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Why Nokia's Service Efforts Have Fallen Flat

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nokia_logoNokia’s struggles over the last couple of years are well-documented: The Finnish handset manufacturer has watched its Symbian platform consistently lose market share in recent years, falling from a staggering 73 percent in 2006 to 51 percent in the second quarter of this year. And as the smartphone space has heated up, Nokia has spun its wheels in North America while Apple and RIM produce enviable margins with their high-end devices.

But Nokia’s attempt to morph from manufacturer to mobile Internet services provider has been even more painful to watch. The launch of its much-anticipated Ovi Store earlier this year was deemed “a complete disaster” due to its being plagued by glitches, and while its new mobile e-mail service has gained traction in emerging territories the offering has yet to find an audience in Western markets.

The problems with Ovi, though, have been in the execution — not in the concept itself. The ambitious offering has been rushed to market in an ill-advised effort to catch up to Apple’s App Store, resulting in a confusing storefront that can be nearly impossible to navigate.

Comparing the App Store to Ovi is unfair, of course. Apple supports only two handsets (the iPhone and iPod touch) while Nokia is attempting to support a host of devices, including both Symbian- and Java-based phones. And while Apple has effectively leveraged close ties with carriers, Nokia has stuck to a lone-wolf strategy, opting to compete with carriers’ own data services rather than forging partnerships with them. That tack has alienated some Western network operators — which is why the company’s current flagship phone remains far too expensive for most U.S. consumers, and why Ovi doesn’t leverage a carrier-billing relationship in the U.S. (Not that irritating its carrier partners is anything new for Nokia.)

Nokia’s new netbook doesn’t seem to be changing perceptions yet, and I think the company’s tie-up with Microsoft is nothing more than a distraction. Nokia’s position as the world’s largest handset manufacturer can’t be discounted, though, and gives Ovi a huge competitive advantage over many of the other app stores coming online. If the company can give Symbian a major facelift and learn to play nice with carriers, Nokia will become a force to be reckoned with in the era of the superphone. If not, it will be just another phone maker — one that continues to lose ground to Apple and RIM.

8 Responses to “Why Nokia's Service Efforts Have Fallen Flat”

  1. One important point missing about Ovi Mail is that it’s target is NOT Western countries anyway, it is the emerging markets where people don’t have a computer and Ovi Mail is their first email account. And from that target it is extremely successful.

    It seems that the US always judges everything Nokia does from an extremely narrow viewpoint and don’t seem to realize how much effort is going into those new markets where the potential is enormous. How about the schemes started by Nokia to allow villagers in India to purchase a phone by small monthly payments?

    Most of the comments about Ovi are also from the launch when it suffered overload. You almost hear nothing now because it basically works fine.

  2. “If the company can … learn to play nice with carriers”

    Sorry but I think this is ass-backwards — it’s the carriers who are standing in the way of device-makers. The sooner they realize that they are nothing but dumb pipes the better, for everyone.

  3. The N97 reminds me of a 1978 Chevy Malibu. Nokia is starting to remind me of GM. There could be some goodness in Maemo but Maemo and Ovi are sounding a lot like Saturn. While there were few places quite as insular as Detroit in 1978, I am seeing increasing evidence that Espoo is similarly isolated from some of the big big things happening. Here in California where everyone was driving Civics and Accords while the heartland was wallowing around in Crown Vics and Caprice Classics, I went to see District 9 in a local theater and looked around at the phones people had out before the movie. 9 or 10 iPhones and 1 featurephone.

    I recall having heard of Ovi for a long time, but the first time I tried it the appstore thing wasn’t even available for the E71, which is sad since the E71 is one of the best and most popular phones they have. Really is a damn nice phone. Works now and has even been improving, but is still awkward to navigate and hard to find stuff in. Sorta like a microcosm of the whole S60 experience.

    Anyway, I like Nokia and think that they build good hardware. I still think that something like the N97 with Android would be awesome. Not sure how clueful they are or will become with software or services. Sometimes you gotta play to your strengths.