IHS Global Insight Perspective | |
Significance | As Apple rides high on the huge success of its own App Store, global players such as Nokia, Vodafone, and Microsoft are now looking to get a piece of the action. |
Implications | The Finnish vendor's key advantage lies in its size: Nokia sells 20 times more handsets than Apple year, giving Nokia a significantly larger potential customer base. |
Outlook | Although the iPhone is effectively a high-end smartphone which has shown little traction outside Europe and the United States, Nokia offers handsets at every level and in most global markets—meaning it has access to markets with huge potential in the developing world, such as mobile banking and payments. |
Nokia has announced the global opening of its Ovi Store, which it says will offer mobile applications (apps), software and content to some 50 million users from today. The world number-one handset vendor launched the store yesterday in Australia and Singapore, before rolling it out across the rest of the globe this morning.
The Ovi store is accessed via a downloaded application, and users will have to create a profile to use the service, much like Apple's highly successful App Store. Nokia said post-paid users in Australia, Germany, Ireland, Italy, Russia, Singapore, Spain, and the United Kingdom will be able to purchase immediately, and pay for apps via their network operator bill.
Tero Ojanperä, executive vice president of Nokia Services, stated: "Ovi Store is open for business and we've stocked the shelves with both local and global content for a broad range of Nokia devices."
Outlook and Implications
- The Handset Giant Diversifies: As the global handset sales market contracts, Nokia has moved to increase its apps and value-added services stables to bolster its revenues (see World: 1 April 2009: Nokia Says "Thousands" of Developers Have Signed Up for Ovi Store). The Finnish handset maker has previously relied on games, music, and mapping apps to spearhead its services push, but the mobile gaming market has proven something of a disappointment, while Nokia's "Comes with Music" app has shown disappointing take-up (see United Kingdom: 24 April 2009: Nokia's "Comes With Music" Makes Disappointing Start). Although Nokia will continue to sell games and music through the Ovi Store, it has now significantly diversified its offering. As Apple rides high on the huge success of its own App Store, global players such as Nokia, Vodafone (see World: 13 May 2009: Vodafone Streamlines Application Development with Global Initiative) and Microsoft are now looking to get a piece of the action.
- Taking on the Big Apple: Nokia is aiming to follow the success of iPhone manufacturer Apple's App Store, which has proved extremely popular, claiming one billion apps downloaded since it was launched less than a year ago, adding to the astronomical success of the iPhone (see World: 24 April 2009: Nearly 4 mil. iPhones Sold for Apple During Q1). However, rather than copying the closed development model of Apple's App Store, Nokia has opened its gates to third-party developers, and is looking to add a variety of third-party partners, such as social-networking sites. However, the Finnish vendor's key advantage lies in its size: Nokia sells more than 400 million phones a year, compared with Apple's 20 million iPhones, giving Nokia a significantly larger potential customer base. Also, while the iPhone is effectively a high-end smartphone that has shown little traction outside Europe and the United States, Nokia offers handsets at every level and in most global markets—meaning it has access to markets with huge potential in the developing world, such as mobile banking and payments.
- Operator Billing Will Come to the United States: Although not immediately available, Nokia has been able to announce it will be able to offer operator billing in the key U.S. market later in the summer via AT&T. Reports from the Nokia Developer Conference had suggested that operator billing would only be available in Australia, the United Kingdom, Germany, Ireland, Italy, Russia, Singapore, and Spain (see United States: 29 April 2009: Ovi to Lack Operator Billing in U.S.).Not only is Nokia targeting the lucrative U.S. apps market for key growth, it will also be hoping to steal a psychological march on Apple on its home turf.