Orange / Nokia agreement: beyond the PR blurb

Thomas Husson | May 22, 2008, 06:30 PM

Following agreements between Nokia and other operators (Telefonica, Vodafone, T-Mobile), Orange is finally extending its strategic international agreement with the leading handset manufacturer.

Worth noting that Nokia managed to sign deal with the Top 4 European carriers. Initial reactions here and there could have let you think this may not have been that easy.

The facts from the PR:

- addition of ten new Nokia handsets to the Orange Signature range (all services will be integrated into the familiar Orange user interface)

- launch a suite of integrated multimedia services on the new Nokia handsets, launching in H208 across nine major markets

- customers will have direct access to the Orange Music Store, both Orange and NGage games, as well as Nokia Maps

- The two companies plan to create 10 million active Mobile Maps users on Nokia devices within the Orange footprint by 2010.

- Orange "believes that Nokia’s devices and Ovi platform will make a powerful environment for the provision of a joint range of services" -

- Nokia "believes that the combination of Signature and Ovi services will extend and enrich consumer choice” and expects the collaboration to "extend beyond the initial focus areas of music, games, maps and advertising to include other services over time.”

A quick take:

- as always, devils will hide in the details...According to Mobile Entertainment, Ovi services will not necessarily be pre-loaded on all Nseries phones. Nokia Maps may will be branded ‘Orange Maps powered by Nokia’*, while Nokia Music Store will be present only as a link. The primary music offering will instead be Orange Music, which will be offered as a fully functioning app comprising browsable storefront and operator billing.

- Despite the "close cooperation", I think most operators are still perceiving Nokia as a potential threat. At least, we are entering the era of the so-called "co-opetion". However, at this stage, the OVI brand has not really been launched and few advertisements have been seen beyond the business/analyst/press community. In the eyes of the vast majority of consumers, this new brand remains to be created from scratch and it is unclear yet how it will be perceived. Nokia is only at a stage where it is building its online content value proposition step by step (opening one music store one after the other, still facing DRM issues on its N-gage platform...). It will thus take some time before end-users can benefit from a smooth and seamless OVI experience whatever the Nokia phone they own. However, there are few doubts that Nokia has strong ambitions in this field, both to maintain its average handset selling price but also to monetize its content strategy. As stated in the press the other day, Nokia is still in investing mode in that space (must be fun to be a financial analyst those days looking at the valuation of the potential next Internet acquisition target from Nokia...)

- Those deals should still be viewed as part of a traditional client / supplier relationship. In terms of volumes and revenues, the mobile content/services business is way too small in comparison to handset procurement deals (what does OVI potential threat represent to Vodafone Essar in comparison to Nokia's market share in India?...well strictly nothing today). Tomorrow might be another story, which is why I was surprised by the fact that Orange and Nokia have signed for a 3-year agreement.

- as stated, the good news is that it should give consumers choice. One of my colleagues was at Nokia OVI event in London the other day. So I missed the demos but I will try to catch up at the S60 Summit in Barcelona next week.

* UPDATED: a contact of mine told me that there will be no Orange branding for navigation services (only Nokia maps). Let's zait and see how this is marketed in S2 2008. In any case, it is good to see Orange opening up to such strategic partnersrhips.