Nokia (NYSE: NOK) may be struggling to keep pace with competitors like Apple (NSDQ: AAPL) and Google (NSDQ: GOOG) in developed countries, but it sees green fields in some of the poorest countries in the world, where the biggest hurdle is whether the users can afford to pay for their services and handsets — not whether their phones have the latest touchscreen technology and applications.
Today, Nokia is expanding its Ovi mobile services to Nigeria. The program, called Life Tools, will charge users $1.75 a month for texts about agricultural information, including crop prices. For an additional $1.40 a month, Nigerians can receive daily texts, with graphics, on health and disease news, English language training or entertainment and sports news, reports the NYTimes.
Of Nigeria’s 152 million residents, only about 29 percent of the population has a phone. In other countries, where Nokia has offered Life Tools, they’ve become quite popular. Since 2009, 6.3 million people have signed up for commodity data in India, China and Indonesia.
The problem Nokia faces is that despite both its commercial and humanitarian efforts in these countries, investors often don’t find selling flip phones at low margins and sending text messages as attractive as Apple’s high margin success in markets like the U.S.
Could Nokia’s more global approach pay off? Nokia EVP Mary T. McDowell conceded to The New York Times in an interview that it’s unclear what the benefits to Nokia will be for targeting these underserved markets. Currently, smartphones account for about 11 of every 13 units Nokia sells, and most of the program’s users already had one of the 20 Nokia models required to subscribe — meaning it generated very few even low-end cellphone sales. “The premise here is that we will be able to complement good hardware with services that will attract and create a sticky situation with the consumer,” she said. “This is not only good business but also about doing good for the community.”