Saturday, October 13, 2007

Nokia Ovi - A tough door to open

On August 29, 2007, Nokia unleashed its ambitious plan to offer mobile services under the umbrella of brand name Ovi. As the photograph of the presentation by Mr. CEO Olli-Pekka Kallasvuo, President and CEO of Nokia, says it all - Devices are simply not enough.

Under Ovi umbrella, Nokia plans to unroll a fleet of internet based services in the next coming months. Nokia has started with the basic and necessary services: photographs, maps, music and games. While Ovi aims to converge all services to a single platform; it also provides the flexibility to access those services from anywhere, a mobile device, PC or internet.

In the present world, the mobile services industry is not mature enough to fulfill the demands of subscribers. Telecom providers invested heavily to upgrade their networks to support higher bandwidth so that users can subscribe to such services, but the content and access to that content were not on par to persuade the subscribers to use these services. On an alternative path, mobile phones made it possible to access internet on their mobile devices and use all the services as they have been using from a desktop. New mobile phones, now come with full html browser, support this theory.

However, the launch of Ovi opens a new horizon for the mobile service industry by tightly coupling the mobile phone with the services offered to access the content. This will help Nokia to create applications, which will be easier to use and have better user experience. Very similar to what iPhone and iTunes are for each other, though on a much bigger scale. Nokia gives the telecom providers and end users a new offer - buy our phone and use our services to keep and access your content. And telecom providers keep doing what they are good at - managing networks.

Ovi also claims to provide consumers easy access their existing social network, communities and content along with acting as a gateway to Nokia services. The success of Ovi solely depends upon its ability to convince more subscribers to use its services and Nokia will expect less number of subscribers using services outside Ovi. Nokia will be counting on the quality of content, easy access, deployment, pricing and usability of such services to expect the user to switch to Ovi. However, the content providers on world wide web and competitors will not loose their customers to Nokia that easily. While it will be difficult for Nokia to convince an existing subscriber of such services to use Ovi, the penetration of such services are so low that there are plenty of new subscribers, who will be ready to opt for Ovi if they are offered with the relevant contents, lucrative pricing and easy access.

The launch of Ovi definitely puts Nokia ahead of its competitors Ericsson and Motorola. The telecom industry has a strong demand of such services, which so far, the market has been unsuccessful to deliver. In a recent press release on GSM World, a GSM global trade association, AT&T claimed to have more than 5 million 3G subscribers, which is still less than 10% of the overall mobile subscriber base.

The Ovi services will be launched in Europe first and subsequently they will make their move in America, as the trend has normally been. Few days ago, Nokia signed a deal with Telefonica, a Spanish telecom company, and the industry will carefully observe the first launch of Ovi and take notes of its success.

Nokia has definitely opened a new market of mobile services and soon its competitors will follow the same path. It will not be long before these services will be an value addition to the telecom providers and a reason for subscribers to choose a particular telecom provider.

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