Nokia hopes ‘free’ leads to ‘big profits’
By Ian GRAYSON
It might have escaped your notice, but Nokia recently took a brave step and started giving mobile phone mapping and guidance software away for free.
It’s a big gamble for the mobile phone giant which stumped up more than $US 8 billion to buy mapping software company Navteq back in late 2007.
The company now needs to show how giving Navteq’s maps away will generate more revenues that selling them.
At first glance it appears an odd move, but it seems the company’s executives are banking on creating an even larger market as a result of their decision.
Putting mapping and guidance capabilities into the hands of Nokia’s massive installed base of handset owners opens up a vast opportunity to sell extra products.
We’ve been hearing about the potential of location-based services for years, and this decision might just kick start the rush that we’ve all been waiting for.
As an application developer, suddenly having a potential market of millions of map-equipped users will be very appealing. For Nokia, commissions earned by selling the apps through its Ovi store could be very lucrative.
Will the profits be worth Nokia’s $8 billion gamble? It’s too early to tell, but it’s certainly breathed life into the mobile phone navigation market.
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Ian Grayson has been a technology journalist for more than 15 years. A former IT editor of The Australian newspaper, he now runs his own freelance business, crafting stories for a range of publications and web sites. He is intrigued by the power that technology wields in the world of work - both for better and for worse - and in this blog offers insights into what it all might mean.
