Nokia navigation strategy could disrupt PND sector: Firm to offer free nav on select Nokia devices

Nokia is offering people who buy its smartphones free access to its personal and car-based navigation platform in an effort to spur the development of location-based and social-networking applications on its devices and in its app store, as well as create the coveted “stickiness” with end users in what one analyst calls a disruptive market strategy.
The world’s largest handset manufacturer said 20 million existing Nokia handset owners can download the navigation app for free (go to www.nokia.com/maps), essentially doubling the potential existing market for handset-based navigation. Users can download the new version of Ovi Maps with the high-end navigation features, including turn-by-turn voice directions for 74 countries in 46 languages, detailed maps for 180-plus countries and real-time traffic information for more than 10 countries.
Disrupts existing navigation sector
The move by Nokia likely will change the navigation space going forward, said Thilo Koslowski, VP and lead automotive and vehicle ICT analyst with research firm Gartner Inc. Through its Navteq acquisition in 2008, Nokia offers better maps than many of the other mobile navigation services offered by wireless carriers. Offering the service for free likely will disrupt white-label, paid-for services from wireless operators and the personal navigation device manufacturers, he said. Google offers its Google Maps application for free on Android-based wireless devices, but the crowd-sourced information is not as accurate as the Navteq data, Koslowski commented.
Further, the move can help Nokia attract application developers to its Ovi Store to make location-based and social-networking apps. Developers have immediate scale if they write navigation-based apps for Ovi. “The Nokia smartphone market is a compelling target group for developers to go after,” Koslowski noted.
Nokia has publicly stated its plans to move beyond its handset manufacturing business to become a services-based company. Indeed the Finnish-based company has felt increased pressure on its feature-phone business, which requires mass sales because of tight revenue margins, and has been criticized for failing to innovate in the more lucrative smartphone sector. Offering free navigation to end users distinguishes the company from its competitors. Nokia can make money from the move by sharing revenues with apps developers, putting advertising into the navigation tools and offering premium features, Koslowski said.
“Why have a mobile phone and a separate car navigation system that works in only one country or region? Put the two together, make it free, make it global and you almost double the potential size of the mobile navigation market ,” said Annsi Vanjoki, executive vice president, Nokia, in a news release. “Nokia is the only company with a mobile navigation service for both drivers and pedestrians that works across the world. Unlike the legacy car navigation manufacturers, we don’t make you buy maps for different countries or regions even if you’re only visiting for a few days. We offer both navigation and maps free of charge, with all the high-end functionality and features that people now expect.”
“It’s similar to when we added cameras to handsets and became the largest camera manufacturer in the world,” said Nokia’s Christof Hellmis, VP, location services, in an interview with RCR Wireless News. “Tomorrow is the tipping point.”
The navigation feature can be downloaded on 10 Nokia devices today and the company expects to add more in the near future, as well as preload the app on future handsets. Nokia said wireless operators can benefit by positioning the service as a preloaded, free navigation service for end users.
Even though Nokia said it is not opening up its navigation portfolio to other operating system platforms, Koslowski said the company might in the future. “I wouldn’t be surprised if they opened it up to other OS platforms,” once they are comfortable with how they’re playing in the space. “This is all new ground.”