Nokia recently shook the world by starting to provide its Ovi Maps app including turn-by-turn navigation for free. And only just under 2 weeks later, it announced that users have downloaded the app more than 1.4m times. Good stuff.
The numbers led some people (Nokia’s Vanjoki as well as various industry pundits) to claim the dawn of Ovi downloads had arrived. I beg to differ, and here’s why:
1. A mapping application with turn-by-turn navigation cost, until very recently, anywhere between $30-80 a pop. And all of a sudden it is free. It is a little akin selling a Porsche Cayman for the price of a VW Polo: people will jump through any number of hoops for that. This is not proof that the download boom has finally also arrived with proud owners of Nokia phones; it merely shows that this is too good an offer to decline.
2. 1.4m downloads across the Symbian install base of c. 300m is not actually that impressive a number. To put it into context: a simple ad-funded game, Waterslide Extreme by German high-end development house Fishlabs, which is also a free download, clocked on the iPhone more than 10m downloads. As far as I am aware, the developer still sees around 40,000 downloads per day. And this is a long time after its release and for an app that fills significantly less of a need than satellite navigation. But even if one leaves aside this last bit (which is taking a very favourable view – no ceteris paribus here), Ovi Maps would need to hit roughly 100m downloads before it could say it was, pound for pound, as successful as Waterslide Extreme (NB: this is not exactly true because Nokia only supports some 20m devices to date).
3. It is not actually proof that the Ovi Store works as users can also download the app via the Nokia Website or via the “SW Update” application on the phone. At a time when the store still needs 90 seconds (measured on an N97 running on a Vodafone UK 3G network) and more to even load the opening screen, I struggle to believe that the store will see an uptake across the band.
4. It is likely being a bit of a one-off: Nokia also announced that, from March, every Nokia will come pre-loaded with the app.
Now, to clarify things: it is great news for boosting awareness of mobile phones as location-aware devices, and the pre-install on future phones will help that. It is likely that this will contribute to the fall of the dedicated satnav sector in much the same way Nokia’s landmark deal with Carl Zeiss lenses (and the resulting higher image quality of photos taken with your phone’s camera) was a doomsday scenario for the lower end of the digital camera market.
Also: Ovi Maps looks like a VERY good app: it covers more than 180 countries (car & pedestrian navigation: 74; traffic: 10), it is available in a whopping 46 (!) languages. It includes 3D landmarks for 200 cities around the world and incorporates Lonely Planet and Guide Michelin city guides. It is good, no doubt!
Finally, Nokia started early with the mantra of location-awareness. It was just that it had not executed particularly well to date. I know there is probably much more in the works than is visible to the untrained eye (or any other eye not from within the company) but the company does need to ramp up here since its hard-earned (and well-deserved) fame is/was beginning to fade quickly.
It would be fantastic if the world market leader would see uptake of applications rise sharply. I would very much like to ask them though not to fool themselves into believing that the store is not so bad after all only because of one successful application on it. There is a lot of work to do. The Ovi Maps case simply shows that one does not have to be a crazy Apple fan boy to be craving cool and useful apps. So, dear Nokia, continue to study the app store and try solve the shortfalls of the Ovi Store. It’ll be good for everyone!
Nokia struck again, it seems. This time? No, not another multi-billion dollar acquisition such as Navteq but another tiny start-up, namely the “boutique” travel social network Dopplr, which the Finnish telecoms giant allegedly gobbled up for anywhere between €10-15m. Hm. Hm Hm…
Dopplr’s Business Case
Let’s see what Dopplr does (besides its co-founder [and angel investor] being an old Nokia hand): the idea is to share trips with friends so that a) people coincidentally going to the same place at the same time (“what??? you will be in Barcelona in the second week of February, too???”) will find each other and b) they can share cool and “unique” tips from other travelers. It is (was?) one of the group of location-aware social networks that have been and are still waiting to come out of cover.
