October 1, 2007
Nokia said in August it will assemble all its Internet services under the “Ovi” brand, which means “door” in Finnish. Ovi will include Nokia Music Store, N-Gage games and Nokia Maps, and more Internet services will be added.
Nokia’s music store, coupled with devices that can download songs directly from the service, will make the Finnish company a competitor to Apple Inc.’s iTunes.
Last month Nokia agreed to buy Boston-based marketing company Enpocket to add technology for placing advertisements through text messages and e-mail. The mobile advertising market is dominated by Google Inc. and Yahoo! Inc. Global sales are estimated to rise to $11.4 billion by 2011 from $2.17 billion currently, according to Informa Telecoms & Media Group.
One of the new units will be called services and software as the company aims to capture more revenue outside traditional handset and network sales.
Sounds like a play to become a more services-oriented company and rely less on phone hardware sales for revenue. They will sell services and possibly provide content and monetize it with ads. With maps, a music store, and more around the corner, it seems possible that they would go after the iPhone knowing very well it would increase sales of their phones (not to mention concern over maintaining their own marketshare with the iPhone going international and rumors of Google’s GPhone popping up regularly).
What does this mean to new competitors?
…here’s the rub: Garmin last quarter was one of two 10% customers of Navteq; the other was BMW. If Nokia, through its phones, becomes a competitor to Garmin, does Garmin shift to a Navteq competitior (not good for Nokia) or does Garmin team up with Nokia/Navteq to somehow capitalize on the cell phone/navigation phenomenon?
Nokia claims it will continue to support the Navteq customers…but for how long?