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Saturday, November 13, 2010

Part of Nokia's problem - making Ovi compelling

I've got a Nokia Ovi account somewhere. Signed up for it ages ago, to play around with the Ovi Store when I had an N97 to play with, back when the store was a real exercise in frustration. Since then, my only interaction with it has been spam SMS (with no STOP opt-out) exhorting me to try other features, when I've put that SIM card into other phones.

In other words, I've not exactly had a compelling experience, and the SMS spam is a complete and utter red flag for any business. (I've stopped using Virgin Airlines whenever possible because of text spam - losing them maybe £50-100k lifetime value)

I don't know anyone who uses Ovi either, among friends or family. I never see @ovi.com email addresses, and none of my acquaintances has ever mentioned it, linked to its site from Facebook, or otherwise brought it to my attention.

Compare that to the number of times I have heard the words "Gmail", "iTunes" or "BBM".

Now, certainly agree that a lot of people buy smartphones for their standalone capabilities (eg a good voice phone, great camera, browser and so on). Certain people buy phones for apps - although I'm unconvinced that's as important as many seem to think.

But a lot of people get swayed in their decisions because of something server-side or cloud-related. Historically, BlackBerry grew because it was the best way to hook into Microsoft Exchange for businesses.

Now, we see other hooks:

  • If you've got a lot of music on iTunes, you'll want an iPhone
  • If you've got a lot of friends on BBM, you'll want a BlackBerry
  • If you're a heavy user of Gmail & other properties, you'll increasingly want an Android, although it's not quite there yet, as obviously you can get G-services on other phones too.
Nokia doesn't have a story here, certainly in the developed world, and I have seen little evidence of imminent viral explosion. Palm never had a server-side lock-in either

In fact, it wouldn't surprise me if Microsoft was the next one to make the connection work, perhaps to Xbox or Kinect, as well as its corporate services and Azure cloud.

Maybe Nokia should swallow a bitter pill, and for developed markets drop Ovi services entirely and act as an ODM partner (or dual-brand supplier) to Facebook?


Brian S Hall said...

It is difficult to see how Nokia can make Ovi compelling given how much effort that would likely require and assumptions that the new CEO would demand a stronger focus on those areas certain to pay off.

You got me with that last bit about Facebook and Nokia. A few days ago I wrote why I wanted Facebook to actually acquire Nokia. For those interested:


Jason Madhosingh said...

Hi Dean-- sorry to hear about this. I work on marketing for Ovi and would like to help. Is there a number I can reach you on?

Jason Madhosingh
Head of Digital Marketing
Ovi by Nokia

Alex said...

I'm cross posting from Forum Oxford, hope that's OK.

Hi, me again to defend Nokia ho ho ;-)

Aside from Dean's (or anyone's) personal testimony being irrelevant - i.e. one can find anyone with any position on any subject under the sun, it's the overall picture that matters, the statement that Ovi is not compelling doesn't seem to tally with the usage stats and growth rate.

In a month and a half from 1st Oct to mid November, Ovi users (not just Ovi Store incidentally) grew by 25 million, from 140 million to 165 million. That's 18% growth! I don't know quite what people are expecting, or think is good, but I would like to know why those are unimpressive numbers and an unimpressive growth rate. It sounds very good to me, or is my judgement out?

More detail here for 1st Oct: http://conversations.nokia.com/2010/10/01/ovis-global-explosion/
and more specifically Ovi Store from 18th Nov: http://conversations.nokia.com/2010/11/18/ovi-store-3-million-downloads-a-day/

I don't see why Ovi (or any other service) has to conquer the world to be considered a success (or compelling, or worth not sticking in the bin)?

> If you've got a lot of music on iTunes, you'll want an iPhone
I disagree, perfectly possible and easy to use iTunes and stick the songs on a Nokia device.

> If you're a heavy user of Gmail & other properties, you'll increasingly want an Android,
Why? I get a perfectly decent experience of Google properties on a Nokia device too.

I may indeed get a slightly better experience of iTunes on iPhone, and Google services on Android, but so what? If it's still more than good enough on other devices, and if I don't have to put up with the limitations and cost (and crap cameras, and physical weakness etc etc) of iPhone or Androids, then why should people not want something else and yet still use whatever services they want?

This does of course expose a weakness for iPhone and Android, when iTunes and Google services are not USPs for those handsets. Where Nokia are currently failing is in not marketing and exploiting the fact that big name services from competitors actually work very well on their handsets too.

Dean Bubley said...


You've missed my point entirely & have thrown up a straw-man argument.

Ovi's growth in download numbers and "users" does *not* mean that it is part of an end-to-end competitively-differentiated solution that will sway users' decisions vs. alternative smartphones to Nokia's.

What is there that is *compelling*? [Compel: To exert a strong, irresistible force on; sway]

What the growth numbers show is that if you buy a Nokia, you're now more likely to use Ovi. That's good. But is Ovi more likely to make you buy a Nokia in the first place? No.

Yes of course you can use Google apps on non-Android phones, or listen to music. But that doesn't mean that those capabilities will affect consumers' decision paths. Many will look for the easiest or most "obvious" approach - often rightly assuming that it's the most convenient.

Example: this week, a friend of mine wanted a smartphone, as an upgrade from an old Motorola clamshell. His unshakeable belief? "I've got a Mac and an iPod, so obviously the iPhone will work best with them. It's Apple, so I'm sure it will sort everything out automatically".

I asked him if he'd considered getting an Android or other phone as they'd be cheaper . "No, the iPhone's a safer bet".

What's the equivalent story for Nokia / Ovi? What is *unique* and compelling?

Ovi does not currently have the magic ingredient that makes people buy Nokias. It's just getting better for people who've already bought one.


occasi0nalbl0gger said...

Not sure but I have a feeling there is a lot of Nokia-sponsored trolling going around on anything Nokia or Symbian or Meego published anywhere on the web.

Like, this comment of 25m new Ovi users that we litterally see on every vaguely relevant comment roll in the world right now - how many of these are the result of the EUR50 mail-in rebate that Nokia gives to more or less all buyers of its smartphones?

How many of these "new" OVI users are just swayed by the 50 euros and never ever look at OVI again?

Sure, Nokia can afford this rebate, but I am not so certain this is a viable long-term business strategy. Assuming that the 50-euros-sponsored user buys on average 3 paid apps per month for EUR1 each (this is the going rate for most Apple users, not so sure it would work for Nokia's much less affluent user base), and assuming all of Nokia's 30% cut on the app purchase, net of approx. 20% VAT, goes towards paying those 50 Euros, that translates into a truly amazing 16 years payback for Nokia.

Good grief. No wonder Nokia's margins are heading south.