Feeds

Smoke free Nokia looks for a spark

Pleasing people who never pay for anything. Will this work?

Providing a secure and efficient Helpdesk

MWC Trade shows tend to expire pretty quickly once the biggest exhibitors pull out. The small fish are there to do deals with slightly bigger fish, and if they're absent, or only present half-heartedly, there's a chain reaction down the industry.

While Nokia is in Barcelona this week, it isn't at Mobile World Congress. Nokia had a simple message, and it didn't let announcements of any new smartphones distract from its message. Because there weren't any.

So what else wasn't Nokia doing? Attendees at Monday's press conference heard a relentlessly upbeat pitch for Nokia's Ovi services. Ovi Store, the Music Stores, Messaging, Comes With Music… they're all going to be great successes, Niklas Savander assured the audience. The revamped Ovi Maps is popular, but giving away free sweets always is. Savander sidestepped concerns about recouping on Nokia's big mapping acquisition. Nokia plunked down $8bn for Navteq, and in the last quarter the division made a profit of €54m on revenue of €225m. So it'll be around 37 years before it pays back on the investment.

"[Free] Ovi Maps helps monetize Navteq," said Savender. As if anticipating the puzzled looks, he said that billing costs were lower if you gave stuff away for free. Which is undoubtedly true - just as you save on solicitor's fees if you give away your house. To be fair, he hinted that advertising could support the Great Maps Giveaway, which is something that hasn't been tapped by anyone yet.

If you want an eloquent analysis of such strategies, look no further than Fake Steve's "It's Official: Java now worth nothing" from 2006. Which also foresaw, quite uncannily, some of the problems spinning out Symbian would have. All we know for sure is that Sun got really popular with guys who don't like to pay for stuff. Err... Win?

The Trouble With Ovi

I can't help feeling there's something a little complacent here. Profitable services tend to exist where there's very little competition, and where switching is complex and costly. Banking, insurance and utilities are profitable services, if not an excuse to print money, because you don't need to spend a lot on R&D once you're there. Consumer software services aren't like that at all. Switching to another phone or service provider is a call away, and trivial to do. All the software giveaways, could end in tears, but Nokia's exposure here is the greatest.

But more troublingly - and I can't believe analysts don't pick up on this - is the fact that most services essentially evolve in a bottom-up fashion. Nokia is hand-picking the ones it thinks we would like to use, and hoping their design fits the market. Apple cleverly avoided this dilemma. I'll bet most iPhone users didn't know Apple wanted to sell you a cloud offering (and these days quite a good one) in the shape of MobileMe. It's a very low key sell. So Nokia could spend its entire value on market research and still make Soviet-style production errors.

Nokia has approached geolocation courteously and cleverly, by encouraging application developers to create apps using the platform, rather than hyping it to the heavens. But equally, this tends to deter serious investors. The presumption is that anything with potential value will be hacked together by amateurs and given away.

Finally, I think the entire industry misinterprets the demand relationship between devices and services. If you have a great device, like using it, and need not worry about the cost of the data, then you'll go and find things to do with it. If it isn't a great user experience, then you won't.

Savander used a curious phrase in his presentation. Twice he told us there was, "no smoke coming from the Engine Room." I think this was intended to be an assurance that Nokia's engineers were creating ever-improving services without having to break sweat. But given the state of its smartphone portfolio a bit of smoke would assure nervous investors. Nokia's future looks much rosier once it has a stronger device line-up - and that was the main thing we didn't hear about this week.

Nokia only appointed a new phone chief in November, so we'll find out soon enough how it's shaping up. The company's place in the business is quite clear: just make great phones. ®

Security for virtualized datacentres

More from The Register

next story
TEEN RAMPAGE: Kids in iPhone 6 'Will it bend' YouTube 'prank'
iPhones bent in Norwich? As if the place wasn't weird enough
Consumers agree to give up first-born child for free Wi-Fi – survey
This Herod network's ace – but crap reception in bullrushes
Crouching tiger, FAST ASLEEP dragon: Smugglers can't shift iPhone 6s
China's grey market reports 'sluggish' sales of Apple mobe
Sea-Me-We 5 construction starts
New sub cable to go live 2016
New EU digi-commish struggles with concepts of net neutrality
Oettinger all about the infrastructure – but not big on substance
PEAK IPV4? Global IPv6 traffic is growing, DDoS dying, says Akamai
First time the cache network has seen drop in use of 32-bit-wide IP addresses
EE coughs to BROKEN data usage metrics BLUNDER that short-changes customers
Carrier apologises for 'inflated' measurements cockup
Comcast: Help, help, FCC. Netflix and pals are EXTORTIONISTS
The others guys are being mean so therefore ... monopoly all good, yeah?
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.