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Nokia's extreme makeover forges on. On Monday, the company announced its biggest acquisition to date, purchasing navigation software developer Navteq for $8.1 billion and continuing (but almost certainly not completing) its transformation from handset giant to mobile multimedia force. Nokia has dominated headlines for months now, in rapid succession debuting a mobile music download service, re-introducing its N-Gage mobile gaming platform, launching its Mosh mobile social network and purchasing mobile advertising provider Enpocket. Most notably, Nokia rolled out Ovi, a new Internet services brand that promises to tie it all together. Virtually overnight, it is a new and different company, with more scope and reach than ever before.
The question facing Nokia as it evolves is whether its new services will support its core hardware business or whether its hardware will instead exist to serve its multimedia aspirations. In light of rumors that Google will market its forthcoming gPhone device for under $100, subsidizing budget-priced monthly subscriber fees via mobile advertising revenues, the economics of the handset market are facing a radical shakeup. The pieces of the puzzle are clearly in place for Nokia to pursue a similar direction and slash handset prices in the name of advertising and service revenues. A wholesale metamorphosis of Nokia's business identity seems like a long shot, of course, but unlike traditional rivals including Motorola, Samsung and Sony Ericsson, the company is uniquely positioned to face the challenges of a mobile marketplace where non-traditional players like Google and Apple now threaten to call all the shots.
A new advertising campaign touting Nokia's N-series range proclaims the devices "Open to anything," an obvious jab at Apple's locked-down iPhone. If Nokia is as open-minded as the ad suggests, things are about to get very interesting. -Jason