Nokia's strategic shift into mobile internet services received a boost on Wednesday when the Finnish mobile phone maker announced Vodafone would become a customer of its new Ovi portal.
The deal underlines the dynamism of the mobile industry, coming days after Google announced its
mobile strategy and just before Apple's iPhone launches in
Europe.
The agreement with Vodafone shows how much clout the world's largest handset maker can exert over operators. The Vodafone agreement follows a similar deal with Telefónica last month.
Nokia faced scepticism in August when it launched the Ovi brand, with many industry observers concerned that the service - which offers music, games and maps - would be in conflict with operators who hope to make money from similar services. However, it is now seeing some of the largest telecoms operators supporting the project.
Nokia's deals with Vodafone and Telefónica show that the Finnish group will be a considerable force for Google to contend with as it moves into the mobile market. Nokia's Series-60 operating system is a well-established competitor to the mobile operating system Google is planning to bring to the market and Nokia offers competing online services such as maps, which operators appear willing to adopt - even at some cost to themselves.
Vodafone, for example, has invested heavily in building up its own music store since launching its Vodafone Live! portal in 2002, but has now agreed to allow its customers easy access to Nokia's music service as well.
In exchange, Vodafone's services will be deeply integrated into Nokia's high-end phones, and Nokia will make a number of exclusive phones for Vodafone next year.
Nokia has about 38 per cent of the global market for handsets and the chance to have its services featured prominently on a Nokia mobile phone is an opportunity even the largest operators cannot ignore.
In supporting Ovi, Vodafone is effectively admitting that its efforts to create user loyalty through branded services have failed.
In supporting Ovi, Vodafone has stopped fighting against the inevitable and is allowing the Nokia brand to become uppermost in the user's mind," said Richard Windsor, analyst at Nomura.
However, by offering its services through Ovi, Vodafone is likely to see better take-up than going it alone."
Frank Rovekamp, global head of marketing at Vodafone, said that though the music services would overlap, this was part of a broader alliance with Nokia that he was keen to develop. Vodafone will share revenues with Nokia on services such as maps and games.
Mobile operators are under pressure to improve their web-based services as devices such as Apple's iPhone enter the market.
Source:http://search.ft.com/
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