Nokia Readies Leaner Ovi Store to Fight Apple
April 30, 2009
Apple is sitting on a hugely lucrative business that is tied to its iPhone and iPod touch — the App Store. Apple has had massive success with the App Store from the start as users and developers flocked to the online marketplace. In only a year, Apple’s App Store has already generated a billion downloads and millions in revenue for the company.
With the success of the App Store, other mobile providers are thinking that the time is right for them to jump into the market and Nokia plans to do so with a leaner push into third-party applications. Reuters reports that Nokia is building new businesses for mobile internet services like games and maps, but it is scaling back separate investments in the face of sagging demand for its products.
Nokia’s Tero Ojanpera told Reuters, "We are moving into Ovi, into a platform strategy." The Ovi store is set to launch in May and will be available to a significantly larger audience at launch than the App Store is currently. An estimated 50 million Nokia users will have access to the Ovi store when it launches and so far, Apple has sold only 20 million iPhones.
Nokia was forced to take the first quarterly pre-tax loss the firm has ever recorded in January-March and to keep that from happening again it is cutting jobs and slashing costs. Nokia will cut costs in its handset unit by $911 million alone and will cut 360 jobs at its Internet services unit and 90 additional jobs in other parts of the company.
Analyst Bengt Nordstrom from Northstream told Reuters, "As much as iPhone and App Store is a success for Apple, it’s a humiliating defeat for the rest of the mobile industry." He continued saying, "Twenty years of efforts from operators and vendors to create mobile applications that customers like is overtaken in a heartbeat by someone that has never done it before."
Some analysts believe that the time is right for Nokia. Patrick Bossert from Convergys said, "Nokia’s timing is absolutely right."
This post has been written by Shane McGlaun on April 30, 2009 12:10 AM couresy of dailytech.com.
