Nokia is not just about an operating platform- its also about people

Posted on November 2, 2010


This article from the Times accentuates the impact mobile has on every day lives. More over, it shows to this commentator, that the death of Nokia is somewhat over exaggerated. The issue of Nokia survival is not just about their current OS or the life expectancy of Symbian, but also about the general business strategy of integrating into the lives of the billions of people that live in rural or impoverished areas. Its the Law of large Numbers.

(NYT) On Saturday at dawn, hundreds of farmers near Jhansi, an agricultural center in central India, received a succinct but potent text message on their cellphones: the current average wholesale price for 100 kilograms of tomatoes was 600 rupees ($13.26).

In a country where just 7 percent of the population has access to the Internet, such real-time market data is so valuable that the farmers are willing to pay $1.35 a month for the information.

What is unusual about the service is the company selling it: Nokia, the Finnish cellphone maker, which unlike its rivals — Samsung, LG, Apple, Research In Motion and Sony Ericsson — is focusing on some of the world’s poorest consumers.

Since 2009, 6.3 million people have signed up to pay Nokia for commodity data in India, China and Indonesia. On Tuesday, Nokia plans to announce that it is expanding the program, called Life Tools, part of its Ovi mobile services business, to Nigeria.

With 152 million residents, Nigeria is Africa’s most populous country. But, Nokia says, only 29 percent of the Nigerian population owns a cellphone, although other figures place the level higher because some phones are shared.

While media coverage of the mobile industry tends to focus on the fast-growing and lucrative smartphone market, 77 percent of all cellphones sold in the third quarter were simpler models, capable of little more than text messaging.

Two-thirds of the globe’s 4.6 billion mobile phone users live in emerging markets, where Nokia is the market leader with a 34 percent share, according to Strategy Analytics. By selling valuable price data at a relatively low cost, Nokia is blending commercial and humanitarian goals to attract the next generation of upwardly mobile phone users.

“For Nokia, Ovi Life Tools creates tremendous brand loyalty,” said Wally Swain, a mobile analyst with the Yankee Group in Bogotá, Colombia. “Farmers and their families will not want to lose this capability. No other handset manufacturer pursues anything like this.”

So far, farmers are embracing the service, but it is still too early to say whether it is bringing concrete benefits to Nokia, said Mary T. McDowell, the Nokia executive vice president in charge of the company’s cellphone business, other than smartphones, which accounts for about 11 of every 13 units Nokia sells. Most of the subscribers, she said, already had one of the 20 Nokia models required to subscribe to the real-time pricing service.

“The premise here is that we will be able to complement good hardware with services that will attract and create a sticky situation with the consumer,” Ms. McDowell said in an interview. “This is not only good business but also about doing good for the community.”

Anecdotally, Ms. McDowell said the service appeared to be bringing real benefits to impoverished farmers, many of whom often fell victim to opaque markets with unscrupulous middlemen. Nokia said many people using its service were better off.

Dattarey Bhonge, a 27-year-old onion farmer in Barshi, an Indian village 230 miles east of Mumbai, said he learned through Life Tools that he could earn more by selling his onions at a market in nearby Solapur. The additional profit allowed him to buy new farm equipment.

“I don’t have to go anywhere to find the prices,” he said in a video provided by Nokia. “The prices are reliable. I was cheated by my agent. Now he can’t cheat me.”

In India, China and Indonesia, Nokia has entered into commercial partnerships with agricultural extension and weather agencies, which collate, edit, package and translate weather, market news and pricing data in more than 13 local languages.

In Nigeria, Nokia plans to work with Nimet, the Nigerian meteorological agency, and Namin, the Nigerian agricultural market information system, on its service, which will cost 250 Nigerian naira, or $1.75 a month. For an additional $1.40 a month, Nigerian mobile users can receive daily texts, with graphics, on health and disease news, English language training or entertainment and sports news.

Mr. Swain said that he expected Nokia to extend its agricultural information programs soon to South America, most likely to Brazil. Ms. McDowell, the Nokia executive, declined to comment on expansion plans but said the company was aiming for the biggest markets for the service.

Posted in: Nokia