Nokia content move splits opinion

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In some quarters, principally airtime provision, the move is viewed as a direct challenge to the network proposition. At the end of last month, The Independent newspaper detailed a leaked memo from Orange to Nokia senior management that appeared to show panic within the network at the prospect of Nokia’s new music download service, Nokia Music Store, cannibalising its own digital music revenues.

Orange threatened to derange Nokia’s headline music handsets unless agreement over the download service could be reached. Orange refused to comment on the story last week. In some quarters, principally airtime provision, the move is viewed as a direct challenge to the network proposition.

At the end of last month, The Independent newspaper detailed a leaked memo from Orange to Nokia senior management that appeared to show panic within the network at the prospect of Nokia’s new music download service, Nokia Music Store, cannibalising its own digital music revenues. Orange threatened to derange Nokia’s headline music handsets unless agreement over the download service could be reached. Orange refused to comment on the story last week.

A different type of competition

However, T-Mobile Group chief executive Hamid Akhavan was more forthcoming, and sanguine, about Nokia’s intentions and likely chances of success in the content space.

He said: “Nokia doesn’t have to ask permission. It is enjoying its highest- ever market share at the moment. At the same time, if I was in its shoes, I would be nervous [at the prospect of Google launching a handset].

“It is a different type of competition for it in this market – Apple and Google are very different to the likes of Motorola or Samsung; they have a more powerful background in software. I think this is a response to the iPhone, specifically. I don’t believe it was done to encroach on the networks’ business. That’s the way I see it. There is a chance for confusion and complication among users if it is not done properly, but we don’t classify it as a threat.”

But whilst mindful of the changing face of manufacturing, with the entry into the handset arena of a new breed of software brands, Akhavan also noted history shows manufacturers have tried their hands at digital content provision before, with little success.

“No manufacturer that has bypassed an operator has been successful to date,” he said. “There is no faster way to reach a customer than via an operator, not around it. A manufacturer has no billing relationship with a customer, or customer care. It’s difficult to bypass an operator and there are many big brands that have tried. No company has been successful without partnering with an operator – just look at Club Nokia.”

Sony Ericsson also tried its own music download service when it first launched its Walkman-branded phones 18 months ago, but in the end kowtowed to networks. A manufacturer source said: “It had the same kinds of discussions with the networks Nokia is having now, but it gave in. The first Walkman phones, back in 2006, came with a standalone music service. The networks didn’t like that, and now Sony Ericsson is working with them. Its Track ID service (which identifies tracks by playing back snippets of songs) links with the networks’ music libraries.”

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