Will Nokia be Connecting People with Facebook?

A nice piece of rumour was brought out by the fine folks at MoCoNews: allegedly Nokia is in talks with Facebook to cooperate on mobile. And if this was not enough, there is also talk about the mighty Finns taking an investment in Facebook, and this would arguably be somewhat more significant (in cash terms at least) than the $10m stake the Samwer brothers of Jamba-fame acquired last week.

MoCoNews speculates that this could involve something as prominent as the YouTube button on the iPhone. This of course would appear to be a challenge given that most carriers will determine themselves what is and what is not on the handsets that are being sold through their retail outlets. But then Nokia has recently made strides on that front recently (as will be shown below).
A move with Facebook would fit in seamlessly with Nokia's evolving strategy towards providing entertainment services rather than only being a hardware vendor (albeit the world's largest by far with a whopping 38% market share globally): 2007 marked a year were Nokia acquired a number of companies and announced a number of initiatives and products that push the company way further down the service provision end than ever before: it acquired digital map specialist Navteq (Finland's largest acquisition ever), bought the mobile marketing and advertising folks from Enpocket, it struck a content deal with Telefonica and another one with Vodafone, all gearing towards its comprehensive content offering Ovi (see here).

Anssi Vanjoki, Nokia's multimedia guru, went on record in saying that the Internet will be the tool that will tear down the carriers' walled gardens. He continues to preach his ongoing theme (I heard about this the first time 2 years or so ago) that carriers are no entertainment companies and should therefore not fiddle with content. That might well be true, I guess. Now, if it comes to the Internet opening those walls, well, Facebook ranks #7 on the Alexa traffic charts. And, distinct to the (few) higher-ranked sites, Facebook's clean set-up and approach would seemingly make a conversion to (higher-end) mobile handsets easier than with, say, MySpace (#6).

Finally, Nokia tried to coin the phrase of "circular entertainment" (I blogged about it here where I mocked their "survey" approach) where they hold that, by 2012, 25% of all media would be created and consumed from within a circle of peers rather than from traditional media. If or if not the numbers were correct, the concept is very convincing (read e.g. Jaiku-founder Jyri Engstrom's rather insightful thoughts on object-centered sociality). Enter Facebook... 'Nuff said, I guess...

Focus on Nokia

This is less of a commentary of the way you would normally find here but more a reference to a rather good Forbes article on Nokia. It is a glowing review for one but it also recapitulates Nokia's changing fortunes in particular in two areas, namely its various attempts to converting itself into a media company (or a hardware company with a powerful media side to it) and its dealings in the US market (where Nokia has fallen to an astonishingly low market share of only 10% by failing to realise that US Americans love clamshells; its global market share is 39.2%).

On the media front, Nokia has been rather busy recently, both on the buy side (Enpocket, Navteq) as well as with another internally conceived programme (Ovi) and some new investments through the fresh Nokia Growth Partners fund, such as Vollee (streaming rich PC games to mobile phones) and Kyte (in short a multi-platform YouTube). And, as Forbes reports, it now also seems to make strides in the US market: it has entered a deal to supply phones to AT&T (starting with the 6555 tailormade for the US market), and also seems to work with Verizon on improving its footprint there.

Nokia will apparently ship 430m units this year alone. In doing so it grabs 80% of the industry's profits on 39.2% of the market share. Going from strength to strength, it seems.

Nokia maps it out, buys Navteq

Nice thing if you can get it: for a modest $8.1 bn ($7.7 bn if you discount the cash the company has in its coffers), Nokia acquired the provider of digital maps, Navteq. Even though this marks Nokia's largest acquisition ever, it is a hardly surprising move given the recent activities of the company to flex its muscles in the content space. Its Nokia Maps application cried out for something like that (it ran on Navteq-supplied maps anyhow). To combine GPS-equipped phones with the people who power loads of todays digital maps seems smart, in particular when one fairly apparent new competitor in Nokia's courtyard runs a fairly successful digital mapping solution itself, namely Google: If the proprietor of Google Maps enters the handset market with the already somewhat fabled GPhone (another article here), Nokia is arming itself to withhold and defend its still impressive market share of c 1/3 of the global market for mobile handsets, errh, multimedia devices. Last year's acquisition of Gate5 seems to not have been enough for that. No other big OEM has come out with GPS-enabled devices with force yet, so Nokia's move would also cement its positions amongst its current peers.

So what will we see? Easy, huh? After turning mobile phones in multimedia computers and slashing away on the digital camera and music player market along the way, navigation systems (or "sat nav" as your ubiquitous salesman affectionately calls it) will apparently be the next victim: who needs them if one has a GPS-equipped Nokia N95 (which, yes, also comes with a digital camera powered by a prestigious Carl Zeiss lense and has 8GB space to accommodate your music and videos).

This is the near-sighted and easy bit and I am all for it: if I can have the quality of specialist devices merged into one, then that is my device of choice even though the challenge is that you then have to beat every leader in the segment. But the history of camera and music phones shows that there is a niche that is rather a gaping cleft, in particular when also cleverly branded, and one that is apparently growing. So why not for sat nav, too?

The magic word however is context-awareness. It can probably be called the holy grail of service and product discovery and the provision of relevant offers: if I am being offered something in a context that makes the offer relevant, I am much more likely to be lured into using/buying it. This is exactly how Google's famed AdSense works (and advertising is an area Nokia recently focussed on, too, i.e. with the acquisition of Enpocket).

The principle of context increasing relevance naturally applies to everything: if I am hungry, I am more likely to visit a restaurant. If I am at an airport, I am more likely to be interested in flight times, or travel offers, etc, etc. So combining a device that adds an important context parameter, namely location with a platform like Nokia's Ovi that adds an array of different services (games, music, maps, etc) looks like a model that should increase the likelihood of a purchase - because it can offer the user a more relevant offering in the context in which he uses the device. Nokia seems to be finding it easier to get its content-loaded multimedia devices past the carriers' doors, too, that is if Graeme Ferguson, ex-Vodafone Content Meister, is to be believed...

However, I will continue to call it a mobile phone...

Nokia pockets Enpocket

Nokia has agreed to buy ad-platform provider Enpocket for an undisclosed sum. The deal is expected to close later this year. This, coupled with Nokia's recent announcements concerning Ovi, shows the Finnish giant's push into other parts of the mobile content value chain.

Nokia's CTO Tero Ojanperä highlighted just that: “Nokia has already announced its intention to be a leading company in consumer Internet services and we believe that mobile advertising will be an important element in monetizing those services for our customers and partners. [...] This acquisition is a [...] move to bring the reach and depth of Nokia to organize the market across the world, and make it easier for an ecosystem to develop.”

Nothing much to add, I guess. It'll be interesting if they will manage to leverage Nokia's might to extend the reach of Enpocket or if the latter will simply be absorbed by the sheer size of the former...