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Nokia switches focus to smartphone services

More job cuts due to falling handset sales

Nokia will lay off 450 employees as the Finnish phone giant refocuses its services to take better advantage of third-party developers, it announced on Tuesday.

The job cut comes on the heels of Nokia's first quarter report, which showed the company had sold 93.2 million phones, a steep drop from the 113.1 million it sold during the fourth quarter of 2008.

These layoffs are the latest in a line of cuts Nokia has made as it tries to grapple with dropping mobile phones sales. On February 11 it announced 320 employees would be laid off, and then in March the company announced plans to cut another 1,700 workers.

Nokia's goal is to lower costs by €700 million by 2010.

The changes to its application push aims to let third-party developers do more with its services and devices, according to Nokia.

Nokia will, for example, open up its Ovi Share service, according to Leslie Nakajima, head of communications at Nokia Services. OVI Share lets users share content using PCs and mobile phones. An upcoming API (application programming interface) will let third-party developers add more ways to share photos and videos, Nakajima said.

Apple's success with the iPhone application market is due to opening its platform to third parties, said Paolo Pescatore, analyst at CCS Insight. In these times it's probably prudent to work more closely with third parties, he said.

The timing of the announcement is no coincidence; the Nokia Developer Summit opened on Tuesday.

Developers will also get a chance to try a beta SDK for the Nokia N97, Nokia's upcoming flagship smartphone. It includes support for the phone's physical keyboard and home screen widgets, according to Nakajima.

The new plan also aims to reduce duplication with Nokia's offerings. There is, for example, no need for its different services offerings to have more than one payment system, said Nakajima.

Mobile games will also be available when the Ovi Store opens, in addition to their existing channels, Nokia said.


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