Only rarely does an enterprise view mobile phones as a strategic purchase. For most business users, phones are treated, if not as disposable, then as equipment with a short working life. This is especially true in markets such as the UK, where phones are subsidised heavily by the mobile network operators.

This poses a problem for any handset maker that wants to be seen as a long-term partner for businesses. That, though, is what Nokia wants to achieve.

In January last year, CEO Jorma Ollila reorganised the Finnish company into four operating divisions. The Mobile Phones, Multimedia, Networks and Enterprise Solutions divisions are each aligned to specific markets. In comparison to the other three units, Enterprise Solutions is a minnow – and one with the hardest task. Its revenues only amounted to E198 million in Nokia's most recent quarter, which ended 30 June 2005. And, as its hefty losses show, the division is still in the "investment phase". While all the other units are now highly profitable with operating margins of between 9% and 16%, Enterprise's losses in the quarter worsened to E76 million from E62 million in the same quarter in 2004.

Tero Ojanperä, chief strategy officer at Nokia, lays out the mission statement: The enterprise group must provide market-leading devices and supporting infrastructure that dovetail with core enterprise applications and activities. "We have started with compelling devices," he says. "But it is not enough. You need applications, and the ability to connect to back-end enterprise systems, whether new or legacy."

But Gartner analyst Ben Wood suggests that Nokia might not yet have a sufficiently compelling mix of offerings for business customers. He points out that only the 9300 smartphone is a product designed from the ground up by Enterprise Solutions. It provides a mobile virtual private network client optimised for business use and support for the IBM Tivoli Device Management platform, plus real-time encryption and firewall and anti-virus software from Symantec.

"How long will it take for Nokia to launch enterprise products beyond the 9300?" he asks. "The 9500 Communicator [its predecessor] is now a legacy product, so the 9300 is the first unique [business] handset it offers."

Alongside the smartphones and nine other phones it categorises as business devices, the enterprise division also sells messaging devices and firewalls, both of which are struggling to grow.

Nokia's enterprise efforts at least point to a commitment. So far, its competitors have not shown they have much appetite to go after the business market in such a targeted way. However, Wood cautions that its small size means that Enterprise Solutions might not be first in the queue at Nokia for vital resources, especially in research and development.

IT executives provisioning mobile services will inevitably be concerned that Nokia's attention will always focus on the larger and more exciting consumer and multimedia product areas. But developments in the multimedia category, in particular, will drive improvements for business devices. Larger screens, mass storage, including hard drives, and faster radio interfaces will all find their way into business phones in the future. Arja Suominen, Nokia's head of communications, points out that the vast scale of the company's mass-market consumer operations also gives it buying power for components that can only drive down prices for business.

While other phone makers have done little to address the business market, Nokia also faces competition from PDA makers, such as Hewlett-Packard, Dell and Acer, who are improving the basic phone capabilities of their devices. In contrast to such PDAs, Nokia's devices are driven by the Symbian operating system. This leaves it vulnerable, according to Gartner's Wood, to competition from vendors using the Microsoft Windows Mobile standard. Windows Mobile has some advantages in cross-device application compatibility and user interface consistency that are deemed valuable by some business users. But with Nokia shipping 6.7 million of the 12 million smartphones sold in the second quarter, the company's influence among business users will remain strong for some time to come.