Case study: Nokia Life ToolsMUMBAI, India--Nokia may be a name most would associate with handsets and great user interfaces. But increasingly, the Fin is focusing on solutions and services. We take a look at the launch of Life Tools, which targets an interesting segment in the emerging market of India.
Challenges implementing Life Tools Engaging content partners "Finding the right quality partners across these services (is critical), so that the quality of the information which goes to the consumers is far better than existing systems," head of Service Marketing and Devices at Nokia India, Jasmeet Gandhi, said at an interview. According to SP Narayanan from telco operator IDEA Cellular, 70 percent of India's population are still rural communities and there is a low mobile Internet penetration rate. This has presented the company with various value-added service opportunities such as providing weather alerts, radio on handsets, mobile money transfer, mobile banking, etc. But person-to-person mobile money transfer is currently not available and mobile transactions are restricted mainly to people with bank accounts or credit cards. When asked if IDEA Cellular would be working with Nokia to introduce Nokia Money in India, Narayanan only said that the operator is exploring possible options. The new mobile financial service, which lets users access basic monetary transactions, will be launched in selected markets early next year with Obopay. Skymet Energy, which provides weather forecast updates, is also one of several partners involved in Nokia Life Tools. Jatin Singh from Skymet added that previously, data from the meteorological department didn't go beyond district level. That's what the company is trying to do: Bring the relevant information to that specific level. SMS dependent Narayanan cited the reason that Nokia Life Tools has gained traction is because the service is integrated into the device and available in the local language. There are, however, challenges to the service that relies on SMS technology. The content is delivered via the cellular network and works as long as there is GSM coverage. "SMS, by its nature, can be delayed," Kanjilal said. To deal with this, he said the solution is to work closely with the operators. As Life Tools is a subscription-based service, information updates are sent direct to the user without the person manually requesting for it. So there is minimal intervention in the process. Since SMSes are based on text, there exists an assumption that the users have to be literate. But that's not a problem, according to Kanjilal. "Literacy levels vary state by state, but on a national level this is between 60 and 70 percent, although it's closer to the latter which works out to about 700 million people. "These people are literate, which means they can sign their name or at least read something provided it's in their local language." What users say During a group interview, Dattatrey Bhong, 27, a farmer who has subscribed to the Agriculture package, told the media via a translator that he finds the market price feature most useful. The problems farmers encounter are not only with Mother Nature, they face the more pressing issue of marketing their produce. Previously, Bhong had to go through a middleman agent to get a quote for the market price for his produce. The sum he gets in reality is much lower. With Nokia Life Tools, he said he can now get the prices directly from his handset and can choose which market to sell his produce in. He added that he even managed to earn a profit of 6,000 (US$130) rupees using information provided by the service compared with previous occasions when he had to go through an agent. On a lighter note, Hanat Markad, 35, bought a set of phones and subscribed to the Learning English service for the benefit of his ninth-grade son, Omesh Markad, 12. The handsets cost 3,200 rupees (US$69) each. It's all about services and solutions Providing relevant solutions will increasingly play a major role at Nokia as the company moves away from focusing simply on devices. Speaking about the Life Tools and Ovi store platforms, Gandhi said: "Both are aimed at creating more value for the consumers in terms of what they can do with their devices. Both are aimed at different ends of the market. "Whereas Nokia Life Tools talk to the entry-level consumer, the Ovi store concept aims at the high-end spectrum. Consumers can find relevant apps for themselves even though they may not necessarily have life-changing impacts. On the other hand, Life Tools clearly has a very positive impact on the livelihood of the consumers." Ovum analysts told CNET Asia that "Nokia Life Tools is another plank in Nokia's strategy to generate direct service revenues as device shipments continue to take a hit amid the economic downturn". The analysts drew comparisons between what Nokia is doing in the emerging markets and what Apple has done in the mature markets selling devices that come with an embedded set of services which it manages and sells to end users. The difference, as Ovum pointed out, is that Apple is a niche player, while Nokia has a dominant market share which gives it economies of scale. In its Q3 earnings results, Nokia noted that services contributed 148 million euros in the total net sales of Devices and Services. This represented a year-on-year growth of 29 percent and 5 percent sequential growth compared with the previous quarter. Net sales of Series 30 and Series 40 handsets totaled 3.8 billion euros, an increase of 0.3 billion euros compared with Q2. According to Nokia, its average selling price of mobile phones with embedded services in the last quarter was 41 euros. Life Tools next for Indonesia Earlier this year, Nokia said it had plans to launch Life Tools in other Asian and African countries before the end of 2009. This will begin with Indonesia on November 4, though Kanjilal declined to reveal more. Although Indonesia will be the second country worldwide to get the service with India as reference, Nokia has made it very clear that Life Tools is very market-specific. As such, what works for India may not necessary work for Indonesia, or any other country. Ultimately, Nokia says its Life Tools is as much about empowering people as it is about money. And the mobile phone is the vehicle that drives this forward. Tags: Nokia Corp., entertainment, mobile, handset, emerging market
|
- Talkback
-
There are currently no comments for this story.
To post comments, you need to become a member. It's FREE.