Nokia’s Master Plan
The deal is great for the Dopplr guys who seem to have made a nice return and the pieces of the jigsaw on a very, very, very high level seem to make sense: Nokia is assembling a location-based empire. They acquired Navteq in what was Finland’s largest acquisition ever, they bought German location social network Plazes, and now Dopplr. And it now all comes together at Ovi Maps (which looks quite good!). Makes all sense, huh? The rationale was – arguably – to do to sat-nav systems what they did to (small) digital cameras: kill them and incorporate it into their phones (or multimedia devices). When Nokia moved to Carl-Zeiss lenses, mobile phone camera were basically on par with low- and mid-tier digital cameras. Why carry 2 devices if 1 will do the same job. Easy! And boy did it work!
So, let’s do the same with maps. And, more importantly perhaps, do not maps (and location-awareness in general) find a completely new way of justification in mobile phones, i.e. in devices that are, well, intrinsically mobile? Yes, it does. When Steve Jobs premiered the original iPhone, he famously ordered coffee from the nearest Starbucks, using a maps application. Simple, right? Wooing the masses but nothing much in it, right?
But! On the maps side, Nokia competes against Google Maps (this is what Jobs was using), which is free (if one leaves aside the probably not insignificant investment that will have gone into this service with its various extensions such as Streetview et al). It also has an open API and many, many people use this. It is embedded on the iPhone (Jobs again) and most people I know use it on their Blackberry because it is better than RIM’s own offering. A free download to most phones, Nokias included.
The Impact of (Fairly) Open Networks
Now, I never got these highly specialized things anyway. I find them way to complex to handle: when I am going on a business trip, I am normally much too busy to feed data in some travel network or other. And when I am going on a personal vacation, I am a) even busier and b) want to be left alone (normally). Oh, and did you see that Twitter plans something like this, too?
But even aside from this, when it comes to “being found”, all my friends (real and virtual) knew through my blog, through Twitter and Facebook that I was going to France this summer. Do I really need another, specialized service for this, over and above the ones that can provide that information and also everything else? In other words: does it make sense to try and hone a super-focused service when similar (if not identical) results can – and already are being – achieved through smart filters on networks that have somewhat of a head-start when it comes to active users? I mean, Facebook has more than 300m users, MySpace – even if it seems to be struggling a little lately – will have more than 150m. And then you have Twitter, Bebo, Hi5, Orkut, StudyVZ, etc, etc, etc. – that is more than Nokia sells all year.
Now, the existing players are adding geographical awareness as an additional feature to their services. I mean, even YouTube is doing it!
But the real point is: whoever uses one of these (say, when you are in Brazil, you use Orkut), there is a certain likelihood that your friends will, too. Otherwise, you would not be on it. Need more? I doubt it.
On top of that, it is – arguably – much easier to integrate a location-based function into a network that already has hundreds of millions of users (and I am not talking of hundreds of millions phone users because they only are potential users of any service that might come with the phone) than to build one. Nokia does certainly have a great starting point (it sells more devices per year than Facebook and Twitter users combined; see – old – numbers here) but they are not with Nokia because it provides such a great network but because their phones are good.
When it comes to services, it has become an issue of today’s mash-up world where access and resulting services go across a variety of – more often than not – open offerings rather than tight proprietary ones, and Nokia seems to be struggling of getting to grips with this. Some commentators compared it with Yahoo!‘s M&A swoop in order to try and grab back the love it lost to Google and others. Even if one isn’t so harsh, it seems obvious that the thought pattern behind Nokia’s thinking might be a little outdated. I stand to be corrected (and would love to be since Nokia has brought a lot of really great stuff to the world) but that is what is worrying me. So congratulations again to the Dopplr team again but, dear Nokia, for the time being I remain skeptical as to the commercial sense of it (and, yes, I appreciate that €10-15m is but a fly speck on your balance sheet if it fails…).
