Nokia bullish on multimedia

18 Jun 2003

Night never really falls at this time of year in Helsinki and it was in this atmosphere of almost constant daylight Nokia gave two days of briefings to visiting reporters on where the company was going. Like the weather, the outlook for the mobile giant is decidedly bright.

Nokia has plenty to be pleased about. The company remains unchallenged in terms of handset sales and is continuing to shift the units. It has also been at the centre of the 3G project and has contracts to build many of the upcoming networks around Europe.

With rumours of new handsets, speculation at the event centred on the possibility of the Finnish company unveiling a second 3G phone. However, none was forthcoming except for the announcement that the company’s first 3G handset, the 6650, had passed all in-house testing and was available for sale in Europe. Nokia did give tantalising hints of what lay ahead though. “We deliberately chose quite a conservative design for our first 3G phone in order to identify it clearly,” said Anssi Vanjoki, executive vice-president. “You can expect to see more interesting designs at a later date.”

However, it did unveil two new handsets with the sort of messaging capabilities that the industry sees as the stepping stone to 3G. The first was the 6600, which features a novel design with a large colour screen and integrated camera. Running Nokia’s Series 60 operating system, it features plenty of personal digital assistant-type functionality along with video recording, a digital zoom, multimedia messaging (MMS) and Bluetooth. The 6600 is expected to be launched later this year and will retail at €500 before network subsidies.

The other new handset, the 3100, is aimed squarely at youth market. It features a colour display, MMS and integrated FM radio. The phone can be customised by users using changeable covers. A sure signal of its target audience is the fact that it glows in the dark.

Also launched at the event were a new clip-on camera for newer models such as the 3100, a wireless headset and radio headset. Vanjoki also confirmed that there would be a new model of Communicator before too long to replace the existing 9210i. “Something wonderful is cooking,” he said, grinning.

Nokia is clearly banking on multimedia for the future. While the latest sales figures may indicate the company is shifting MMS-enabled units, whether the technology is being used or not is another question. The company did point out that there were now 3.3 million MMS phones in Europe. However, on the question of how many MMS messages are being sent, Nokia executives drew a blank.

“Multimedia messaging is still in its early stages. We’ve no doubt it will take off when pricing on the market reaches the right point for consumers,” said Nokia president Pekka Ala-Pietilä, affirming his faith in the technology.

While things may be quiet on the 3G handset front, Nokia has been very busy building networks. The company expects that up to 20 commercial 3G networks will be live by the end of the year, though it admitted that this estimation was down from last year’s figure. Despite the slowdown in the market, Nokia said that it had over 30pc of the market share in networks and had delivered more than 20,000 base stations to date.

The company mounted a robust defence to questions regarding the reliability of 3G. According to Yrjö Neuvo, executive vice-president and chief technology officer, the implementation of GSM 10 years ago was far more problematic. He also pointed out that there were still parts of the GPRS standard which haven’t been implemented.

The focus of the event wasn’t solely on equipment. Another speaker was Mitch Lazar, vice-president at Turner Broadcasting, a division of AOL Time Warner. According to Lazar, the company was keen to develop mobile content, but wasn’t best pleased with revenue sharing arrangements. “Operators usually take up to 50pc of revenues. In addition to this they take 100pc of data transport revenues. We’re interested in building new models,” he said. Lazar cited the Sky television platform in the UK as his template, claiming that bundled subscriptions were a successful way of selling content and this could translate to the mobile space.

Lazar’s comments provided an insight into the challenges content providers face in order to make money from mobile content. It is a question that affects every party. After all, if no one buys content, the operators don’t make money from the data traffic and demand drops for the equipment manufacturers. Once the networks are up and running, its an issue that will come to the forefront.

By Dick O’Brien

Pictured at the event was Nokia executive vice president Anssi Vanjoki