Nokia – Changing the way of business

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In the world of mobile business there is one name that everybody knows - Nokia. Nokia is a company based in Finland with more than 144 years of history. Coming from a lumber mill, nokia walked a long way till becoming the world biggest mobile company with market share more than 40 per cent. Now Nokia is considered for a standard for a well developed and trustworthy brand. In 2007 Nokia announced the Ovi an Internet service multimedia platform. Ovi, "the door" translated from Finish, enables consumers to easily access their existing social network, communities and content, as well as acting as a gateway to Nokia services. It is designed to be a web portal for accessing sites, services, and content, including music and games. The service contains five key areas: Games, Maps, Media, Messaging and Music. Nokia also made possible for third parties to develop software for the platform and their phones, which took them even deeper in to the internet service business. Because of the success of iTunes, Nokia developed Ovi. It proved to be a direct competitor to iTunes. This step clashed the two corporations for the second time in a matter of a year. In 2007 Apple introduced the iPhone. It is an internet based smartphone and with its unique features and friendly design the iPhone gave Nokia a serious rival. Ovi will open a new front battle with Apple for smartphone customers, providing an alternative to the iTunes service. Nowadays the business is changing form good dominant business to service dominant. Business has evolved to a stage where the product as a good is not enough. Companies strive to change their way of thinking and try to develop new products as a service. Nokia is one of those companies, turning their business from a headset making company to an internet service company. The service dominant logic (Richard Normann, Stephen Vargo and Robert Lusch, Christian Gronroos) is an important part of the new business order. The integration of consumers as a part of the production process (ideas, feedbacks and etc.) proves to be crucial for the success of the companies.

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This paper is going to look through the changes that Ovi will bring to Nokia as a step of changing their business strategy. Also it will give attention to the clash that Nokia and Apple are going through, in means of competing the two services - Ovi and iTunes.

When we compare iTunes and Ovi we can see that they are very similar. iTunes is lightweight free to use program with a friendly interface that enables customers to buy music, movies and applications from the iTunes store, listen to music and synchronize their iPhones or iPods with a computer. When we look at Ovi we see almost the same features. It is lightweight free to use program with a friendly interface that enables customers to buy music, movies and applications from the Ovi store, listen to music and synchronize their phones (Nokia phones). But here start the differences; first Ovi is described as a portal not as just a program, it gives access to the internet services that Nokia provides. Another difference is that iTunes provides only entertainment services, as for Ovi except entertainment they include email and messengers. Every day Nokia add to Ovi ne services making it a bigger and better portal. Nokia is going to attract their customers by giving them 12 months gratis period for using the portal and downloading music. They are able to download music from the catalogue of Universal Music International, the first company that signed a contract with Nokia. The company is following the road that iTunes laid. The advantage is that iTunes has a bigger music catalog at least for now. This can prove a turning point in the competition between them. We can say that Nokia won't give up that easily. By providing a portal service for their customers Nokia will enlarge their consumer base and by that will sell more headsets. The idea of combining all the social networks in one place will ease the user and help him get a full advantage from service. Nokia has another ace in their sleeve, Nokia maps is a service where you can find maps of different location, post pictures in real time and organize meeting with friends or business partners online. Nokia follows the trend of people that want to know where their friends are at the precise moment and Ovi gives them that. Ovi also takes the social service one step further by letting you access you own contacts, calendars, mail and files directly through the portal all you need is to access your profile and everything is there. The company brings the value creation to the consumer by letting him decide what he is going to do with the portal allowing adding of additional value to the mobile headsets.

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As Apple tries to steal from the mobile phone business Nokia is answering the same way, by going after the mobile service market. Ovi can prove to be not only an additional value to the headsets that Nokia makes, but also to an iTunes killer. But the coin has two sides in one side this sound like a great business strategy, on other hand the bold approach that Nokia makes can trip them in their tracks. In the end Ovi and iTunes services are aiming at different markets: Apple to its smaller but brand-loyal group of smartphone users, and Nokia at countless millions of its own smartphone and handset users. Success depends on how you define it. Nokia is entering a market where not only Apple is a big competitor. Google, Microsoft and many of the cellular operators provide similar services and no one expects companies like orange, sprint and AT&T to sit back and leave Nokia doing what they want. In 2007 Vodafon announced that they agree to distribute a range of Nokia devices carrying Nokia's Ovi Internet service. That was a major breakthrough in mobile entertainment. Soon after that Nokia made an offer to Apple to include iTunes in their Ovi portal. Maybe just a PR move, but effective. The media turned their attention to the rising star (Ovi). The management team of Nokia made a move similar to the move that Microsoft made 20 years ago when they were fighting for survival, releasing their operation system. And of course is you want to change the world of mobile services you need to include the best in your work (Like Steve Jobs).

The concept of Ovi is circling around the vision and the promises that Nokia claims to follow. Their vision states "Our vision is a world where everybody can be connected" and the "door" (Ovi from Finnish) does just that. As the slogan says it "connects people" providing an easy way to contact your closest friends not only by calling them, but also by communicating in facebook, tweeter and so on. Ovi makes possible to synchronies meeting and messages through your computer and phone ensuring that you will be up to date every time you open your Ovi portal.

In conclusion we can say that Nokia is taking a positive but risky path. Entering a market where they are not that well developed can be tricky but as we can see from the history of the company - entering markets that are unknown is their specialty. If they can start from lumber mill and finish as the biggest mobile phone seller, then there isn't going to be something that can stop them realizing their ideas, as I said earlier success depends on how you define it. Ovi is an idea with a great potential, users want something that can save them time and easy their work. Also the new trends show that social networks are getting more and more popular every day, which means that people like to stay in touch with friend and relatives in the simplest way possible and Ovi makes just that - it offers simplicity. As George Linardos, Nokia’s vice president of products and media, said at a conference Barcelona – Ovi Store formed part of Nokia’s strategy to turn mobile content into a mass medium, and thus to catalyze sales of new handsets. As for iTunes killer, Ovi will not be able to push iTunes aside. Apple has a big brand loyal consumer base that won't change to anything else that is not produced from Apple. Because of the years that iTunes was conquering the market, it won't be possible to just push it off.

Ovi also made a revolution by signing a contract with Vodafone. This shows that cellular operators are able to adapt and change. This gives us hope that soon we will see more open market with different services to chose from, when we are talking about mobile internet service portals. The strategic design to allow independent developer so write applications for Ovi (inspired from the natural process that Apple made with their iTunes) will prove probably the smartest for Nokias success in this task.

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When we hear the name Nokia, we hear the echoes of the brand's history. When we look back we see the ups and the downs in their path to success. Every single one of them marked with a milestone in history. Ovi is going to be the milestone that defines the beginning of the change that Nokia started. Ovi is the key that has to open every door in front of Nokia.