This week the Finnish wireless matriarch is navigating the blaring of beats and slaughtering of monsters at the
video and computer game convention with care. Nokia is casually trying to fit in among the
expletive exchanges and
pyrotechnic displays in the hopes of enticing people to play new Nokia games. It's all a part of training mobile phone users to think of their phones for more than voice and hooking them on the data-driven services that will be crucial to revenue goals from the upcoming speedy 2.5G and 3G wireless networks.
Now and then you have to sacrifice a little dignity for the good of the business.
Nokia released two new games playable on the Nokia 9210 Communicator color-screened phone at E3, one each for fans of soccer and golf. It also announced it would use
RealPlayer to support music on its new home-entertainment appliance, the Nokia Media Terminal, which offers video games along with Internet connectivity, TV-show recording and digital video. Finally, Nokia announced new games for its wireless-access protocol (WAP) phones via the Nokia Mobile Entertainment Service. You thought Mother Nokia could only whistle her little phone jingle. Guess again, Nokia is increasingly getting hip to the content game. Still, it's a forward-thinking strategy. Recognizable revenues won't show up for a year or more and they'll be negligible compared with Nokia's usual take.
CEO Jorma Ollila has stressed in recent talks with the analyst community that the Club Nokia site -- where European and African Nokia mobile phone users can download top-40 hits directly to replace their phone ringer or pick up a few games -- is a big revenue opportunity for the company. More importantly, Club Nokia is a living, beeping example of the services that mobile users will pay for on pricey new wireless networks.
"These are self-fulfilling sales for Nokia," says
Thomas Weisel Partners
analyst Matt Finick. "If Nokia drives usage, it drives adoption for next-generation handsets and drives carriers to build out more capacity."
More than direct Club Nokia revenue, Nokia is looking at its content to complete its sales pitch for 2.5 G and 3G offerings, from the chicken to the egg. Nervous big carriers are expected to shell out lots of cash to upgrade their systems, depending on unproven revenue streams to make their investments worthwhile. Nokia is filling in the variables by creating Club Nokia content ahead of time. The company can sell carriers next-generation equipment, its market-share leading handsets and the content to start generating revenues.
Investors have been questioning Nokia nervously about potential conflicts with those carriers that are probably more likely to want their own name, rather than Nokia's, on the services mobile phone users dial up. Finick isn't concerned: "Carriers are not in a position to ignore content if Nokia has it." Nokia can deal with that generation gap later, perhaps licensing its Club Nokia content to carriers under carrier-labeled services. For now, it's winding its way through the strobe-lighted, deafening world of content -- whatever it takes to raise 2.5G and 3G right.