Nokia plots services route with Navteq buy

Finnish handset vendor Nokia continued its march into the services arena on Monday, through the acquisition of US mapping and location based services (LBS) firm Navteq.

It is beleived that “deep discussions” have been ongoing for some weeks and Nokia just confirmed that it will pay $8.1bn for the firm, making it Nokia’s largest acquisition to date.

In 2003 Nokia closed down its Club Nokia portal, which sold ringtones and other mobile content direct to end users, after pressure from disgruntled carriers concerned about the vendor’s bid for a closer relationship with end users.

But the world’s largest handset manufacturer opted to regroup rather than withdraw and, at the end of August this year, launched a new portal, Ovi. Nokia trumpeted the music download capabilities of Ovi, which drew on its August 2006 acquisition of digital music firm Loudeye. Ovi launched as hype surrounding the iPhone was reaching fever pitch.

Last month, Nokia bought mobile advertising specialist Enpocket for an undisclosed sum, an event which coincided with the launch of Google’s Adsense for mobile service.

Nokia commands almost 40 per cent of the handset market but evidently believes that, at least in part, its future success rests on securing a share of the services market. At the launch of Ovi, Nokia chief executive, Olli Pekka Kallasvuo, announced: “Devices alone are not enough anymore.”

It is unlikely that its fellow handset vendors will have the wherewithal to follow Nokia into this segment, though.

In 2007, carriers seem to be more relaxed about their suppliers’ designs on the end users. While there have been suggestions that Orange in particular reacted warily to the launch of Ovi, other operators are more sanguine.

Jens Schulte-Bockum, global director of terminals for the Vodafone Group, is emphatic in his assertion that operators remain the strongest point of contact with the end user, but he is relaxed about the Ovi development. “We have already announced a marked move away from an operator-controlled walled garden into very explicitly supporting open mobile internet experiences and working with a multitude of partners: internet players like Myspace, Google Maps, eBay and Youtube,” he said.

Location based services have slow to mature in the cellular industry. It is widely felt that the ability to pinpoint the position of mobile subscribers offers great potential for commercially viable and user friendly services. But to date the most movement has been centred on safety issues such as the 911 directive in the US that requires operators to be able to locate their customers to within certain distance parameters.