(Adds analyst, shares)
By Tarmo Virki
HELSINKI, Sept 29 Nokia Oyj NOK1V.HE is in advanced talks to sell its security appliances business to a financial investor, while it would halt its corporate software development, it said on Monday.
The measures will affect around 700 staff in total, with almost 500 working for the "profitable" security appliances unit.
Niklas Savander, head of Nokia's services and software business, told Reuters the company expects to close the sale of the unit -- which offers products such as firewalls and virtual private networks (VPNs) -- within a few weeks. Nokia will focus on developing and selling corporate phones, while partnering with the likes of Microsoft (MSFT.O), IBM (IBM.N) and Cisco (CSCO.O) on a wider offering for companies.
"This is a significant revision of its business strategy that underlines the magnitude of the challenge facing Nokia in its push into consumer web services," said CCS Insight analyst Geoff Blaber.
Nokia's corporate wireless offering has been built around a $430 million acquisition of U.S. wireless e-mail company Intellisync, which Nokia bought in 2006.
"Nokia's Intellisync solution has struggled to compete with offerings from RIM and Microsoft," he said.
The Intellisync acquisition was not necessarily in vain. Key components of Intellisync are likely to be used in delivering its Ovi suite of services," Blaber said.
After the deal is closed, Nokia's new Services and Software unit will be focused on consumer offerings.
"We believe that with a narrower agenda we can make a bigger impact," Savander said.
Shares in Nokia were 2.7 percent lower at 13.08 euros by 1224 GMT. (Reporting by Tarmo Virki; Editing by David Holmes and Sharon Lindores)