Nokia to tackle Apple with leaner services push

By Tarmo Virki, European technology correspondent

MONACO (Reuters) - Nokia Oyj said on Tuesday it would combine its different Internet services tighter together as the world's top cellphone maker tackles Apple's hugely succesful App Store.

To cope with slowing phone demand Nokia is building a new business from mobile Internet services -- like games or maps -- but is scaling back separate investment plans due to the slowdown, and focusing on merging the delivery of services.

"We are moving into Ovi, into a platform strategy," Tero Ojanpera, head of the entertainment and communities operations at Nokia, told Reuters in an interview on the sidelines of the Nokia developer summit in Monaco. Ovi is Nokia's much-anticipated online store which is set to launch in May.

Nokia, which made its first ever quarterly pretax loss in January-March, is cutting annual costs at its key handset unit alone by more than 700 million euros ($911 million) to counter plunging demand.

Nokia said on Tuesday it would cut up to 360 jobs at its Internet services unit, while it would cut an additional 90 jobs elsewhere in the organization.

The Apple store has proved the market for software supermarkets in the mobile world, with one billion applications downloaded in less than a year.

"As much as iPhone and App Store is a success for Apple, it's a humiliating defeat for the rest of the mobile industry," said Bengt Nordstrom, chief executive of telecoms consultant Northstream.

"Twenty years of efforts from operators and vendors to create mobile applications that customers like is overtaken in a heartbeat by someone that has never done it before," Nordstrom said.