Nokia repositions web services unit for lean times

Having admitted that its recent string of acquisitions might have been too ambitious, Nokia has announced a series of measures to reshape its Internet services division for harsher economic times. This will involve the greater use of third party software and cutting 450 workers in an attempt to reduce costs, and moving more products and services under the Ovi Store branding.

The company said it would unify the N-Gage and Musicstore brands under Ovi--essentially copying Apple's example for developed markets--though Ovi Services will remain the brand for emerging markets, where Nokia's biggest potential upside lies after 2010. In mature markets, the company confirmed it would focus on fewer, more proven profit generators and reduce the number of investments it makes in software houses like mapping specialist Navteq. Its initial core services will be music, location/mapping, games and business offerings.

While Nokia's services VP, Niklas Savander, claimed these changes were aimed at improving and simplifying the user experience of Nokia services, industry watchers point to the need for the company to communicate its proposition more simply and clearly to consumers. This inability has, reportedly, damaged the prospects of Nokia's Comes with Music service with users not always recognising the value of the deal.

In an effort to show it can launch successful services, the company announced over 250,000 users had already opened Ovi email accounts during the four months since the service was operational. Nokia said 10 of the top 12 Ovi-using countries were emerging markets. The company has partnered with several mobile operators to develop Ovi services, including Telefónica, TIM, T-Mobile International and Vodafone.

For more on this story:
Mobile Entertainment and ReThink Wireless

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