Worst of the Week: Nokia’s World

Hello!
And welcome to our Thursday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWirelessNews.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
Let’s hear it for Nokia. That fine Finnish company that throws caution, and in some cases reason, to the wind in its attempts to persuade consumers to buy their wonderful, little devices. From phones that looked like lipstick that nobody bought to phones that tried to mimic a Gameboy that nobody bought, Nokia seems to be willing to design or develop anything that everybody wants to look at, but nobody wants to buy. (Nokia also at one point made toilet paper, which looked like toilet paper and people wanted to buy.)
Their latest ploy? Why they are going to give customers free access to more than 2 million music tracks from Universal Music Group with the purchase of select handsets. The deal seems to lack some details at this point, but the basics are that wireless customers will receive a free one-year subscription to the music service when they purchase select Nokia devices. Word is that customers will be able to download and keep as much music as they can over the 12-month subscription, and that they can receive a new subscription with the purchase of a new handset. Sounds pretty cool.
Now, we all know that Nokia has had a contentious relationship of late with U.S. wireless carriers. While the carriers have always maintained strict control of the sales channel, Nokia has been selling devices through its own retail channels and offering unlocked devices. Sure, Nokia has tried to downplay the competition with carriers, but the tension is there.
But this free music offer should take that tension to a new level. In essence, Nokia is usurping the all-valuable handset subsidy model that carriers rely on to attract consumers. Sure, I can get a couple hundred bucks off if I buy a Nokia phone locked to AT&T Mobility or T-Mobile USA’s network, but I could get the same phone unlocked for a slightly higher price along with a year of free music downloads. This should take the Nokia/carrier relationship from contentious to the “Itchy & Scratchy” level.
Of course, if this ploy does make some headway we can expect carriers to counter with increased freebies of their own. And while no one has asked, I would like to offer a couple of suggestions:
1. A dozen free donuts per week for a year delivered by the carrier’s CEO, or in the case of Sprint Nextel delivered by their marketing department who don’t seem to be busy with anything else anyway.
2. A free iPhone sticker on each non-iPhone handset sold so the 190 million wireless customers in the U.S. not on AT&T Mobility’s network, so they can pretend they are cool. And for those 60 million people with access to the iPhone, a sticker that says “Genuine iPhone” so you can still keep your sense of superiority and worth.
3. Free music downloads for a year. Hey, if it works for Nokia, why not offer the same? Imitation is the sincerest form of flattery, or in the case of wireless, imitation is how business is done.
OK! Enough of that.
Thanks for checking out this Worst of the Week column. And now, some extras:
–AT&T announced it will get out of the payphone business this week, a brutal hit for those 7 people in the country who rely heavily on their friendly, neighborhood payphone to catch up with friends and family. AT&T claims that there are currently 1 million payphones still taking up space across the country, down from a high of 2.6 million phones in 1998. The company also noted that it “will be attentive to the needs of both customers and employees during the 13-month process of phasing out the business,” which should let those 7 customers rest a little easier.
–Verizon Wireless’ announcement last week that it would (eventually) open its network to any mobile device (some restrictions apply) brought out plenty of comments from those applauding the move as well as those who thought the announcement did not go far enough. Perhaps the best bandwagon jumper had to be Hop-On Inc., which earlier this week said it was bringing back its disposable cellphone for use on VZW’s newly-liberated (see fine print for meaning of open) network. Hop-On, which somehow has struggled to find a market for its disposable cellphone, is a breathe of fresh air in this increasingly eco-friendly world.
–As is often the case in the wireless industry, whenever one carrier makes a big announcement-see Verizon Wireless’ open-access news-others try to counter with news of their own: See Sprint Nextel announcing customers can now download full Hawaiian songs from the Mountain Apple catalogue to their wireless device. Now, we all know that Verizon Wireless received more publicity for its announcement, but Sprint Nextel, which I am now referring to as the Rodney Dangerfield of the wireless industry, deserved some pub of its own. Just read the details of the announcement: “Featuring titles from the highly popular artist, Israel Kamakawiwo’ole and the Brothers Cazimero, customers can download full songs right to their phone for 99 cents per song with any data plan.” And before you ask, a broad selection of Don Ho songs was offered prior to the news.
I welcome your comments. Please send me an e-mail at dmeyer@crain.com.