There's still much that needs to be defined about Ovi

By Guillermo Escofet

It was interesting to see that during the unveiling last week of Nokia’s latest Comes With Music phone, the 5800 Xpress Music, Ovi was hardly mentioned by Nokia executives.

Ovi is the name that Nokia has given to all of the services it wants to offer to consumers on its phones, including music. But although more than a year has elapsed since Nokia held a glitzy unveiling ceremony for the Ovi brand, it is still not entirely clear what Ovi is.

Some people think of it as a single platform on which all of Nokia’s content services sit, encompassing music, games, navigation, social networking and others. But although that might be Nokia’s aim eventually, Ovi as it stands now is too nebulous to fit a precise description.

Ovi is no more than an umbrella term under which to group a disparate range of services – a term mostly confined to trade circles that’s used more as an internal Nokia and industry code name for the handset maker’s daring mobile-content ambitions than as a full-fledged brand.

Most ordinary people have not heard of Ovi. That’s hardly surprising, considering that Nokia has yet to properly market it. Its key constituent parts – N-Gage, Nokia Music Store and Nokia Maps – have yet to be Ovi-branded. And no Ovi-branded handset has been announced or unveiled – unlike the ill-fated N-Gage phone several years ago or the Comes With Music phone launched this month in the UK.

The only service Nokia has branded as Ovi is its newly launched personal-information-management suite, enabling users to back up, online, files and contacts on their phone and share pictures, videos and other files with other users. These services are hosted on a web site called Ovi.com, which also links to Nokia’s other content offerings.

Ovi.com has the feel of a portal or doorway to Nokia’s full range of services, so maybe the best definition for Ovi is that of “portal” – after all, Ovi means “door” in Finnish.

In a recent briefing with analysts, Nokia revealed that it intended to eventually offer an open API for Ovi – though it’s not clear whether by “Ovi” it was referring just to the PIM suite or to all its other content services as well. It also said that its Symbian S40 and S60 devices are already optimized to work with Ovi and that it eventually hopes to make Ovi compatible with non-Nokia devices.

Nokia also spoke about the principles that Ovi embodies. It described it as a “unifying system” to enable a converged user experience across mobiles, PCs and the web.

Another thing that’s unclear is what Nokia is hoping to get out of Ovi and its associated services. The Finnish giant is eager to no longer be seen as just a handset maker – it would like to be seen as a web-services company as well.

But what really is its endgame? Is it diversifying its business beyond just hardware sales to offer software services that can generate recurrent revenue streams? Or is it just using Ovi as a value-add to boost handset-sales revenue?

In the analyst briefing, Nokia said that it hoped to generate both direct and indirect revenues through Ovi – direct revenues from download and subscription fees and indirect revenues from advertising. It added that it is also after “loyalty and retention” in its core device business.

It is questionable whether the money Nokia can make from content services will ever be enough to rival what it makes from handset sales. In fact, it is likely that some services, such as Comes With Music – which bundles a year’s unlimited access to millions of tracks with the price of a phone – might prove unprofitable.

The sudden departure of Nokia’s CTO recently has led to rumors that he was pushed out because the costs on Comes With Music allegedly don’t add up – that Nokia will be forking out much more money to the music labels than it will make from the service.

But Comes With Music is certainly the most eye-catching – not to say maverick – part of Nokia’s recent thrust into content services and is intimately connected to its Music Store. Still, Nokia has not gone out of its way to talk about Comes With Music within the wider Ovi context.

That might have something to do with another potential problem with Comes With Music – its undesirability to operators.

Ultimately, it is worth remembering that Nokia is by far the largest mobile-phone vendor by market share, and it can’t go it alone – without the operators – without seriously crippling its handset sales. How far it can go with its mobile-content ambitions will very much depend on operator acquiescence.