olli-Pekka Kallasvuo concedes the Finnish company is under pressure.

"There is no doubt the center of mobile innovation has shifted from Europe to Silicon Valley. We are working to tap into this innovation," Kallasvuo told analysts earlier this month. He said Nokia has more than 3,300 employees in North America to redress the balance.

When Kallasvuo took over as CEO in 2006, he announced that a top priority for Nokia would be to improve its performance in the U.S. market, but success has been elusive. Sales volumes in North America plunged more than 7 percent in the last quarter from a year earlier to 3.8 million devices, which does little for the company's image in the region.

This week at the industry's largest trade show - the Mobile World Congress in Barcelona - Nokia announced the next step in its partnership with Intel Corp., saying they're combining the software they've been developing separately for new high-end smart phones. Nokia's Maemo and Intel's Moblin will together be known as MeeGo.