Nokia handset maker is now positioning as a services player too

The world’s largest handset brand is going all out to prove that there is more to a call than just hardware
If you are planning to go to a ‘Nokia Priority’ store today to buy a mobile handset, you could be in for a pleasant surprise. There’s a lot more to these stores now than mere hardware.
More than a third of the 700-odd retail shops across the country are now Wi-Fi enabled, allowing you to surf the internet. These stores, which earlier used to have only one counter for sales of handsets and accessories, now have four zones — one each for music, gaming, e-mail and navigation applications. The salespersons at each counter will not only help you choose a suitable handset, but will also assist you in choosing songs from the Nokia music store, check email services, choose from different games, and even download songs onto your handset, if you wish.
These Nokia ‘experience’ outlets are, in fact, sending out a clear signal that the $75 billion handset maker is now positioning itself as a services player too. There are many reasons for this key shift in the strategy of the world’s largest handset maker with a 40 per cent market share globally (and over 60 per cent in India).
Nokia have a very large installed base, which is a must for launching a successful services model. They started out by connecting people with calls and SMSs. Now the internet, mobile and personal computer (desktop and notebook) talk to each other as devices converge. This prompted us to redefine their vision to keep in touch with consumers. Since the services and devices are integrated, so that their consumers can buy a Nokia solution.
A possibility is that the move into services comes as Nokia is struggling with falling handset prices and increased competition in the high-end mobile phone market particularly from the likes of Apple’s iPhone and Research In Motion (RIM’s) Blackberry.
But the MD of Nokia insists “this is an evolution and not a change of vision”. The journey towards services began around two-three years back with the launch of the N- and E-series phones where consumers were allowed to “do new things with our devices”.
For instance, in December 2007, Nokia started offering its global positioning system (GPS) and navigation services with the Nokia 6110 Navigator bundled with pre-installed maps of eight cities.
In April this year, Nokia announced the availability of its gaming service, ‘N-Gage’ in India with additional games and an expanded online offering. Around this time, Nokia also unveiled the new addition to its E-series range, Nokia E75, with the Nokia Messaging Service which mobilises email solutions on its devices. Nokia has a subscription-driven model where the payment is made through operators.
After a successful pilot in Maharashtra, Nokia announced the commercial launch of Nokia Life Tools service. It has a range of three primary services -– agriculture, education and entertainment.
The Nokia Life Tools Agriculture service, for instance, is available for Rs 1-2 a day. The Nokia Life Tools Education service, available throughout India, offers three components: Learn English, with basic, intermediate and advanced levels. The Nokia Life Tools Entertainment service includes astrology, news, jokes, cricket and ring tones offered at existing market prices.
All these services are delivered by SMS to ensure that the service works wherever a mobile phone works, without the hassles of additional settings or the need for general packet radio service (GPRS) coverage. Having received a good response, they will launch full-fledged Nokia Life Tools services from October.
Towards the end of last month, Nokia announced the launch of its Music Store service in India. It offers music lovers access to over three million sound tracks across all genres. Nokia has tied up with leading international music labels such as Universal Music Group, Sony Music, EMI and Warner and major independent Indian record labels including T-series, Yashraj Music, Saregama, BIG Music and Venus. The company has partnered with India’s leading music body, Indian Music Industry (IMI), a consortium of over 150 music companies.
Given the low internet and credit-card penetration in the country, Nokia decided to introduce vouchers in their ‘priority’ outlets for music. Besides this, Nokia also bundles music with handsets branded as ‘Comes with Music’ one-year offering.
Nokia also has free downloads with nearly 320,000 applications downloaded globally each month, and India is the most active market for downloads from its ‘Try for Free’ service.
Most of Nokia’s services, except for the Nokia music store, are currently branded under the ‘OVI’ (sub-brand) umbrella. All services will gradually be brought under the OVI fold. OVI, in Finnish, means ‘Door’. “It’s the door to your digital world”.
The “advertising-based” business model for Nokia will take some time to pick up since it needs more active users (those who have used at least one Nokia service in the last six months).
Globally, Nokia is launching a financial management and payment service — Nokia Money which will be rolled out in early 2010. It is promoting these services through its recent acquisition, Obopay, which has a presence in India and the US.
And having sold over 20 million 3G-enabled handsets in India, they are optimistic that “once 3G services are rolled out, data connectivity will only get faster and services only better”.–