How Far Will Nokia's Transformation Go?

• Posted: Friday, January 04, 2008
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• Author: pradhana
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• Filed under: Apple, Google, Mobile Content, Mobile Services, Motorola, Nokia, Online Services, White Space, Yahoo

The shifting focus on software rather than pure hardware is a big step for the wireless industry. But according to iSuppli analyst Tina Teng, the move is nothing new for Nokia.

“Nokia’s been doing this for a long time, and this is just the next step in moving beyond the devices themselves,” says Teng, who adds that the company’s music service in particular could be a game changer and a threat to carrier-operated stores, much like Apple’s iTunes. “Just look at what Apple did with their Wi-Fi enabled iPhones - you don’t have to go through the cellular networks to download music anymore.”

Speaking of Apple - the extension to software and services also means that Nokia’s circle of competitors is also growing. Once restricted to traditional phonemakers like Motorola and Samsung, the company could soon find itself neck-and-neck with cellular operators who would rather sell their own branded services, Internet-centric companies like Google and Yahoo and mobile newcomers like, you guessed it, Apple.

But as the company continues its metamorphosis from manufacturer to service provider, it threatens to irreparably damage its relationships with network operators. Realistically speaking, how much further can Nokia go?

Already Orange UK griped in a leaked memo that the combination of the Nokia Music Store link and Orange's own branded music service on the same handset could confuse its subscribers, prompting a threatened boycott of Nokia's new N81 device. Don't expect rival operators to keep their mouths shut much longer. /FD

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