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Nokia Gets Serious About U.S. Market

Nokia hires a Microsoft exec in a bid to break into Apple, Google territory.



) --


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tapped a


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chief to help plot a U.S. assault.

After seeing four brutal years of market share losses and stock declines, Nokia replaced CEO Olli-Pekka Kallasvuo with Steve Elop, the head of Microsoft's business services.

Nokia's new chief Steve Elop

It's of no minor significance that Elop oversaw Microsoft's Office 2010 effort and has previously held executive jobs at three U.S. tech shops including


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The move is somewhat unusual for the No. 1 phone maker in that Elop is Canadian, not Finnish like almost all of his predecessors. And more importantly, he's a U.S. software guy.

Nokia was huge in the U.S. at the end of 1990s, but the company faded with the rise of






"Returning to the U.S. market has been a spoken goal for Nokia for four years," said Nielsen analyst Roger Entner. "It's the low-hanging fruit, but it's a thorny fruit," he said, referring to the difficulties of playing by U.S. phone company rules.

Under Kallasvuo, Nokia pushed into services like email and GPS navigation, but the company was late to touch-screens and failed to counter the rise of smartphones from

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Android phones.

Nokia's long-awaited N8 phone is scheduled to arrive in the U.S. next week, but while the smartphone packs strong features like a 12-megapixel camera, its maker failed to find a key telco partner to help sell it.

"I think they've made the realization that these are handheld computers and you need a software guy to set the company in that direction," said Entner.

The timing of the move is puzzling, said MKM Partners analyst Tero Kuittinen. Nokia is in between operating systems right now -- some of its phones will run on a Symbian system and a new line will run on MeeGo.

Nokia is expected to outline its software strategy next week at its developers summit in London.

"It's a little curious that they bring in a Microsoft executive a week before a big Symbian relaunch," said Kuittinen.

Adding to the curiosity, Microsoft is expected to launch its Windows Phone 7 operating system next month. Neither Kuittinen nor Entner expect Nokia to adopt the Windows system.

One thing seems clear: Nokia is very eager to get a fresh start. Investors seemed to share the feeling, sending Nokia up 4% in early trading Friday.

--Written by Scott Moritz in New York.

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