Nokia to open its content and application store this spring

Ovi Store will have up to 20,000 applications on offer to Nokia users

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Mobile phone giant Nokia announced yesterday the opening of its content and application business, the Ovi Store, later this spring. Besides Nokia applications, the Ovi Store linked to Nokia’s Ovi service platform will offer customers applications by other manufacturers as well.
      Speaking at the GSMA Mobile World Congress in Barcelona, Nokia Executive Vice President of Services and Software Niklas Savander estimated that the store will have no less than 20,000 applications on offer when it is opened in May.
      The Nokia Ovi Store’s rival Apple’s App Store has currently around 7,000 applications available.
      “The single most important point with the store is that the consumers find the applications”, Savander says.
      At the moment applications manufactured by outsiders can be found on Nokia handsets through the download menu. Nokia’s starting point still is that all of the applications are certified in order to ensure that they are safe to use.
      “As the publisher of the applications Nokia has the judicial responsibility to make sure that with the products the customers will not get for example software viruses.”
     
Mainly the Ovi Store serves Nokia’s smart phones. At the moment there are 50 million handsets in the world that are compatible with the store. According to Nokia’s estimate, by the year 2010 around 300 million Nokia phones will be able to utilise the store's services.
      Following Apple’s model, Nokia will also be including free services from its store. From the net sales of the chargeable services after deducting the invoicing expenses, Nokia promises to return 70 per cent to the manufacturers of the applications.
      “When we talk about 300 million handsets, one product’s price does not have to be high to still amount to decent business revenue.”
      Through credit card payments, where the invoicing costs are fairly low, the application manufacturers reap the highest returns. Teleoperators, in turn, often levy relatively high compensations, Savander explains.
     
In the mobile phone world Nokia has been sneered at because of the sluggish start to its Ovi services. In the autumn of 2007 the launch of the service had to be postponed because of software problems.
      “I do not agree with the claims of a failure to launch. It has simply been a case of prioritisation”, Savander says.
      In the application business Nokia has certainly used Apple as a model. The American company was the first to realise the commercial benefits of using applications by a third party. Both Apple and the application manufacturers benefit from the arrangement.
      Apple targets its services to the users of its technically advanced iPhone, whereas Nokia aims to attract a customer group that is tens of times larger.
     
Savander admits that Apple’s model is good. Still, Nokia aims to do things slightly differently. “The Ovi Store will offer people targeted content based on their social connections and physical location.”
      In a way the consumer is able to “spy” on what contents are enjoyed by their social network.
      Investment bank Nomura’s technology expert Richard Windsor was not surprised by the similarities between the Apple and Nokia application stores.
      “The application side has not been one of Nokia’s strengths in recent years. If they can produce the iPhone user experience for half the cost they have a hit on their hands”, Windsor estimates.
      Savander, in turn, predicts that the economic crisis may even increase the demand for Nokia’s services, as it will not necessarily be profitable for the teleoperators to invest in services that Nokia can provide.


Previously in HS International Edition:
  Nokia cutting back further in Finland (12.2.2009)
  Nokia stock buoyant on announcement of new music & games portal and N81 handset (30.8.2007)

Links:
  GSMA Mobile World Congress 2009
  Nokia Press Release

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