Nokia's Ovi Faces Tough Challenges

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Nokia has added another feature to its online services and social-networking site, Ovi, as it continues to branch out beyond mobile-phone hardware into online services.

Files on Ovi lets users access files stored on their computers remotely from their mobile phones. Users can view Microsoft Word, Adobe PDF and other files. They can also use their mobile phones to send such documents from their computers to other people.

Users don't have to leave their computers on to access the files remotely. In advance, they choose the folders and files that they want to be accessible, and those items are stored online for access from their phones.

Files on Ovi and several other Ovi services compete directly with some better-known online brands, pointing to the challenges that Nokia faces entering the online services market. They are challenges, however, that Nokia must face as it becomes increasingly clear that mobile-phone makers must look for sources of revenue beyond hardware sales, an analyst said.

Files on Ovi isn't a totally new concept. Motorola has a similar offering, called Share. Both services are based on technology developed by Avvenu, a company that Nokia acquired last year.

The file-sharing services are similar also to those beginning to be rolled out by companies more often associated with online services, like Google and Microsoft. Microsoft, for example, recently began testing a somewhat similar service called Live Mesh, designed to be a central storage place for files and documents that can be accessed from many devices, including, eventually, mobile phones. Google has extended its online document-sharing service, Google Docs, to be accessible by mobile phones.

With Ovi, which includes photo-sharing, gaming, music and maps services, Nokia is also going head-to-head with the likes of MySpace and Facebook, although the handset giant is reluctant to say so.

"We host media," said Serena Glover, Nokia's director of entertainment and communications, in a recent interview. Glover is responsible in part for Share on Ovi, the service that lets people store and share photos and video.

Rather than compete directly with Facebook, MySpace and other popular social-networking sites, Nokia wants to position Share on Ovi as a central online place to store and manage photos and videos. Users then embed the media from Ovi onto other pages.

"You upload once, tag it once. If you don't like that photo, you delete it from Ovi and it's gone from everywhere," she said. "One reason I founded Twango in the first place is I realized our media is scattered all over the Web and we lose control over it," she said.

Glover founded Twango, a company that Nokia acquired and turned into Share on Ovi. The acquisition should encourage more people to use the service, since they are likely to have more confidence in storing their data with a large, established company like Nokia rather than a small startup, she said.

The bigger problem, however, may be making sure people even know Ovi exists. "Nokia has a number of challenges, not least of which is no one knows Ovi," said Jack Gold, an analyst at Jack Gold Associates.

In what he says is typical Nokia fashion, the handset giant isn't marketing Ovi in a particularly aggressive fashion. The new Files offering, for example, didn't get any sort of official news release. It just appeared on the main Ovi site with a brief blog post.

But Nokia would do well to step up its push for customers to use these online services, Gold said. "Ovi is important to Nokia ... because Nokia realizes that the future is not just in selling handsets," Gold said. Handset makers are learning that as the market becomes saturated with mobile users, it's increasingly difficult to grow revenue on handset sales. Ongoing revenue in the mobile market is expected to come from services and potentially accompanying advertising.

Nokia should get some high-profile partners, such as a music label, to help make its offerings more attractive, Gold said. The company should also get more aggressive.

"If Nokia is going to be successful ... they have to put a lot of effort and ramp up quickly. My take on it is that Nokia is going to do it the way it always does things, which is plodding along and trying to do the right thing and not being aggressive, and in this market, that's not going to work," Gold said.

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