Sizing up Ovi

Martin Garner, Eden Zoller
31 Aug 2007
00:00

Nokia is preparing to launch Ovi, a front-end portal and umbrella brand for a range of Web and content services, both its own and third party. The initial Nokia services offered via Ovi, which means door in Finnish, include a revamped N-Gage gaming platform, mapping and navigation services, plus a much-anticipated online music store. Ovi will also provide access to the services of existing web partners such as Flickr. An English version of the Ovi portal will launch in the fourth quarter of 2007 in Europe, followed by other markets and languages in 2008.

We will look at the individual service offerings behind Ovi in a moment, but first we want to reflect on the strategic significance of Ovi. Ovi is not a surprise, or at least not to us, and marks the latest step in Nokia's transition from a device to Internet services company. But it is an extremely big step and could trip Nokia up if it fails to deliver. Nokia is positioning Ovi as a premier portal to what it promises will eventually be a very full set of Internet services. Ovi goes way beyond being an iTunes killer in Nokia's mind.

The portal concept is nothing new, but it does gain new currency in the context of converged fixed mobile Internet services. This can be fragmented, difficult terrain to navigate and consumers will increasingly need a single place they can go for easy to use, personalised access to a wide range of services. Players that can offer this kind of universal portal will be in a powerful position, and of course it helps if you can also offer a portfolio of optimised devices to support the whole experience.

One of the many challenges facing Nokia here is that that it is not alone. Mobile operators like Orange want to do similar things and could be alienated by Nokia's strategy. Big Internet brands like Google and Yahoo are also lining up in a less overt way and could really shake things up going forward.

Ovi is just a word at the moment with no resonance in the consumer market. Moreover, the range of services behind Ovi are modest, although Nokia promises to expand them during the first half of next year. The sort of things we expect to see are developments around social networking based on the recent Twango acquisition. We would also expect to see further Internet Partnerships announced, with YouTube looking like a frontrunner here.

Nokia's mapping service, which will be included in Ovi, has already launched and is shipping pre-loaded on the N95 and E90 (and available for download to other devices). The N95 hit a wider market than anticipated, and we now hear from Nokia that 100% of N95 users have used Nokia Maps and 22% have bought the navigation service upgrade. This is an encouraging start for Nokia, which has very ambitious plans for what it can do around mapping.

The new music store was shown in beta, with some areas clearly not working yet. It received a mixed reception because it is launching into a very crowded market and its functionality is below some of the leading stores already out there. Nokia aims to compete on quality of the overall experience across PC/phone/web with good integration between these as a key aspect, and breadth of local music.

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