Nokia used its Annual General Meeting yesterday to outline its strategy for growth as the world’s largest handset vendor said it is unclear whether demand for devices has bottomed out. “We published our 2009 first quarter results last week, which have been widely discussed,” CEO Olli-Pekka Kallasvuo (pictured, left) told Nokia shareholders. “It has also been reported that we may not have seen a bottom in demand for mobile devices, which is too early to say.” Kallasvuo went on to focus on its strategy of combining “services with high-quality devices” as it faces competition from traditional device manufacturers as well as new competition from the PC and Internet industries. Kallasvuo noted a customer retention rate of around 55 percent, which he claims is almost twice the rate of global competitors. He talked up the success of the Nokia 5800 Xpress Music device – the company’s first mass-market touch screen device – which, having sold 2.6 million units in the first three months of this year, is tipped to become the vendor’s most successful device ever. “We estimate that this smartphone alone accounts for around 20 percent of all touch screen devices worldwide,” he added.

Kallasvuo also said Nokia aims to take the Symbian operating system – currently used in its smartphones – into lower-priced phones. “Expanding Symbian into lower price points is the right thing to do. We see this as a tremendous opportunity to increase efficiency, to get more scale for Symbian, and gain market share.” Kallasvuo’s upbeat comments came as Moody’s Investors Service yesterday changed its outlook on Nokia to negative from stable, triggered by Nokia’s first-quarter earnings and its gloomy industry forecast for 2009. Meanwhile, Nokia’s joint infrastructure venture – Nokia Siemens Networks (NSN) – continues to be the subject of reports linking it to an acquisition of Nortel’s assets. Reuters today claims NSN has made an unsolicited offer for parts of Nortel’s carrier network group, but as of yet there is no agreement on price or scope of the deal. Bernstein Research has valued Nortel’s wireless business at US$500 million to US$1 billion, and noted an NSN-Nortel deal would hurt sector number three player Alcatel-Lucent, who would miss the opportunity to gain share.