Nokia surfs web to secure future

Steve Lewis, an executive with Nokia Middle East and North Africa, gestures during the launch of Nokia's new series of mobile phones in Dubai.

The world's largest mobile phone manufacturer is betting its future on becoming a web-based services business, and hopes to see the Middle East become a centre of demand for mobile internet services. Originally founded as a 19th-century wood pulp mill, Finland's Nokia has evolved over the last 143 years, producing rubber boots, electrical wires, televisions and most prominently, mobile telecommunications equipment. It now makes more than 40 per cent of the world's mobile phones.

"This is another transformation point," said Steve Lewis, an executive at the Middle East and Africa business unit of Nokia. "Its time to move again: from mobile phones to mobile phones plus services." Yesterday in Dubai, Nokia launched a new range of converged mobile devices that feature closer integration of telephony, mapping, gaming and the internet. Such devices are especially popular in the GCC, according to the company's research.

"There's a high desire for this kind of functionality here," said Mr Lewis. "It's remarkably consistent, when you look at music, gaming, email, navigation - people want that here, more than in most parts of the word." Companies in multiple industries are working hard to move their businesses into the lucrative digital services market, which encompasses everything from selling music and films to advertising-supported online media and social networking.

Apple, a computer maker, has become the world's largest music retailer through its iTunes Music Store, which is tightly integrated with its computers, music players and iconic iPhone mobile device. But at the same time, retailers like Wal-mart, the world's largest, and Virgin in the UK, are opening online entertainment stores. Manufacturers like Dell, the world's largest PC maker, and software makers such as Microsoft and Google, are also moving aggressively into the market.

Mobile network operators such as the UAE's Etisalat are looking to become providers of value-added digital content, as their traditional business of providing access to voice and data networks becomes commoditised. The result is a market space that is swarming with well-funded outside players who look to use their strength in related markets to dominate an emerging industry. For Nokia, whose core proficiency is in engineering and manufacturing, competing in a fast-moving services market will be a challenge.

"What will set us apart is the overall experience," said Mr Lewis. "How do people listen to music, how does their day evolve? How do they store it, where do they listen to it, how do they get new stuff? We want to make this a great overall experience - it's about joining the dots together." With more than a billion customers across the world using its devices, and a large and growing share of what will remain a booming market for years to come, Nokia has the world's largest platform for rolling out new technologies. When the company started adding Global Positioning System (GPS) navigation chips to its phones, it doubled the total global GPS market in just a year. Its addition of basic cameras to its low-mid market devices made it the world's largest camera maker, selling 500 million camera-enabled phones last year.

It hopes that phones like the ones released yesterday will help it become a major seller of digital music, video games, maps and online services. As capabilities like web browsing, music playing and mapping - currently limited to high-end devices -become commonplace, the company will push its services to a huge market. "The ability to take part in the service revolution will be quickly cascading down our product range," said Mr Lewis. "Many people will have their first internet experience through GPRS [a mobile internet technology], even people who don't even have a PC with dial-up internet access at home."

Nokia has made a number of moves in recent years. In 2006, the company spun off its network equipment manufacturing business into a new joint venture with Siemens, the German engineering group. Last year, it acquired the mapping company Navteq for US$8.1 billion (Dh29.7), and purchased Loudeye, a start-up company that aggregates and distributes digital music. It also purchased Empocket, a company specialising in mobile advertising.

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