Today Nokia announced that it is acquiring Oz, the mobile IM and email provider. First things first: Congratulations to Skuli and team. Secondly, one must pose the question: Is there no stopping Nokia? In the midst of a worldwide financial crisis that has all sources of cash completely ferklempt, and even as its own stock price takes a beating, Nokia brazenly forges ahead with non-trivial acquisitions, confident in its market position, its strategy and its fundamentals. And why shouldn’t they? NOK, like many telecom sector companies, (and one might even say all companies ex-financial sector) has strong fundamentals, and while the contagion of fear may certainly affect them as investors (who are all on some level speculators) run for the door, this is exactly the time when acting out of fear paralyzes companies. And so Nokia will probably pull farther out in front as its competitors succomb to fear at exactly the wrong moment.
But I digress - I am not a financial pundit, and what I really wanted to talk about is the Software and Services strategy in the mobile space and what the acquisition of Oz means for the incumbents competitive to Nokia.
Nokia bought Oz for an obvious reason: They have been sending out 200mm feature phones a year with no 3rd-party messaging capability. Baking consumer email and IM into those devices solves that problem, and serves well their Software and Services strategy. As devices become less “discreet hardware” and more “service-delivery platforms,” the importance of filling the void for consumers increases. Companies like Oz fill that void for IM and email very well.
In fact, there are a lot of platform companies that fill similar voids. One need only look at Nokia’s history of acquisitions to identify those voids:
Navteq – location services
Enpocket – ad serving
Plazes – social mapping
Loudeye – music
Twango – social networking
Avvenu – desktop sync
Now all they need is Search, Games, News, Weather, Sports, Photo Upload, VoIP and Contact Sync and they effectively become a mobile media company likely to rival, in the long run, AOL, Yahoo, MSN, etc.
I frankly expect to see no slowdown at Nokia and wouldn’t be surprised if they kept ticking off “need to have” verticals with more acquisitions. Of course, near and dear to my heart is the social networking vertical. Just as Nokia can now provide 3rd-party IM and email, so will they eventually provide 3rd-party social networking. (If consumer trends continue in this direction.) Twango became Nokia Share, which is not like “an Oz for social networking.”
But that means that everybody else has to continue, as well. Really interesting to me is what happens when Nokia makes an acquisition. There is a not-small universe of companies around Nokia that, to remain competitive, has to move in a certain direction whenever Nokia moves. Any competitor to their handset or infrastructure division has to now be looking at the Oz acquisition and planning a move into 3rd-party messaging, no? And which private companies are “Oz-like”? Certainly there are a slew of platform companies that provide vary types of similar services. It will be interesting to see what happens next.
Mostly, I am interested to see which companies rise to challenge Nokia during this generally fearful moment in history. I personally think Nokia is making bold moves and showing resolve to win at a time when other CEOs might be forced to pursue a more conservative approach.