Some may view Vodafone’s decision to climb into bed with Nokia to promote its freshly announced internet service, Ovi, as the network rolling over and having its tummy tickled by the manufacturer. A closer look reveals that the operator might have made a shrewd move by nailing its colours to Nokia’s mast.
The precise details surrounding the Vodafone/Nokia deal are still murky. Nokia has said that it will provide the network with some exclusive handsets and any forthcoming joint-branded devices will have a multimedia menu, accessed via a dedicated button, that will lead straight to both Vodafone and Ovi services. At present, Ovi encompasses games, maps and music.
Following the announcement, Nomura analyst Richard Windsor said he was surprised by the deal because he saw Ovi as a threat to operators’ brand value. ‘We would view Vodafone signing up for Ovi almost as an admission of defeat in terms of the brand battle… between branded mobile handset vendors and branded mobile operators,’ he said.
But Vodafone is adamant that this is not the case. ‘Absolutely not. Nokia has a long history of offering state-of-the art devices at a price range available to everyone. Furthermore, Nokia shares a similar customer philosophy as Vodafone – maximising customer choice, allowing the customer to choose a best-suiting device and developing unique and innovative approaches in menu personalisation… it makes sense to join forces and bring the best of both worlds to our customers,’ a Vodafone spokesman said. He added that the operator has ‘a successful track record of co-operation with Nokia’.
While it could be said that this is merely Vodafone’s knee-jerk reaction to the recent activities of Apple, with its iPhone that’s not only dedicated to music but to internet browsing as well, and Google, which has recently announced a mobile platform to rival Ovi, the network has defended its proposition, saying that it believes it is ‘better’.
‘Vodafone and Nokia have agreed to launch an integrated suite of Vodafone services combined with Ovi services on a range of Nokia-branded handsets. The services will offer customers a greater choice of communications, internet services, content and browsing through a range of premium handsets on high-speed 3G and broadband networks,’ the spokesman said. Effectively, what Vodafone is doing is making it far simpler to reach established web brands over a faster link than Apple can offer.
Significantly, Vodafone wasn’t the first major operator to fall for Nokia’s charms. Telefónica (which ultimately owns O2) announced its participation with Ovi
first. However, Vodafone does appear to have struck a rather advantageous deal with Nokia. As its spokesman said: ‘Broadly, our agreement with Nokia will include time-to-market advantages, preferential access to Vodafone services, commitment to customisation of Nokia’s handsets with Vodafone services, management of third-party services, preference given to Vodafone services on the user interface (menu) over a download of a third-party service and preferential branding of Vodafone over Nokia services.’
Anssi Vanjoki, VP for Nokia Multimedia, has claimed that the manufacturer is offering Vodafone the ability to bring ‘location and context awareness to enable people to participate with their favourite internet services’ from their mobile phones rather than their desktop PCs.
The agreement between operator and manufacturer has actually pushed Vodafone’s brand up to the top, rather than allowing it to be subsumed by the Nokia name. Analyst Ben Wood of CCS Insight believes Vodafone’s strategy is a positive development. ‘Ultimately, its more open approach should help increase non-voice revenues, while driving down R&D costs and most critically, reducing customer churn.’