Nokia Ovi Store Launches, Badly

| May 27, 2009 | Wireless Services - Europe | Competitive Update

| Analyst: Emma Mohr-McClune

Current Perspective: Negative
Vendor Importance: High
Market Impact: Moderate

Event Summary

May 27, 2009 -– Nokia launched Ovi Store across multiple markets, to an estimated 50 million Nokia devices in the field, representing around 50 different Nokia handset models. Users can access by either selecting the Ovi Store icon within the Nokia Download! Folder (selected countries), or pointing the Nokia device browser to store.ovi.com. The mobile client is available in English, German, Italian, Russian and Spanish and supports operator billing in Australia, Germany, Ireland, Italy, Russia, Singapore, Spain and the UK. Credit card purchase is available globally through both the Ovi Store mobile client and the mobile website.

Analytical Summary

• Current Perspective: Negative on the launch of Ovi Store. Nokia has over-promised and under-delivered, and the public has noticed. Despite earlier promises of high-tech and differentiating social-location ‘so-lo’ capability, Nokia Ovi Store stumbled at the provisioning basics, flirting with a PR disaster it can ill afford.

• Vendor Importance: High to Nokia, as the Ovi Store is of paramount importance to the company’s transformation from a mere handset manufacturer to a software and services provider. After the failure of N-Gage, and a disappointing start for Nokia Comes With Music, Nokia really needed a high-impact, rah-rah launch for its signature Ovi Store – it failed to secure this.

• Market Impact: Moderate on the mobile services market, as the Ovi Store is just one of half a dozen app stores launching, or threatening to launch, round about now. This launch has failed to create a meaningful threat to Apple; for competing app stores, there’s still everything to play for.

Recommended Competitor Actions

• Mobile operators should make the most of this opportunity. It’s never been a better time to remind end-users of the availability of OTA applications for key social networking sites, notably Facebook and MySpace. Operators busy building out their own enhanced storefronts shouldn’t neglect promoting existing products and services.

• This launch offers multiple lessons for others planning a near-term launch of a major app store product. Nokia should have launched the Ovi Store in a handful of selected markets to get a sense of traffic load and fix processes. An international launch on this scale was, in retrospect, over-ambitious.

• This launch reminds would-be app store providers to stock the basics. Nokia promised over 20,000 ‘items’ at launch. At the time, such choice sounded marvelous, but what reviewers homed in on was the key omissions, notably for MySpace and Facebook, the lack of apps for business users, and the over-representation of bookmarks directing users to websites as opposed to real downloadable apps or widgets.

• For Apple, it’s a great time to talk up upcoming feature and capability improvements for the flagship iPhone App Store. Unlike Nokia, Apple has proven itself in this market, and is able to talk comfortably about high-tech storefront capabilities. It’s a great time to make a play for disappointed Nokia users.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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