Confirming its move into wireless multimedia and games, Nokia (NYSE:NOK) said it would reorganize its business operations into four units effective Jan. 1, 2004. No longer will Nokia Mobile Phones rule the roost with an ailing Nokia Networks and small Nokia Ventures. The company's Big Four will be Mobile Phones, Multimedia, Networks, and Enterprise Solutions. Shares bumped up 1%-2% on the news.

Mobile Phones and Networks are familiar to investors, but Multimedia and Enterprise Solutions will replace Nokia Ventures and break out in new directions. Multimedia will develop and flog wireless content from games to images, while enterprise solutions oversees "end-to-end mobility architecture" or more prosaically wireless business integrated hardware and software systems.

But phones won't all be in Mobile. Phones with cameras would fall under Multimedia, while the Enterprise Solutions unit would oversee the is-it-a-PC-or-is-it-a-phone communicator.

Among the executive moves, current CFO Olli-Pekka Kellasvuo will run Mobile Phones, while Rick Simonson will replace him as CFO and senior vice president. Simonson is the first American to move into Nokia's upper echelon. Current Chairman Jorma Ollila, under contract through 2006, remains in place.

The number one wireless handset maker faces crushing competition in its core mobile phone business primarily from Samsung (OTCBB: SSNFF), and in wireless operating systems from Microsoft (NASDAQ:MSFT) and Motorola (NYSE:MOT) (Nokia recently purchased Motorola's share of the wireless operating system venture Symbian). Though Nokia's gross margins have increased year over year for three of the last four quarters to 42% -- a high for periods we reviewed going back to 1996 -- operating and net margins have not kept up.

Having endured the decline of the Networks business, Nokia is still a phenomenal free cash flow-generating machine. Yet shares sell for an enterprise value-to-free cash flow (FCF) multiple of 10 and a market cap 12 times FCF, suggesting the market views skeptically its potential for cash-generating growth from current levels.

Motley Fool Senior Analyst (and this month's guest analyst for our Hidden Gems newsletter) Tom Jacobs disagrees with the market's skepticism over Nokia. Last month, he purchased shares for the sleep-at-night portion of his portfolio. Find a rainbow of opinions on our informative Nokia discussion board .