In a bid to strengthen its presence in the Internet services space, mobile handset maker Nokia India Pvt. Ltd is set to launch services such as gaming, music downloads and navigation in the Indian market early next year. The company launched these services in the UK under the brand name ‘Ovi’ in October this year.
“We have always been known as a mobile phone company but this year, we are entering the internet services space. We will launch new initiatives such as music service under a platform called Nokia Music Store, gaming service called N-Gage and a navigation services called Nokia Maps,” said Vineet Taneja, multimedia business director, Nokia. “Ovi is still in the launch phase with only some applications activated in the UK. India is one of the key countries where we are launching Ovi,” he added, saying the new services will be available from the first quarter of 2008.
The services will be compatible with Nokia’s high-end multimedia handset range, Nseries, which has the necessary technology built into the device. The 15 models in this series are all internet enabled with music and gaming capability. The latest, N81 and N95, even have navigational capabilities.
“The Nseries handsets have been optimized to access the services under Ovi once they become available,” said Taneja. While these services will be offered free initially, the company will eventually charge a fee as they start generating consumer demand. “Nokia is a leading player and can afford to explore new avenues,” said Arvind Subramanian, partner, Boston Consulting Group. Nokia’s market share by unit sales currently stands at 38.1%, according to a report byStamford, Connecticut-based researcher Gartner Inc, while rivals Samsung and Morotorola lag behind with 14.5% and 13.1%, respectively. “Nokia has advantage in India of promoting any type of services and applications since it’s a leader in the country,” says an analyst at market research firm Gartner.
Analysts also point out that in emerging markets such as India and China, the mobile phone is becoming central to all communication, and Nokia’s footprint is egging the company to explore the mobile Internet space further. “Unlike developed markets, in countries like India the household PC penetration is as low as 5% while the household penetration of mobile phones is growing at 30-40%, making mobile phones the centre for all business and communication,” said Subramanian. “Nokia, already a market leader in these countries is getting a head start on the way business will be done in such markets,” he added.
As a result of the imminent shift into the online services space, Nokia has also adjusted its marketing strategies. One of the country’s most aggressive advertisers on television and print, with spends crossing over Rs121 crore in 2006, according to a leading media buying agency, Nokia this year has been placing its bets on the Internet to do the talking for Nseries. “For the Nseries, the Internet is more important to us than television,” said Tanjea. “Our spends on the Internet have gone up from 2% of our marketing budget last year to over 10% in 2007,” he added.
One of the most recent marketing initiatives of the company, Nokia Nseries digital playzone, an on-ground reality show, was marketed solely through the Internet. “We did not attempt television or print because the users we are targeting are the ones online,” said Taneja.
“Nokia has always had a very strong presence in television and print but this year the company has invested significantly in new age media, especially the Internet,” said Alok Agarwal, executive vice president, Bates Enterprise Pvt Ltd, the advertising agency behind the brand. “The customer profile for Nokia is new for the Nseries and so are the advertising and marketing activities around it. While they will continue to advertise on print and television as they have, Nokia has included many more initiatives this year with more than 14 campaigns out already,” said Agarwal of Bates.
In developing Ovi, Nokia has acquired seven companies in the Internet services and multimedia space in deals that have exceeded an investment of $200 million, said the company.
Although rivals have developed technology to enable Internet services, the move into this space is still distant for them. “Rival players such as Samsung Motorola and LG are still in catch up mode. Their focus still lies in defining their market,” said Subramanian.
Breaking it up, the analyst from Gartner points out that Samsung and LG are evaluating their Internet strategies but still have a way to go before getting into Internet services while Motorola’s focus is on building its market share. “While the opportunities in the internet services space are big in India, currently Samsung’s focus is on developing our product portfolio,” said a spokesperson for Samsung Telecommunications India Pvt Ltd.