Sunday, January 24, 2010

Ovi Maps Comes With Music

Nokia's elaborate services plan visualised.

Nokia's announcement of beginning to offer it's Ovi Maps voice guided turn-by-turn navigation free of charge has sent a ripple through the market, as TomTom's share price lost 15% right after the giant's announcement. Free global navigation with no fear of roaming and license costs sounds almost too good to be true. Can it be true? The ultimate insider, Eldar Murtazin thinks that it is. And with just cause.

Mr. Murtazin's Tweets about Ovi Maps ever since right after the announcement have stated, that the now "free" Ovi Maps license will be added to mid- and high-range Nokia phone prices. So Nokia will bundle the "free" license with the phone, but will raise the price of new devices that launch since March 2010.

Force-feeding or countering losses?

Before you read on, I recommend that you read Mr. Murtazin's blogstory here.

He makes a point that Nokia's "Maps" service has never really caught on with people to the extent that they would pay for a voice guided navigation license. He continues to say, that Nokia has never released any statistics or sales figures of its navigation services.

Another point mr. Murtazin makes is, that Nokia is now "force-feeding" the unsuccesful Maps license to anyone buying the phone, as the customer will have to pay a little extra for the device from here on out. To me, this seems logical and it should come as no surprise that nothing is free in this world. Free stuff is always done at the expense of something else. So then, is this a new norm in Nokia's marketing strategy? Come to think of it, Nokia's done this kind of "trick" before and not too long ago.

Comes With Music. Remember that little service? It is the 12 month license for "free grabs" in the Nokia Music store, which sounds like a great deal to be getting with your phone. However, it was widely publicised that the "CWM" feature in a phone actually raised the price of the phone with about 100 euros. Nokia sells a fraction of its models that have CWM without the music store capability. And at least here in Finland, the CWM phones are the models that stores chose to begin selling. I think the reasons for this is quite obvious.

So how well has CWM worked for Nokia? Well, not very well. Before Christmas there were news that the CWM service wasn't really catching on and as a salesperson my self, I know that the steeper price of the device with CWM made a lot of people reconsider. It's also a bit contradictory when you think about it: services like Spotify and Nokia Music Store actually hold artists from only the largest record companies, meaning that the content is heavily pop-orientated. Now who are the biggest consumers of music that you hear on mainstream radio channels? Well people in an age group that you wouldn't buy a 700 euro phone for. To me it appears that there's a slight mis-match in supply and demand.

The bigger picture

So will the "freeing" of the Ovi Maps license turn out to be a good thing for Nokia with these experiences with Comes With Music in mind? Well, at least Ovi Maps is a service that people from pretty much all age groups can use, although only grown-ups tend to travel abroad and need be concerned about getting to places. Adults also have more money to invest into mobile devices, so this probably is a working match of service and demand. All this depends naturally on just how much the price will rise for Ovi Maps licensed phones.

©Christopher Peake 2010

No comments:

Post a Comment