New Strategy

Vodafone's plans to revamp Internet services critical to future success

Paul Rasmussen — Wed, 23 Sep 2009 10:33:36 -0400

Faced with being labelled as little more than a dumb pipe, Vodafone is expected to announce a significant overhaul of its mobile Internet service. The move will see the Live! brand replaced with Vodafone 360, with a focus on social networking and mobile payment services.

The company, which has been increasingly viewed as having fallen behind rivals such as Apple and Google in mobile services, hired Pieter Knook from Microsoft last year to head its mobile internet group and devise a new strategy for Vodafone.

The plan will see the company improve access to social networking sites, providing subscribers with the chance to integrate several social networking sites on their mobiles, so they can see what their friends are doing without having to switch between different applications.

Included within this new strategy will be a move into using the billing relationship that Vodafone has with its customers to help them purchase apps and other content without the need for a credit card and the associated risk of online fraud. The company CEO, Vittorio Colao, gave his blessing to this approach, commenting that "I truly believe mobile accounts are a fantastic payment platform for all digital goods."

The challenge Vodafone has set itself has to be seen in the light of its lack of success with past attempts to turn consumer-focused mobile Internet services into a large revenue generator. Terence Sinclair, an analyst at Citi, estimates that 10 per cent of the company's £3.1 billion of data revenue in 2008-09 came from services such as music downloads, and a further 10-15 per cent came from e-mail. Sinclair added that about 75 per cent of Vodafone's data revenue consisted of monthly charges for providing basic access to the wireless Internet.

For more on this story:
Financial Times

Nokia's new strategy fails to impress

Paul Rasmussen — Fri, 24 Apr 2009 12:34:05 -0400

The CEO of Nokia has attempted to calm shareholders' worries by claiming the company is fundamentally changing its business model to transform both the company and the industry. While Olli-Pekka Kallasvuo made grand assertions the company would be successful by offering consumers "irresistible solutions that improve their lives," the debt ratings agency Moody's remained unimpressed and revised its long term outlook. The agency even said Nokia might not be able to keep its A1 credit rating.

Speaking at Nokia's annual investor meeting, Kallasvuo stated the company would continue to compete with existing cell phone vendors and new entrants from the PC and internet industries. "The focus would now be on integrated services in five key areas--maps, music, messaging, media and games." He claimed combining these services with high quality devices will increase customer retention and add value, whether through the operator channel or less traditional routes to market. "Our estimated consumer retention rate of around 55 per cent is almost twice the rate of our global competitors," he said, saying retention had increased every quarter since the start of 2007.

Interestingly, Kallasvuo pointed to the recently launched 5800 Xpress Music touchscreen musicphone and its integrated Comes With Music (CWM) service as the first great example of the integrated device/web service model that he, along with Apple, probably spotted first in the mobile world.

While the 5800 is reported to have sold over three million units since being launched in November 2008, rumours are beginning to surface that consumers are less than enthusiastic about the CWM aspect. The BBC has stated that CWM has only attracted 23,000 subscribers in the UK and many analysts believe the value proposition has been poorly communicated so far, despite heavy media promotion.

However, mention was made of the recently acquired Symbian OS with Kallasvuo saying it would be used to expand smartphone features into the mid-range, and into new product categories. "We believe that mobile computing should not be limited only to expensive, high-end devices. Expanding Symbian into lower price points is the right thing to do. We see this as a tremendous opportunity to increase efficiency, to get more scale for Symbian, and gain market share."

For more on this story:
Cellular News and ReThink Wireless

Motorola unveils radical European comeback strategy

Paul Rasmussen — Thu, 13 Nov 2008 13:04:02 -0500

For a company experiencing long-term upheaval, a dramatic reshaping of its European strategy was perhaps to be expected. Seemingly unworried by the consequences, Motorola has made the radical decision to focus its cellphone activities on a small number of countries in Western Europe together with concentrating its efforts by only working with two key partners: Carphone Warehouse and O2.

The apparent logic behind this new marketing focus is Motorola's strong relationship with Telefónica (O2's parent company), together with the retailing expertise of Carphone Warehouse across Europe--especially after this company sold around 400,000 pink Motorola RAZR devices in the run-up to Christmas 2005.

This move, which would involve a significant reduction in its European sales force, will also see no major handset announcements until this time next year.

The company made no comments on how it would manage the relationship with its other operators and retail partners, who would be expected to either be bemused or grossly affronted by Motorola's new approach to the European market.

This new strategy, which will not come into effect until the second half of 2009, is thought to be part of a wider plan to build up the handset division for a €1.4 billion sale or flotation of the group.

For more on this story go to:
Mobile Today

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