The Future’s Not So Orange for Nokia

Nokia’s anticipated digital music offering has already come up against its first hurdle prior to any public announcements even having taken place. French telco Orange is reported to have threatened not to offer the (also anticipated) N81 music phone to its subscribers unless Nokia

“agrees to work with the operator to ensure that customer experience is paramount.”

Though the spin here is on customer service, the bottom line is that this is indicative of more fundamental tensions that Nokia is stirring up. If Nokia was to launch a digital music service it will be an explicit competitive and disruptive threat to those run by operators such as Orange. Yet Nokia depends upon those same operators to market and subsidize its handsets to consumers. This is exactly the same dynamic that Apple is creating with its iPhone, but the difference here is that Nokia is an established part of the mobile value chain. So Nokia should be better positioned to understand the concerns of its partners and to assuage them…at least to the extent it is willing to do so.