Why is Nokia hosting a party in Prague for 60 mobile operators and software writers?
It's only a couple of months since Qualcomm put heavy pressure on the GSM world by announcing that BREW applications can now run on GSM phones. It's a threat Nokia can't leave unchallenged. So it has invited operators and software designers to get together with something it calls Preminet, to develop channels.
The idea was launched a year or more ago, with some success, as part of Forum Nokia. Software providers and content providers set up sales channels through Forum Nokia and all went well for a month.
Then Nokia pulled the plug. It had been accused of stealing money from the operators; it went away and developed the new model.
The Preminet concept isn't a runaway success. But after six months (it was announced October last year) it couldn't really expect to be, because it has to sign up customers - phone operators - and vendors - software developers - and then introduce them, and hope they do business.
Here in Prague today, the one unspoken word is "profit" - the operator profit. Voice revenue is falling. Data usage and data revenue is rising - but so far, nobody is making a profit on that revenue. But the ideas are starting to come, thick and fast and unfortunately, Qualcomm's BREW technology has proved more hospitable, in the past, to developers.
The Prague summit aims to fix that.
At this stage, it's going to be funded by Nokia itself. The (substantial) costs of running Forum Nokia and Preminet are seen as legitimate sales promotion expenses. But the plan is that some time (when? nobody knows yet) Nokia would want Preminet to fund itself out of the revenue stream.
What Nokia and Forum Nokia can offer to the developer isn't so much the technology, but the ability to create a marketplace in which there are sensible rules.
Currently, says Steen Thygesen (director of platform solutions for Forum Nokia) there are real problems facing a software or content company which wants to do a deal with more than one operator.
"But the current way of doing business simply doesn't work," he told delegates. "We have assumed that if you amass loads of content, put it into a sort of yellow pages resource, and wait for the customers to find something they like, the market will grow. But customers say this is just too difficult."
So Preminet aims to create a "managed channels" approach - hopefully, influencing buyers and sellers to evolve similar terms and conditions.
Is it working? Signs are that, early days though this may be, it's encouraging. Delegates here spoke of their frustration when the previous direct-to-customer channel was closed, and not all are sold, yet, on the conviction that Nokia can re-create that revenue stream by working through operators. But they are here, and they are senior guys, and they're taking the idea seriously.
The same goes for the operators - although it's harder to judge whether their expressions of enthusiasm are worth very much. "I wish these operator people would admit that they aren't empowered to make decisions," lamented one developer. "We have wasted hours of time talking to minor functionaries with impressive titles, who keep talking and talking and saying how they like our product - but never go anywhere with it, because they aren't senior enough to make those decisions."
So far, Preminet has (in six months) only signed up three insignificant operators. By contrast, Qualcomm's BREW on gsm ecosystem hosts 1,500 developers and operators at a typical get-together, and moving into GSM is a real threat.
What can Nokia do?
"The summits, like this one, are going to get more focused. There will be geographical focus, next year, on developing geographical areas - one on the Middle East, in Dubai, and one on Russia, in Moscow, for example," promised Thygesen. And then, behind that, Nokia will develop a "master catalogue" of applications and content which the "new channel" can buy from.
"We're driving the concept of a 'shop in a phone' - a client application which provides access to content," said Thygesen.
Too soon to do more than watch, and wonder: but the mood here in Prague was hopeful, if not yet optimistic. Still, nobody knows whether any of these apps or media content opportunities will actually make real money for any operator.
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