Nokia Kills Ovi Brand But Keeps Service Ambitions

Nokia’s announced that it will discontinue use of the Ovi brand for its services and simply use “Nokia” instead. The change will start in July this year and — in rather a long process — take until the end of 2012 to complete across all countries and services.

The company’s new chief marketing officer, Jerri DeVard, explained that “By centralizing our services identity under one brand, not two, we will reinforce the powerful master brand of Nokia and unify our brand architecture… The reasons for this decision include the fact that Nokia is a well-known and highly-loved brand the world over. Our mobile experiences are tightly integrated with our devices — there is no longer a differentiation.”

She also made it clear that this is only a name change. It doesn’t affect the ambition or the technical road maps for the services.

I think this is a pragmatic and sensible change that’ll save a significant amount of marketing budget. It has a large symbolic value, allowing the services part of Nokia to move into its next phase.

When Nokia launched Ovi in August 2007 at a glitzy event in London, the new brand embodied the ego and ambition of a company riding high after trouncing Motorola, enjoying huge success in smartphones with the N95, as well as dominating the mid- and lower end of mobile phones with the 6300 and 1200 series.

Following a far-sighted review in 2006, Nokia had decided that Internet services were central to its future success, that these services would condense into a few ecosystems and that Nokia would be the leader of one of those ecosystems. Ovi would be the retail brand for Nokia’s own services, but would also be a portal for third-party consumer services. In addition, there’d be wholesale services available to ecosystem members. Former EVP Anssi Vanjoki was in the driving seat of this change, evangelising that Nokia had completely re-invented itself once before (shifting from rubber boots to mobile phones) and was at the start of its next re-invention.

Ovi was chosen as a separate brand from Nokia, partly as a way of placating network operators, which at the time were very nervous about a trusted partner cutting them out of the services loop.

Nokia set about the task by using a string of acquisitions (Intellisync, gate5, Loudeye, Twango, Enpocket, Navteq, Plazes, Plum, Dopplr and others) to create Ovi Music, Ovi Maps, Ovi Share, Ovi Calendar, Ovi Mail, Ovi Store and a host of future services.

At this point things started to go wrong. The iPhone and Android stormed the market, leaving Nokia increasingly vulnerable in the smartphone segment. Nokia found it very hard to take a disparate set of technologies and back-end systems and turn them into a coherent set of global Internet services. It also struggled to run parallel but converging road maps for a wide range of services, especially in a complex organisation with tortuous and slow decision-making.

Competitiveness evaporated as it became evident that many applications and third-party services did a better job than comparable Ovi offerings. As a result Nokia progressively scaled back and simplified its service ambitions. This resulted in significant value destruction for the various acquisitions and in complete rewrites of most of the initial services. It also proved expensive to invest in the Ovi brand, a word that made little sense to most people.

After three years Nokia found itself with less ego, lower ambition, and a few large-scale and successful services, with others still operating but with little investment.

A source of tension for hardware companies providing services is whether the role of their services is to support equipment sales, or to be a profit centre in their own right. If they’re to be a profit centre, they need to be scaled up and serve a broad range of clients, with the parent company becoming just another customer.

As Nokia’s corporate ego fell away on the broad vision for services, its ambition in a few areas grew. Maps and context services were among the most prominent of these. Navteq operates largely at arm’s length from Nokia. It had a substantial B2B mapping business before being acquired by Nokia and expanded this to become one of the bright spots in Nokia’s results. One part of Nokia’s goal now is to “horizontalize” Nokia Maps and Navteq services. Major new opportunities over the past 12 months have come from relationships with Yahoo and Microsoft. The other part of the goal is to invest further in context services, which use richer information about who and where users are, what’s around them and what “mode” they’re in. A good example is Nokia Life Tools, launched in India and expanding across emerging markets.

With this reduction in scope, but greater focus on areas such as context, has come the realisation that Nokia is very unlikely to lead a successful Web ecosystem on its own, at least for smartphones in the developed world. It is much more likely that it’ll be a major participant in a broader environment. This has resonated nicely with Microsoft’s shift of focus, which took place as it built up Bing (and as Android powered ahead). Microsoft now appears to be allying energetically with companies that, collectively, can build the “anti-Google”. Nokia should ride on the coat-tails of this, and seek, for example, mapping partnerships with Baidu, Renren and others.

The symbolic value of killing the Ovi brand is that it marks the official end of the Anssi Vanjoki era and of his vision for Nokia’s future in services. It clears out that legacy and makes space for articulating a different vision for the next phase of Nokia’s journey.