Nokia takes big leap into mobile content

05 Sep 2007

While many of the media reports on Nokia's Ovi launch have focused on its direct competition with Apple's iTunes service, analysts say Ovi goes way beyond being an iTunes killer in Nokia's mind, and the Finnish mobile phone giant is thinking bigger.

'Ovi is not a surprise and marks the latest step in is transition from a device to an internet services company,' said Ovum analysts Eden Zoller and Martin Garner in a research note. 'But it is an extremely big step and could trip Nokia up if it fails to deliver.'

Nokia is positioning Ovi as a portal to what it promises will be a full set of internet services. Ovi will act as the front-end and umbrella brand for a range of in-house and third-party web and content services, including the new N-Gage gaming service, mapping and navigation services, and a much-anticipated online music store. Ovi will also provide access to the services of existing web partners such as Flickr.

'The portal concept is nothing new, but it does gain new currency in the context of converged fixed mobile internet services,' the research firm said. 'This can be fragmented and difficult to navigate, and consumers will increasingly need a single place for easy-to-use, personalized access to a wide range of services.'

Ovum believes that Nokia will be in a powerful position if it can offer this kind of universal portal as well as a portfolio of optimized devices to support the whole experience.

One of the biggest problems for Nokia, however, is that it is not the only player doing so.
'One of the many challenges facing Nokia here is that it is not alone. Mobile operators like Orange want to do similar things and could be alienated by Nokia's strategy,' the report stated. 'Big internet brands like Google and Yahoo are also lining up in a less overt way and could really shake things up.'

John Devlin, head of IMS Research's Mobile Technologies Group, says although Nokia's move may not be welcomed by mobile operators, which have been very protective of their own service revenues and have fought hard to protect these with the walled-garden approach, the two still need to work with each other.

'Perhaps it will offer the operators a slice of the action in return for cross promotion because at the end of the day, it still needs them to act as a service provider, even if only in a 'dumb pipe' capacity, but someone has to take care of billing, SIM provision,' he said.

'The fact that Nokia has also announced phones tailored to maximize these services may appeal to operators as well; it shows strong support and should help drive uptake and level of use,' Devlin said.

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