Mobile Services To Help Nokia Take On US Market
By Dianne See Morrison - Mon 10 Dec 2007 03:28 AM PST
Nokia (NYSE: NOK) wants to re-take its lead in the US market, and mobile telephone services are at the heart of its strategy to boost its share. As recently as 2004, Nokia was the leader in the US cell phone market, with a share as high as 28 percent. But it stubbornly refused to adapt its handsets to the US, with its patchwork of network technologies and consumer taste for clamshell phones. Nokia’s US sales plummeted, and three short years later, it ranks fourth with a share as low as 10 percent.
But a chastened Nokia, buoyed by its success in the global handset market where it increased its share to 39 percent in the third quarter of 2007, and the weakened position of Motorola, (NYSE: MOT) is ready to play to the American market, according to an indepth article from the New York Times, looking at Nokia’s chances.
Standing in its way are Apple (NSDQ: AAPL) and Google. Apple’s threat comes from the hardware side, of course, in the form of its iPhone, which has has humbled operators into submission--making them pay them for each customer Apple’s iPhone delivers to the network. Moreover, judging from the way that AT&T (NYSE: T) CEO Randall Stephenson has been crowing over the iPhone, it’s a price the networks are willing to pay. Though Apple’s shipment of 1.4 million iPhones since June is less than half of the N95’s Nokia shipped, the Finnish handset maker considers it a very strong threat. As Nokia’s EVP for mobile phones Kai Oistamo told the NYT, “If you don’t strive to be cool, to be on the edge you run the risk of becoming irrelevant.” Google’s attack comes from the software side, with Android, its open source platform for mobile devices. Google (NSDQ: GOOG) did not invite Nokia to its open handset alliance--though rivals Motorola and Samsung are part of it. Nokia CEO Olli-Pekka Kallasvuo said of Android, “We’ve seen an announcement. Conceptually, we could have made that announcement a long time ago.”
Nokia has been busy this fall, furthering its own Internet strategy. In October, it bought digital mapping and navigation software provider Navteq for $8.1 billion to eventually offer customers location-based services--which it has high hopes for as a unique selling point for mobiles. A week ago, it announced a deal to give customers a year’s free access to Universal’s music catalogue. The service isn’t without its snags--the music isn’t DRM free and customers will have to upgrade to a new Nokia phone if they want to continue the service beyond the year’s access. It has also struck deals with Vodafone (NYSE: VOD) and TIM, to carry Ovi, its mobile web portal. A previous attempt, called Club Nokia, saw Nokia butting heads with operators, who didn’t want the handset maker undermining their relationship with subscribers.
Posted in: Companies, Apple, Google, Music Labels, UMG, Nokia, Operators, Vodafone, Entertainment, Mobile Music
