3GSM: Nokia Inviting Another Dust-Up With Mobile Operators?

A few years back, there was something of a giant stare-down between handset vendors and mobile operators over device customization. Handset vendors wanted their brands to take precedence on handsets, and particularly in devices’ software and interface, while operators were insistent that the vendors implement their customization and branding. It was one of those somewhat silly “who owns the customer?” spats, but in the end, since the operators are the handset makers’ real customers, they won out. Yesterday at the 3GSM World Congress here in Barcelona, Nokia announced several new devices and services — with particular emphasis on navigation and mobile video. Nokia announced a device with built-in GPS and navigation services, which follows its release of free navigation software for a wide variety of handset platforms. Operators have been eyeing the navigation market for some time, and GPS-enabled devices are beginning to make their way to the market in numbers. The potential problem here is that operators want to sell these services; Nokia’s clearly got different ideas. It’s giving away basic location and mapping software, then it wants to charge for premium services, like turn-by-turn directions or other information. So how many operators do you expect to sell the new Nokia 6110 Navigator, which includes access to free navigation software? Not many.

Nokia’s other potential point of conflict is in mobile video. It yesterday touted its work with YouTube to help it create its mobile site, as well as Nokia’s own work to make YouTube and video content from other providers compatible with Nokia phones and provider to their users. The YouTube stuff is pretty interesting, and the company says it expects that within a year of the mobile site’s launch that all videos will be available in mobile formats. This could conflict with the “exclusive” deals that YouTube has signed with certain mobile operators to make a small subset of its content available to their users, including Verizon Wireless, and as announced yesterday, Vodafone. Clearly the companies have different agendas here: Nokia just wants to make its devices appealing to end users, while the operators, of course, want to bill for access to these services, or use exclusive access to try and draw in more subscribers. It feels like the stage is being set for another fight over these sorts of services, and once again, it seems likely that the operators will win. That’s good for them, but whether it’s good for the market overall or for consumers is less clear.

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