Nokia's uneasy marriage

An uneasy marriage--operators and Nokia

While Nokia has gained the long-term respect of the consumer, it has struggled in its relationship with mobile operators for many years. The company's sales tactics might have been given a thorough polishing by the new Nokia management, but operator memories are long and resentment still lurks within some of the more grey-haired industry veterans.

But the news that Orange had agreed to follow Vodafone, T-Mobile and Telefonica in adopting Nokia's Ovi platform could be viewed as a reconciliation between these giant players in the European mobile industry.

However, the devil is in the details of these agreements, and with the Orange deal it looks like Nokia has bowed to operator pressure. For example, Nokia Maps will be branded 'Orange Maps powered by Nokia', while Nokia Music Store will be present only as a link. The primary music offering will instead be Orange Music, which will be offered as a fully functioning application comprising browsable storefront and operator billing.

According to Thomas Husson of Jupiter Research, despite the PR message of 'close cooperation', it looks more like 'co-opetition' with most operators still perceiving Nokia as a potential threat. "In the eyes of the vast majority of consumers, this new Ovi brand remains to be created from scratch and it is unclear yet how it will be perceived. Nokia is only at a stage where it is building its online content value proposition step by step--opening one music store after another, while still facing DRM issues on its N-Gage platform."

Regardless of how Nokia positions Ovi it is another shift, albeit subtle, away from operator portals to third-party providers. Whether Nokia can expand into the services market remains in question given the wide range of music and video downloads available elsewhere on the Internet, and that in the future a whole range of attractive, niche services would be created by third-party providers. -Paul