Nokia CEO Olli-Pekka Kallasvuo said in an interview with a German paper that Nokia will pursue a cut of subscriber revenues for some future data-based devices. As we've previously noted, Apple has set up a triple whammy with the iPhone: the company gets paid when it sells the phone, gets a kickback from service providers, and gets a cut of content sold through the iTunes store. In October, Nokia rolled out an unimpressive social network and partnered with Universal Music to start its own music store. Apple has shown the rest of the industry that there is money to be made in more than just handsets, and Nokia wants in on the action.
The New York Times writes that although Nokia has had significant success worldwide — almost 40 percent global market share in cell phones — the company has had a tough time adapting to the U.S. market's "idiosyncrasies."
"We felt we could teach the U.S. market how we do business elsewhere ... and ... that failed," says Nokia's Kalla... — screw it, we'll just call him OPK. "Now we just want to act, based on the needs and requirements of the market." If the Finns can roll out a viable services plan — Nokia's $8.1 billion acquisition of mapping provider Navteq may help here — they could redirect revenue from cell providers back to themselves.
The move would have a cost. Why would AT&T or Sprint want to do business with Nokia when Nokia is trying, in effect, to steal their customers? They wouldn't, and Nokia may screw itself over if it presses the issue. OPK was insightful when he said, "Convergence is a nice, dandy word, but it means industries colliding." Good for Nokia shareholders that he is aware of that, but can he act on it? Don't hold your breath. No wonder Nokia wants to encourage "openness" — that's just a fancy label for its free-for-all profit-grabbing services strategy. Good luck screwing over your partners in an industry that requires partnerships to function.