Nokia vs. Google: The battle escalates

Jack Ewing
15 Feb 2008

The battle for Internet turf is no longer just a figure of speech. Nokia (NOK) on Feb. 11 announced a quartet of new handsets designed to more closely link global positioning systems (GPS) with the mobile Internet, bringing the Finnish company into more direct competition with Google Maps and staking a bigger claim to the emerging market for so-called location-based services. The announcement came on the same day that Google (GOOG) encroached on Nokia territory by demonstrating a prototype of its Android operating system for mobile phones.

Both companies are betting that where people are located will become an important part of how they use the Net. Nokia is trying to claim that arena with handsets such as its new, top-of-the-line N96. The device allows owners to shoot videos, 'geotag' them with info about where the images were taken, and upload to a Nokia Web site that sounds suspiciously like Google's YouTube.

Mobile devices take the lead

Of course, the GPS-equipped phones also help people find their way around, using satellite signals as well as the cell-phone network to tell customers where they are and to provide travel directions. A new feature gives instructions designed specifically for pedestrians, in contrast to the systems that provide driving directions now prevalent on the market. Thanks to Nokia's planned acquisition of mapping software company Navteq (, 10/1/07), the cell-phone giant is gearing up to compete with Google in mapping as well.

As a maker of devices rather than just software, Nokia thinks it has an advantage over Google as people increasingly access the Internet while they're mobile. Cell-phone keypads and software are less standardized than PCs, making it more difficult for companies to let their customers easily surf the Net. Like everybody in the industry, Google is still feeling its way in the nascent mobile search and ads business, as evidenced by the company's recent announcement (, 1/24/08) of its partnership with Japanese cellular giant NTT DoCoMo (DCM).

Nokia has 40% of the global handset market and more than half of the smartphone market. That and its software prowess give the company great clout to determine the standards that will be used to access the Internet via handheld devices. 'I don't know if we're in a position to decide,' Anssi Vanjoki, Nokia executive vice-president for markets, told BusinessWeek. 'But Nokia's power position will certainly influence the development of different interfaces.'

Nokia's new line of handsets

Part of Nokia's power comes from its ability to develop a broader array of products than its competitors. That was on display in Barcelona, where much of the mobile industry was gathered for the 2008 Mobile World Congress (, 2/8/08). The company introduced four handsets designed to extend the limits of what a mobile device can do as well as to make wireless Web and GPS functions more accessible to the masses.

At the high end, the $800 N96 is similar to the previous top-of-the-line N95, with features such as GPS and high-quality video recording, but it features a bigger screen and improved ability to play TV programs digitally broadcast over the air or streamed via mobile networks. The N96, due to hit stores sometime after midyear, includes a 'kickstand' allowing it to be propped on a surface for watching video. It also has a 16 gigabyte memory so it can store whole movies.

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