Nokia Corp. is hoping to build a doorway directly to mobile consumers. Again.
But whether carriers will tolerate the move is far from clear.
The manufacturer-cum-mobile-media company last week outlined a surprisingly broad cross-platform play, introducing Ovi-which means “door” in the Finnish company’s native tongue-at its Nokia Go Play event in London. The portal will serve as a gateway to Nokia services as well as a storefront for full-track music downloads, online communities, games and maps from the resuscitated N-Gage platform.
“The industry is converging towards Internet-driven experiences, and Ovi represents Nokia’s vision in combining the Internet and mobility,” said Nokia CEO Olli-Pekka Kallasvuo. “Looking into the future, we will deliver great devices, combined with compelling experiences and services, to make it easy for people to unlock the potential of the Internet.”
N-Gage 2.0
Nokia announced a November coming-out for N-Gage, expanding the brand from a single, gaming-focused handset to a platform for games under the Ovi umbrella. The offering will include a downloadable application for PCs and Series 60 handsets-including phones already on the market-and eventually will be embedded on some Nokia devices.
Games will be available for free trials and will sell for between $8 and $14 each; Nokia said it will also sell gaming subscriptions. And developers and publishers have already lined up behind the new platform: Capcom, Digital Chocolate, Gameloft, Glu Mobile, I-play and Vivendi have committed to producing N-Gage games, and EA Mobile has said it will port its blockbuster Tetris to the platform.
The broad support of gamemakers will be key if the new platform is to address a fatal flaw of the original N-Gage: a lack of compelling titles.
“Old N-Gage games will not be compatible,” noted Ovum analysts Martin Garner and Eden Zoller, “but the service looks well thought-out and incorporates a number of community features that we can expect to see in the mapping and music services later. Also, although it requires developers to write for another platform, Nokia has done well in signing up publishers and looks to have a solid ecosystem coming together.”
Music moves
Perhaps more aggressive, though, is Nokia’s digital music strategy. Ovi’s music storefront will launch “across key European markets this fall,” offering fulltrack downloads for $1.37 per track, or $13.70 for a full album. The service, which will be available initially to users with the Nokia N81 and Nokia N95 8GB model, will also include a streaming radio option for PCs for $13.70 a month. (See handset story on page 4.)
Users can create wish lists from the offering of 2 million songs, play 30-second snippets of tunes or download directly to PCs, automatically synching songs when connected to Symbian S60 devices. And users with N81 or N95 handsets can access the music store from the phones, downloading tunes directly via an upgraded 3-D multimedia menu.
Nokia’s long-awaited music unveiling follows by a week Verizon Wireless’ announcement that it will team with MTV Networks and RealNetworks Inc. on a new music service for PCs and mobile phones. The two Davids are taking aim at Apple Inc.’s Goliath iTunes, which continues to dominate the digital music playground.
Over-the-air downloads give Nokia an important edge over iTunes, and the company’s 900 million handsets in use around the world provide a staggering potential audience. But users must upgrade to new N-series phones to access Ovi-the application can’t be downloaded to current handsets-and while Nokia’s music store could have an immediate impact in some European and Asian markets, the company has no timetable for bringing the service to U.S. shores.
Maps and more
Nokia Maps will offer free access to maps for more than 100 countries, allowing users to search for local businesses and call returned listings with a single click. And Ovi is expected to house at least one social networking service that will provide a forum for users to meet others and share content.
Shares of Nokia jumped nearly 6% following the news and continued to climb steadily through the week.
The far-reaching effort to integrate a series of offerings across mobile phones and PCs stems largely from Nokia’s recent spending spree. The company last year bought Loudeye Corp., a Seattle-based digital music provider, for $60 million, and snapped up gate5-a German developer of location-based technology-for an undisclosed sum.
Earlier this year, Nokia shelled out a reported $100 million for Twango, a Seattle-area site where users exchange photos, video clips and other online content. “Over the coming 12 months,” Kallasvuo said, “you will see us integrate new user interface elements, service suites and Web communities to Ovi.”
Carrier backlash
The coming months could also see substantial backlash from carriers, though, which increasingly are nervous about losing their grip on mobile users. Such concerns led to the demise of Club Nokia, a direct-to-consumer mobile content effort that was shuttered two years ago. Orange UK last week lobbed a pre-emptive strike at Nokia, reportedly warning the Finnish company in a memo that it will refuse to offer the N81 unless the companies work together
to ensure an optimized customer experience.
Nokia is certain to catch even more flak in the United States, where carriers are loath to surrender any face time with their consumers. The company may opt to cut wireless service providers in on the deal though, giving up a share of revenues in exchange for deck placement, billing services or technical support, according to John Devlin of IMS Research.
“Does Nokia feel it has sufficient brand power that it no longer has to worry about the operators’ preferences?” Devlin asked. “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, etc.”
Indeed, while Nokia may have the reach and deep pockets to try to go it alone, the company will try to ally itself with carriers as much as possible to market the new services. Nokia executives have already talked about staking out deck space for N-Gage offerings, and the company will likely look to carriers to help promote new offerings as they come to market.
“Given Nokia’s strong distribution and brand in the emerging markets, this could prove to be a significant opportunity in a market where the first Internet experience may be on a mobile phone,” according to a note from UBS Investment Research, which claims Nokia as a client. “Additionally, Nokia must also work with its operator customers to allay their concerns. Hence, we believe revenue contribution will likely ramp over time.”