More research predicting world domination for Google! Well, somehow anyway. According to a new report, Google will succeed with its expansion into mobile. Now, I thought they were there already and had been doing a bit of business there for a while: they’re the search engine of choice for quite a number of network operators already (although the jury is still out if this works: see e.g. here), and besides keep adding nifty apps to the mix (their mobile versions of Google Maps and Google Mail apps, well or at least for the Blackberry are pure bliss!). The latter are – for the time being – only an extension to their web apps without, notably, the ads; but this is only a question of time, I think: screen resolutions make AdWord a little awkward these days but higher resolution phone screens (such as for the new Blackberry Bold, which has widescreen QVGA) will likely change that. Google does offer AdSense for mobile already although there, too, no data on uptake or revenue is available (cf. press release).
Now, the aforementioned report thinks that Android-powered phones will grab 3% market share for smartphones in 2009 (corresponding to 8m devices). This is respectable. However, Apple’s iPhone is said to hold 17% of the global smartphone market and it is predicted to ship 45m iPhones in 2009. Shouldn’t Android phones be able to do more? I mean: Android is not only Google, it is also a gazillion other molochs of the mobile telecoms world (see e.g. here and here). Even if those numbers were right, they wouldn’t give Google world domination (remember Nokia? They hold some 40% of the world market…).
Local search will be key to market growth: innovations in mobile search and advertising will allow for improved local search, directly competing with ‘yellow pages’ type proximity marketing services. The challenge for Google is to encourage consumers to start performing functions on their mobile browser that they would previously have done on their PC in already established markets.
Nice thing if you can get it: for a modest $8.1 bn ($7.7 bn if you discount the cash the company has in its coffers), Nokia acquired the provider of digital maps, Navteq. Even though this marks Nokia’s largest acquisition ever, it is a hardly surprising move given the recent activities of the company to flex its muscles in the content space. Its Nokia Maps application cried out for something like that (it ran on Navteq-supplied maps anyhow). To combine GPS-equipped phones with the people who power loads of todays digital maps seems smart, in particular when one fairly apparent new competitor in Nokia’s courtyard runs a fairly successful digital mapping solution itself, namely Google: If the proprietor of Google Maps enters the handset market with the already somewhat fabled GPhone (another article here), Nokia is arming itself to withhold and defend its still impressive market share of c 1/3 of the global market for mobile handsets, errh, multimedia devices. Last year’s acquisition of Gate5 seems to not have been enough for that. No other big OEM has come out with GPS-enabled devices with force yet, so Nokia’s move would also cement its positions amongst its current peers.
So what will we see? Easy, huh? After turning mobile phones in multimedia computers and slashing away on the digital camera and music player market along the way, navigation systems (or “sat nav” as your ubiquitous salesman affectionately calls it) will apparently be the next victim: who needs them if one has a GPS-equipped Nokia N95 (which, yes, also comes with a digital camera powered by a prestigious Carl Zeiss lense and has 8GB space to accommodate your music and videos).
This is the near-sighted and easy bit and I am all for it: if I can have the quality of specialist devices merged into one, then that is my device of choice even though the challenge is that you then have to beat every leader in the segment. But the history of camera and music phones shows that there is a niche that is rather a gaping cleft, in particular when also cleverly branded, and one that is apparently growing. So why not for sat nav, too?
The magic word however is context-awareness. It can probably be called the holy grail of service and product discovery and the provision of relevant offers: if I am being offered something in a context that makes the offer relevant, I am much more likely to be lured into using/buying it. This is exactly how Google’s famed AdSense works (and advertising is an area Nokia recently focussed on, too, i.e. with the acquisition of Enpocket).
The principle of context increasing relevance naturally applies to everything: if I am hungry, I am more likely to visit a restaurant. If I am at an airport, I am more likely to be interested in flight times, or travel offers, etc, etc. So combining a device that adds an important context parameter, namely location with a platform like Nokia’s Ovi that adds an array of different services (games, music, maps, etc) looks like a model that should increase the likelihood of a purchase – because it can offer the user a more relevant offering in the context in which he uses the device. Nokia seems to be finding it easier to get its content-loaded multimedia devices past the carriers’ doors, too, that is if Graeme Ferguson, ex-Vodafone Content Meister, is to be believed…
However, I will continue to call it a mobile phone…
