Nokia tempts dealers with commission on Ovi Store sales - as Fitch cuts credit rating

In a desperate attempt to boost the uptake of its Ovi service Nokia is offering cell phone dealers a commission for every Ovi Store application or service sold. This initiative, believed to be the first time mobile apps have been sold in this way, is being trialled in the UK with 15 dealers who will receive provisional commission of €2.5 per service.

The dealers involved with the trial have agreed to provide feedback to Nokia throughout the test period and, for its part, Nokia said it would look to deduct the cost of services from a subscriber's bill, pending network support. The company is also reported to be in discussions with mobile operators to introduce a 50/50 revenue share model, as the desire from operators to subsidise phones dwindles.

Evidence that Nokia's Ovi platform continues to lack appeal comes from the games developer EA which has established a new development studio called 8lb Gorilla that will create games solely for Apple's iPhone and iPod Touch.

Adding to Nokia's woes, the financial ratings agency, Fitch, has cut the company's credit rating from A+ to A. Fitch said that the factors affecting Nokia's business risk included a materially weakened cash flow performance in the first half, a deeper-than-previously expected industry downturn, a modest weakening in Nokia's handset market share in the first half and reduced expectations for 2009 market share. "We also expect a weaker-than-expected operating performance at Nokia Siemens Networks with revised guidance now pointing to market share loss for 2009 at the infrastructure joint venture."

For more on this story:
Mobile Today
and Market Watch

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