Monday, July 21, 2008

BPN 1165 Nokia mobiles sing, dance and lead the way

It looks like it might become a classic business case: the changing face of Nokia. The recent figures and the product announcements indicate that Nokia is changing it business model. It used to be a company offering network services and mobile telephones. But now it is changing to music, games and software. Will the company be able to survive the change? Why not: once the company produced wellies, rubber boots, and moved to mobile telephone. The new move is from complex hardware devices to software.

Nokia is already changing its business model for some years. Of course network services and mobile telephones have been sales products for years. But with the saturation of the market for mobiles, other products and sources of income have to be sought. Despite the fact that Nokia bought all the shares in the Symbian consortium o 264 million euro, Symbian will not be a real source of income. In fact Nokia will put it at arm’s length and accommodate it in a foundation, offering other companies like Google the benefits of the development.

As the company is in content related devices it has been looking around for some time into content products and services. In 200 the company looked into the tablets for games and electronic books. Due to an economic depression, this development was shelved. But since two years Nokia is working on content products with a vengeance: games, music and maps.

Gaming has been a difficult area to start up in. The NGage device was not a success. But now the general game software comes on stream.

The music service is interesting. Of course the mobile devices are becoming Christmas trees with many bells such as telephone, SMS, camera game device and now also MP3 player and navigation device. But as Nokia is rather late in the music game it will have to compete with the iPod. In fact the company is applying the iPod syndrome: a device, a library, a fair price for songs. Nokia is producing special mobiles for music. It is building up a library through all large record companies, except for EMI (for the time being) and by buying the music store Comes with Music. And the price is more than fair (for the time being): songs are for free.

The latest content addition is navigation.. Of course, here the mobile functions as navigator. But for the device maps are needed. For this purpose Nokia bought the competitor of Teleatlas/Tom-Tom the US company Navteq. Last month the European Commission gave permission for the acquisition. In the meantime the company had already 406.000 dowloads of maps.

Nokia is changed its face from industrial products to telecom hardware in the nineties. Now it is changing again from hardware to content related products and content services. For the time being the company is still dependant on the sale of mobile devices, but gradually it becomes a download company building on revenues from games, music and maps.

Blog Posting Number: 1165

Tags: mobile, game, music, map, , ,

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