As the Internet goes mobile and companies like Apple and Google find cool ways to embrace the trend, the mobile market leader Nokia is rewriting its product development rulebook. Instead of working in secrecy and isolation, it wants to start sharing.

"For Nokia this is probably the biggest throw of the dice since they entered the cell phone business," said Ben Wood, research director at CCS Insight, who has followed the Finnish firm since 1994.

We look into how and why the company is changing.

A popular video on Youtube shows a 'concept phone' that could -- literally -- bend to fit your wrist. Called Nokia Morph, it's also an image of how the world's largest mobile phone maker wants to change.

To make its move in Internet services, Nokia plans to use its base of one billion customers -- one-sixth of humanity -- to consult on what works, what wows, and what doesn't. Compared with Apple's much-hyped iPhone, which has sales of just 5 million so far, its customers put Nokia in a strong position.

Besides putting up futuristic ideas on video-sharing sites -- like the Morph concept, which imagines a stretchable, flexible, solar-powered, self-cleaning device which also has a sense of smell -- Nokia has invited bloggers and tech-savvy media specialists to brainstorm on future mobile products.

"We realised in early 2005 that if we only focused on innovation from within, we were limiting our scope for real breakthroughs," Chief Technology Officer Bob Iannucci told Reuters in an interview. "We want more wild ideas."

Till some time back, the process of developing and testing new phone models at Nokia was like a state secret, and the results haphazard.

Wood of CCS Insight said that in the past Nokia would develop products "behind closed doors in a room with no windows. With some products I asked them: had they shown them to anyone?"

In 2003 reviewers and customers laughed at Nokia's gaming phone, which had to be held awkwardly, sideways, to make calls. The same year Nokia introduced its first media phone, the bulky 7700, but withdrew production plans after heavy criticism.

In the past few months, Nokia has strengthened its focus on services. Taking a leaf out of its IT peers IBM and HP's growth trajectory, Nokia is turning from hardware to software and services.

As the personal computer commoditised, IBM and HP similarly sought new business. Little doubt then that several of Nokia's recent launches aim to direct users to its Internet services instead of Google's, or to its music stores instead of Apple's iTunes.

But while Nokia experiments, its profit margin on phones, which rose to 23.6 per cent in the quarter to December, is a cushion. Margins at Nokia's best-performing rivals -- Samsung and Sony Ericsson -- are at half that level.