Nokia introducing new mobile services to cheaper handset models

print this

By Petri Sajari
     
      Nokia aims to increase the use of its various mobile services even in its cheaper models. Executive Vice President Niklas Savander of Nokia’s Services Group, says that the company is developing new cooperative models with telecommunications operators, hoping to persuade more consumers to use Nokia services.
      “The question is, if it is possible to do reasonable business with ten cents a month of turnover per subscription. In the long term we are building services which attract very large numbers of consumers. Services are not installed only in the most expensive phones, but in all of them”, Savander said.
     
For the Indian market Nokia has developed a Life Tools programme, with which it offers internet-like services for customers of the telecommunications operator Idea. New content is to be fed into Nokia’s ‘cheapest model, the 1202, through text messages. The service costs ten cents a month.
      “One euro a year from several hundred million users is a good start. All of this has significance for our brand, because we offer them their first experience in internet services. At some point, the euro a year might turn into a euro a month, in which case it will have great economic significance.”
      In India the consumer can get news, in addition to information on agricultural market prices, for instance, which can be of considerable importance for small farmers selling their products.
     
For those with low incomes, Nokia is also offering cheap music for its cheapest telephones, which do not provide access to actual Internet services.
      “In India we recently made a copyright agreement, which allows us to record a couple of pieces of music from the radio.”
     
Extending services to the cheapest phones is about more than just money. Nokia has the strongest brand of all large mobile telephone manufacturers, and its customers’ brand loyalty is calculated in one assessment as double that of its closest competitors.
      The more Nokia manages to attract first-time users to its brand, the more secure its future will be. In music, Nokia needs the help of the mobile service providers.
      “We already know that services need to be linked with a sexy device, and a telecommunications operator needs to be involved.”
      Early in the year turnover of Savander’s Services Group, which employs 3,000 people, was EUR 150 million. Nokia’s goal is that turnover should reach EUR 2 million or more in 2011, and that the services should be used by 300 million people by 2012. In the early part of the year, maps and positioning services accounted for the biggest increase in turnover for Nokia.
     
In recent years Nokia has tailored its telephones according to various services.
      In its mid-range models Nokia has several phones, which are designed for certain specific purposes, such as music listening or navigation. These telephones have appropriate software installed for the purposes, adapted to the telephone’s capacity.
      “When a consumer buys a telephone, which has one of our services installed in it, some of the money goes into the turnover of the Services unit”, Savander says.
      There is no need to pre-install services for the most progressive telephones, because those services can be used and bought through the Ovi service platform.
     
An important factor in competition among manufacturers is the combined price of the handset and the services.
      For instance, the touch-screen 5800 model costs a quarter less than the Apple iPhone, and it can hold more services than its closest competitor, the Samsung Omnia.
      “The total price has a significant impact on how much demand there is for the services. One good example is the Nokia 5800 XpressMusic, which is selling like hotcakes”, Savander says.
     
Helsingin Sanomat / First published in print 30.4.2009


Previously in HS International Edition:
  CEO Kallasvuo expects Nokia to emerge strong from economic crisis (24.4.2009)
  Nokia to open its content and application store this spring (17.2.2009)
  Wall Street Journal: Nokia and Facebook to discuss cooperation (13.2.2009)
  Nokia to customise smartphones for USA and South Korea (10.12.2008)

PETRI SAJARI / Helsingin Sanomat
petri.sajari@hs.fi