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Mobile email remains the key driver of enterprise uptake of wireless technologies. Increased productivity and flexible working practises, end user demand and relatively simple deployment make email the safe bet in a mobile enterprise strategy. Yet the market is still relatively untapped - in the US, market leader RIM has a base of 1.5m, but Yankee Group estimates there are 50m mobile workers. It is partly on that gap that Nokia seeks to build its enterprise strategy, perhaps the most critical element of its roadmap to regain market share, to reduce its dependence on the cellcos, and to achieve a Microsoft-style influence based on software, in the second half of this decade.

The device war

The most immediate objectives for the year-old Nokia Enterprise Solutions company are to supplant RIM BlackBerry and PalmOne devices, making Nokia handsets the number one mobile device in use for corporate applications. Email is a good first source of attack, since most companies start their mobilization strategies with that application and then build more complex applications on top, using the same devices. This makes the mobile middleware space strategically critical, and Nokia seeks to own it. Sales of mobile middleware grew by more than 27 per cent in 2003, year-on-year, according to IDC, showing the increased pace of mobilization, largely driven by email.

Victory in this quest against PalmOne and RIM would not just boost hardware sales, but would be a blow to Microsoft, whose Windows Mobile is strongest on enterprise-focused PDAs such as the Hewlett Packard iPaq. Breaking the Windows hold on corporate software is Nokia's most ambitious aim, and one that is not just important in the enterprise market itself, but in the broader cellphone industry.

The main reason for Windows-based smartphones to gain traction is the preference of some large companies to have an all-Microsoft client device base, and of corporate-focused developers to work with .Net languages on all platforms. Any chinks in Windows' armor in the corporate world make it less likely that Windows will make headway on smartphones in general, strengthening the position of technologies that Nokia influences or controls, such as Symbian OS and Series 60.

Role of RIM

The most powerful weapon in fending off the BlackBerry is, of course, the BlackBerry software, which is now available on some Nokia handsets, enabling companies to stick with the email software they are used to, but to adopt a mobile device with far greater potential to support other applications like, perhaps, salesforce automation. The main brake on Nokia's roll-out of BlackBerry-enabled products has been the ongoing patent battles between RIM and intellectual property company NTP, which has left the threat of an injunction against BlackBerry products hanging over RIM's head for over a year now. A victory for NTP would not kill the BlackBerry - RIM would be forced to make a compromise deal - but Nokia needs to steer clear of becoming an even more attractive target for the patent hoarders.

It is seeking to create devices that are highly advanced compared to BlackBerry and the PalmOne ranges, notably the 9300 smartphone and the dual-mode Wi-Fi/cellular 9500 Communicator, whose pre-release orders amounted to 50 per cent of the total of all previous Communicators sold. It will also offer a wide range of third party software and middleware in order to attack the vital mobile email market from all sides. It has partnered this year with Good Technology, Visto and Smartner, as well as offering its own Eizel software, in order to offer a wide range of approaches to the most critical partners, the enterprise integrators.

In particular, IBM Global Services is a key support for the Nokia ambitions, something flagged up when the two giants launched the 9500 Communicator as a joint product. IBM has optimized its WebSphere Everyplace Client for the 9500, the first solid fruits of its 18-month old technology alliance with Nokia, and SAP, Siebel, Computer Associates, Oracle and Symantec will also support it as they push their applications out to mobile clients.

Enterprise unit progress

Email, new devices and security will be the cornerstones of Nokia's enterprise strategy in the short term. There have already been a few setbacks on the hardware front, with schedules for four new handsets, planned for early 2005, being pushed back as the company works on advanced device management and security features that are being demanded by corporate customers.

Although the head of Nokia Enterprise, Mary McDowell, expects revenues to rise by 80-100 per cent in 2005 (in the last quarter, Q3, they were $222m, up 52 per cent year-on-year), the delayed handsets will probably postpone profitability until early 2006.

On the security side, Nokia has introduced the IP2250 and IP1260 appliances for enterprise network security and management, and has upgraded its Secure Access System and Wireless Accelerator products for remote access to enterprise data. Firewalls, virtual private networks and other security items will be the main growth driver in 2005, even as the mobile email partnerships remain the most strategic play.

Copyright © 2004, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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