Nokia Pursuing Recurring Services Revenues

All of the major device manufacturers are recognizing the importance of having a library of applications that will meet the lifestyle needs of their customers and provide the sticky features needed to keep those customers through device replacement.

Nokia is opening its eyes to alternative revenue streams. Nokia is also recognizing that to compete in the Smartphone/Netbook space you need to offer a huge library of applications to your customers.

There are literally millions of developers creating applications for Smartphones. These are independent developers. Not Google Android developers. Not Apple iPhone developers. Developers that want to sell their applications on every device on the planet regardless of operating system (OS) and regardless of the device manufacturer. But to get the applications running on Nokia devices, Nokia has to open the door into the device and provide a sales model to deliver the applications.

The Nokia Ovi Software Development Kit (SDK) and the refurbished Ovi Store will allow Nokia to fall into line with the other device manufacturers and offer literally thousands of applications on their devices. And reap revenues from each application sale. And retain customers who would otherwise shift to an alternative manufacturer's device. And gather new customers that would otherwise refuse to shift to Nokia no matter how cool the device because of missing applications.

Competitive pressures are everywhere: 

Nokia is making the right moves. We will see if they execute those moves optimally.

David Croslin consults with leading institutions through GLG