OVI Store: the fight for the home screen

Thomas Husson [Posted by Thomas Husson]

One of the first announcements made at Mobile World Congress this morning in Barcelona is Nokia's answer to the Apple AppStore.

Historically, Nokia has offered various channels for developers or publishers to retail their content/softwares to end-users: from Download! to Mosh or even Widsets. None of them was really available on the home screen. Despite having been made available for years (anyone remembers Preminet?) and for many devices, those channels never gained the traction of the Apple Appstore. The latter saw roughly 500 million downloads in 6 months time. Of course, the store is not only available to the roughly 11M+ iPhones sold during Q3 and Q4 2008 but also to iPod Touch devices. Nevertheless, Apple set the bar quite high due multiple key success factors: a simple-user experience where content is immediately accessible on the home screen, a wide catalogue with more than 15,000 applications with lots of free content, a direct billing relationship and an interesting revenue share agreement (70% for developers).

Ovi_2

Nokia announced today the launch of OVI Store, "the next generation personal media network". It is more than a store but the key idea is to integrate previous services in one single integrated channel. Music and games will continue to be offered separately (with an intergated experience for Nokia Music Stores and for the N-Gage) but under the OVI store, consumers will be able to find 5 interconnected service areas: messaging, maps, games, music but also media (a new category).

Expect, many other staheholders from operators to other handset manufacturers and to OS players to make announcements on Applications Stores in the coming days. AppStore will be one of the buzzwords of MWC 09. Not only because everyone wants to replicate Apple success, but also because it reveals the need to take control of the home screen. Beyond operator deportalization, AppStores represent a new distibution and merchandizing paradigm for mobile content and services.

So is it a me-too approach or can Nokia really differentiate here? It is obvioulsy too early to say as it will depend on a few unknown issues: the quality of the execution, the strength of the OVI brand, the reaction of operators, willingness of Nokia to establish direct relationships with operators.

- the quality and speed of execution will be critical: how easily can the content be accessed, how large is the catalogue of content, how simple is the new merchandizing approach? Internet giants tend to be react very quicly and to offer compelling user-experiences. Will Nokia follow the rhythm? Shifting from a hardware to a software company is Nokia's toughest cultural and organizational challenge but the company is used to re-inventing itself.

- It will also depend on the way the OVI brand is perceived. OVI is the glu that will sticks together very different content and services (from maps to games). As far as OVI is concerned, the press/analyst/industry community should bear in mind the brand does not really exist yet in consumer's mind, despite having been announced a while ago. I read too many analyses of OVI services and how consumers may or may not react to them. Few services have been made available under the OVI umbrella brand and a huge work of integration and marketing still needs to be done. Once this will be done, Nokia will probably really start promoting the brand. However, due to the importance of user-generated content, I think it will be difficult to predict yet how it will be perceived by consumers, what the attributes will be and the extent to which it will nurture the Nokia brand itself. Key here will be Nokia's ability to establish OVI as a personal social media brand.

- In the long run, operators' support will depend on the traditional client/supplier bargaining power. Operators have the possibility to promote part of their own catalogue and to co-brand the store. They will also benefit from micro-billing revenues and may prefer to rely on this new channel. That being said, many of them could perceive a direct threat here and it could hurt Nokia sales particularly in countries where subsidies are high. It might be very different in emerging countries where Nokia can go direclty to consumers.

- to which extent is Nokia ready to embrace a D2C strategy to interact directly with consumers? That's a big challenge and a key success factor as well.

One of the main advantages for Nokia will be the potential large scale of mobile devices developers could tap into. It will thus be critical to upgrade Download! OTA on legacy devices. I had the opportunity to preview a demo of the store that will be launched in May when embedded on the N97. This looks great particularly with very nice "social discovery" tools.

Let's stay tuned; the fight for the home screen is only beginning!