Nov 19 (Reuters) - Nokia unveiled a new

strategy on Wednesday focused on artificial intelligence, as it

strives to simplify its business and boost annual core profit by

as much as 60% over the next three years.

From 2026, the Finnish telecoms equipment maker plans to

split into two main segments, network infrastructure and mobile

infrastructure, the former dedicated to AI and data centres

while the latter will be dedicated to core telecoms activities.

It is now aiming for annual comparable operating profit of

between 2.7 billion euros and 3.2 billion euros ($3.1 billion

and $3.7 billion) by 2028, up as much as 60% from 2 billion

euros in the last year.

Nokia has been struggling with a slowdown in 5G investments

and decided to boost its AI capabilities earlier this year by

acquiring U.S. optical networking gear provider Infinera.

The acquisition has lifted sales and was followed by a

1-billion-euro equity investment from chipmaker Nvidia ( NVDA ),

which bought a 2.9% stake in the Finnish group.

Nokia also said it would launch a new defence incubation

unit to deliver secure connectivity to Western countries and cut

group operating expenses to 150 million euros by 2028 from 350

million euros.

Shares of Nokia were down 6% after the announcement ahead of

its capital markets day event in New York, but are still up 24%

in the year to date.

"Market expectations were higher after (a) strong share

price increase," said Atte Riikola, analyst at Inderes.

PP Forseight analyst Paolo Pescatore said the new

strategy is not a radical departure from its current focus but

added that there were also significant concerns surrounding AI,

given the substantial investment and uncertain returns.