Nokia Will Produce Half As Many Smartphones In 2010; Forecasts $3 Billion In Service Revs In 2011

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Nokia (NYSE: NOK) developed about 20 smartphones this year, but expects to cut that number in half next year, as it fights increasing competition in the market, Reuters reports.

While the tactic seems contrary to common sense, Jo Harlow, the new chief of Nokia’s smartphone unit, defended the idea in webcast published on Thursday. “We see … really fierce competition certainly in the high-end, but we also see it in the mid to low end of smartphones increasing,” he said. “We will defend our position, but we believe we also have tools to play offense as well as defense.”

Harlow, who was the former captain of Duke University’s women’s basketball team, was appointed head of the new unit in October, after the firm reported a sharp fall in smartphone market share, losing out to Apple (NSDQ: AAPL) and RIM’s BlackBerry.

The big question about Nokia’s smartphone strategy is what operating system it will use. Up until now, it’s relied on its Symbian operating system, but has recently branched out to making devices on Maemo, as well. Nokia’s CEO Olli-Pekka Kallasvuo pledged his commitment to Symbian on Wednesday, saying it would remain the key software platform on its smartphones, according to the WSJ. Kallasvuo: “In 2010, we will drive user experience improvements, and the progress we make will take the Symbian user interface to a new level.” And, while there will be fewer smartphones developed, he said a greater proportion of Nokia smartphones will have touch screens or full QWERTY keyboards. Overall, Kallasvuo said he expects global handset volumes to rise by 10 percent, following a period of sharp contraction.

As part of the company’s strategy, it is focusing on applications for its phones, and hopes to hit $3 billion (

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