Ringing the changes

Nokia's return to the services business is set to indelibly alter market dynamics in the ICT sector, to the possible discontent of some network operators. CommsMEA reports from Amsterdam, Holland.

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By  Administrator Published  January 8, 2008

Nokia's increased involvement in the internet services sector continues to shake-up the market. In front of a 3,000-strong gathering of market analysts, global press and investors, Nokia executives outlined their strategic vision for the company, including their flagship ‘comes with music' initiative.

The Finnish mobile giant will offer subscribers owning certain Nokia devices 12 months of free unlimited access to the company's music catalogue, via its online Nokia Music Store.

The trends we are seeing show us that people will have a genuine desire not only to create and share their own content, but also to remix it, mash it up and pass it on within their peer groups. - Mark Selby, vice president, multimedia, Nokia.

After twelve months the user can continue to gain access to the service, but will have to pay a subscription. However, they will be able to keep the tracks they have downloaded during the initial 12 months, regardless of whether they continue to pay for the service.

This offer will see the company lay down the gauntlet to US market giant Apple in the integrated ‘mobile music' sector, according to staff at UK-based research firm Analysys.

Mike Grant, head of broadband and media at Analysys thinks that senior management at Nokia is aiming to accelerate the move from being a pure device player into an integrated end-to-end consumer service organisation in the mould of Apple. He adds that the "comes with music" offering is a clear nod from Nokia to Apple for its success in integrating music with mobile communications.

Nokia CEO Olli-Pekka Kallasvuo told investors that he intended to meet the Apple challenge "aggressively".

The Finnish company has paired with record label Universal Music International to rollout the services, with senior Nokia executives claiming the company was in negotiations with similarly sized recording companies to ramp up the content available on its Nokia Music Store.

Kallasvuo describes the move into internet services as signalling the dawn of a new era. He notes that voice traffic generated on mobile networks has finally surpassed that generated on fixed-line phones.

"The service is free to the consumer, and Universal are being paid by Nokia for the service. Hence, either Nokia has judged that it will be able to increase profit margins on the device as a result of bundling this service in with the device," claims Analysys' Grant.

He also hints that Nokia possibly views the promotion as a "marketing cost worth paying to establish their position in the market alongside Apple".

Nokia also predicts that 25% of multimedia content consumed by subscribers will have been created, edited and shared within their peer circle rather than coming out of traditional media groups by 2012.

Nokia also published results of a global study documenting the ‘digital behaviour'.

Entitled ‘A Glimpse of the Next Episode', the study identified emerging entertainment trends, noting that collaborative multimedia footage generated primarily on mobile handsets will drive data usage to 2012.

"From our research we predict that up to a quarter of the entertainment being consumed in five years will be what we call ‘circular'. The trends we are seeing show us that people will have a genuine desire not only to create and share their own content, but also to remix it, mash it up and pass it on within their peer groups - a form of collaborative social media," said Mark Selby, vice president, multimedia, Nokia.

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