I spent the first half of this week in Barcelona at Nokia World. I was fortunate enough to spend time with many senior Nokia executives in small group sessions with my Forrester colleagues and also one-on-one sessions. There were a lot of big announcements, not least of which was the superb looking N97. But I’m going to focus on Nokia’s content and services strategy. If you’re interested in hearing more about Nokia’s other announcements you should read these posts by my colleagues Thomas Husson and Ian Fogg.
Regular readers will know that I’m not a mobile specialist and indeed until a few years ago I didn’t spend that much time following Nokia. The reason this changed is explicitly because of Nokia’s major shift in strategic direction, in their bid to become a major content and services player, under the Ovi banner.
I’m encouraged to see that the Ovi concept has undergone significant evolution since its announcement last year. At the time of announcement Ovi looked in danger of becoming a poor man’s MSN, AOL or Yahoo. The 20th century portal model of being ‘all things to all people’ is losing relevance in today’s social media dominated world. It made sense when people needed guiding through the Internet and when choice was limited. Now Internet users are savvier and spend time with specialist content destinations and the 21st century portals (TM David Card) such as MySpace and YouTube.
So it’s good to see that Nokia have shifted emphasis and are focusing on developing strong individual content and services brands such as Nokia Maps and Comes With Music. These brands need the space to develop their own identity and brand values. Ultimately Ovi’s character should be shaped as the sum of these parts rather than imposing its identity onto each of them, and this looks like where Nokia is heading.
But there is a fundamental tension in Nokia’s Ovi, and indeed, broader device strategy. The focus of devices such as the N97 is to make the mobile Internet simply the wider Internet on a mobile phone. This openness is admirable and the correct move (many mobile operators mistakenly still believe that they can control much of the mobile Internet experience in their semi-walled garden portals). But at the same time Nokia wants to establish content and services relationships with its customers that put it in direct competition with established Internet brands such as Google, Hotmail and iTunes. Thus, the more that Nokia pushes towards an open-Internet model, the more it implicitly encourages its customers to translate their PC Internet brand relationships to mobile. In short, Nokia aids its competition.
This situation is further complicated by the fact that Ovi is perceived by much of the mobile operator marketplace as being a disruptive force. Nokia’s bid to establish direct-to-consumer relationships is effectively disintermediative (is that even a word?) to operators who are all actively pursuing their own content and services strategies. However much Nokia likes to consider itself inclusive of operators they’ll need to put more meat into the game for operators if they’re going to get them on board. And they need them on board, otherwise they’re not only competing against those Internet brands but also against the crucial element of the mobile channel, who’ll inevitably strike partnerships with those same Internet brands. Nokia needs its allies.
So Nokia certainly has major challenges ahead of it. But its bold ambitions could yet be met. Comes With Music should prove to be a tactical Proof of Concept of the broader Ovi strategy. Nokia were smart enough to understand that they couldn’t challenge Apple by just rolling out a Nokia equivalent of iTunes. Instead they developed a compelling alternative that offered something very distinct, targeted at very distinct target groups.
For Ovi to succeed, Nokia will need to replicate the CWM approach in other content areas. Success, Comes With Innovation.