Ah, to be a cell-phone maker in the age of the iPhone. At Nokia--which has more than a third of the global market and more customers than its three closest competitors combined--sales targets are down, the stock price has been halved, and the forecast for the year ahead is gloomy. No wonder the Finnish company is determined to be more than a handset maker.

Nokia continues to invest in cell-phone R&D, pursuing the promise of the E71 Smartphone (which came closest to answering the iPhone's design throwdown) and the N97 (which offers 32-gigabyte capacity for media and apps, a 5-megapixel camera, and GPS functionality). But it is the company's increasingly robust Ovi mobile portal that points the way to Nokia's next incarnation: as a one-stop shop for syncing music, games, and videos. Tellingly, the company has opened a research facility in Hollywood. Just as Nokia evolved from a paper mill to a rubber producer to a telecom giant, it is now preparing for its next transformation into a full-fledged multimedia entertainment company.

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