Nokia is reining in R&D, with the axe falling hardest on its 3,000-strong multimedia division founded a year ago. The exact number of staff affected isn’t known, but a press release issued on Tuesday from Nokia Multimedia says the cuts are intended to reduce R&D expenditure to 9 to 10 per cent of net sales by the end of next year. That’s roughly the level it was in 2001. According to Nokia’s most recent annual report, consolidated R&D rose from 9.6 per cent of net sales in 2001 to 12.8 per cent in 2003.
In a statement, Nokia’s multimedia chief Anssi Vanjoki said that while imaging was doing well, “games, music and media are still in a more early development phase”. The division is responsible for the N-Gage games console, which with unfortunate timing, disappeared from the ELSPA’s weekly sales tallies this week because of low sales, according to one report. ELSPA says it will still track N-Gage games sales, but this is an indication of the failure to make much headway in a highly competitive market. Last year Nokia said it needed 18 months to judge the success or failure of the console, and much of the initial marketing expense seeding developers and promoting the device has been invested. However a third version will be in even hotter competition against Sony’s PSP, and the arrival of Nintendo’s DS in Europe.
Orphan phone, dead platform
Sometimes, Nokia’s lab teams seem to be more enthralled by the joy of producing strange explosions than looking at what the experiment has produced, once the smoke has cleared. Take for example, one of the casualties of Nokia’s ongoing multimedia shake out, an orphan phone based on a dead-end platform.
The 7710 is a 640×320 touchscreen Series 90 phone no larger than a Sony Ericsson P910, but last November Nokia confirmed that Series 90 was being folded into the Series 60 platform. The only other Series 90 phone to be made public, the 7710’s predecessor the 7700, never even made it to market, being repositioned as a test-bed before launch. Its much vaunted “Visual Radio” feature is in its infancy and the device can’t see more than 512MB of MP3s files. But that hasn’t diminished interest in the phone, which ironically, has trickled out to joyous reviews and is now selling like hotcakes as an import on eBay. It’s not hard to see why: as good, cheap, light MP3 players that run the Opera browser don’t just drop out of the sky. Except when they do.