Nokia's Game Plan

Top of Mind

Nokia's Game Plan

By Paula Bernier, Executive Editor, IP Communications Magazines  |  April 01, 2011

This article originally appeared in the April 2011 issue of INTERNET TELEPHONY.

I had the pleasure of traveling to Barcelona in February for the Mobile World Congress show. And I couldn’t help but notice that Nokia (News - Alert) was mentioned again and again at the event.

As you probably already understand, it was not always discussed in a positive light. The company, once a leader in terms of cell phone innovation, has now taken a backseat to Apple (News - Alert) and even other consumer electronics companies, which are quickly churning out exciting new products.

However, Nokia seems to be trying to change all that, as the company’s new President and CEO Stephen Elop signaled during his multiple appearances at the world’s largest wireless confab.

The most high profile move Nokia has made this year is to partner with Microsoft. At Mobile World Congress, Microsoft CEO Steve Ballmer (News - Alert) used his keynote speech to discuss the deal, and he introduced Stephen Elop to talk about it as well.

The relationship involves the two companies working together to create mobile products and services and, somewhat surprisingly, will have Nokia adopting Windows Phone as its principal smartphone strategy.

But the partnership goes further still. Nokia will help Microsoft expand the Windows Phone to more geographies, market segments and price points as part of the relationship. Its operator billing agreements are supposed to make it easier for consumers to buy Nokia Windows Phone services in countries where credit cards are not commonly used. Nokia Maps, its search services and devices will be integrated with Bing and Microsoft adCenter. And Microsoft development tools will be leveraged to create applications for Nokia Windows Phones.

Also of notes is that the companies will combine their app stores. Ballmer said 30,000 developers already have registered on the Mobile mobile app store.

“The world is turning from a battle of devices to a war of ecosystems,” Elop quite rightly said during his comments at the show.

And these two companies – both of which bring to the table global reach and distribution, big names and many other assets – are joining forces in this important new battle.

At a joint news conference announcing the partnership in London, Ballmer said: “Ecosystems thrive when fueled by speed, innovation and scale. The partnership announced today provides incredible scale, vast expertise in hardware and software innovation and a proven ability to execute.”

Elop at the same event commented: “Today, developers, operators and consumers want compelling mobile products, which include not only the device, but the software, services, applications and customer support that make a great experience. Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivalled global reach and scale. It’s now a three-horse race.”

In his own keynote at Mobile World Congress, Elop spent his time talking about how Nokia aims to bring wireless to those in the world that have not yet made the connection.

He said that 80 percent of the world’s population is within cellular range, but only 20 percent are connected to the Internet.

“We can change that,” he said.

Elop went on to say that Nokia wants to “bring the next billion online” and “connect the unconnected.”

He talked about Nokia’s most affordable handsets, and he mentioned that Nokia aims to expand its Nokia Money and Nokia Lifetools, among other applications, to the low end of the market. In discussing the Nokia Money banking application, he noted that 1 billion people have a phone, but not a bank account.

And, in a roundtable discussion hosted by Alcatel-Lucent (News - Alert) in Barcelona, Mary McDowell, executive vice president of Nokia, talked about an SMS service Nokia supports that delivers prenatal tips to mothers-to-be in developing countries. Another service gives rural farmers crop information so they can more effectively gauge the value of their harvests, she added.

Given that mobile service providers and handset outfits have pretty much saturated the market at this point, it makes sense they would look far and wide in their quest for growth. It can also be a good place for a company that is under competitive pressure from new devices like the iPhone (News - Alert) and the iPad in the U.S. and other developed countries to place its bets.

However, the barriers to both beating Apple, with its venerable iPhone, iPad and massive ecosystem, and to making a good business by selling product to the most remote and poor in the world, are high. Elop has a lot of work to do.

Edited by Stefania Viscusi