Will "new Nokia" Hurt the Mobile Operator?

However, does it risk alienating a share of its route to market in this way? To date, operators have been very protective of their own service revenues and have fought hard to protect these with the "walled garden" approach for which the industry has been known. Direct to market third-party services have not been well promoted or received with very few exceptions, one being where potential tie-ins with a strong brand has been found to be beneficial in generating customer adds. Examples of this would be Apple's iTunes, Yahoo! Mail, Windows Live Messenger or Google Maps. Now Nokia is challenging this status quo, not by providing a white label service for operators to use but by placing its own brand ahead of theirs.

Will the operators welcome such a move? Whilst the promotion of any data services is welcomed the operators will not want to reduce their slice of the pie.

Devlin added, "Does Nokia feel it has sufficient brand power that it no longer has to worry about the operators' preferences? That's an interesting question. It is being reported that Apple has been negotiating for a 10% cut of revenues from any iphone users and perhaps Nokia feels it is equal to this. It certainly has the market position to challenge but it will be interesting to see how this develops. Perhaps it will offer the operators a slice of the action in return for cross promotion because at the end of the day it still needs them to act as a service provider, even if only in a "dumb pipe" capacity but someone has to take care of billing, SIM provision, etc. The fact that Nokia has also announced phones tailored to maximise these services may appeal to operators as well; it shows strong support and should help drive uptake and level of use."

Posted to the site on 30th August 2007