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Going Beyond the Hardware to Providing their own Internet Services

A lot of new things have been discovered during the Mobile World Congress. This includes the announcement of Samsung Electronics Co. Ltd that they will be launching Internet services for their handsets. This strategy can place them at par with the Ovi of Nokia Corporation.

Although Samsung has not yet quite reached what Nokia has done with its Ovi, it is already on its way to having a future in providing services that complement the hardware of its mobile phones. But all these services of Samsung Electronics, Nokia, and other wireless network providers have one goal in common, that is to entice their subscribers, keep their carriers happy, and make sure that their subscribers will be loyal to them and always go back to avail more services.

According to the Nokia software and services business head, Ilkka Raiskinen, Ovi has made Nokia Internet savvy. It is the dashboard on the lives of the users.

The new ways that Samsung is adapting for its innovations are based on the models that have been tried and tested by previous service providers who have excelled in their fields of expertise. These include Research In Motion Ltd and Apple Inc with their products the Blackberry and the iPod, respectively. They have made a name for themselves for these gadgets although this is not the main reason for their success. It is also because of the services that make the hardware of these devices work that make consumers come back for more. The iPod by Apple uses iTunes exclusively to be able to play music while the Blackberry smart phone by RIM uses their own servers to deliver emails.

Even if the device is what the consumers look for to purchase, producing a major part of the profits, the services that go with it make it stand out and maintain customer loyalty.

It is vital that the services offered to customers will make them stay on the hardware platform they have gotten used to, according to a comment by Maynard Um, a UBS analyst on Nokia. As with Nokia, the Ovi is not expected to make a significant increase in revenues for Nokia but will definitely make an increase consistent.

In an industry that has confined itself into the manufacture, distribution, and marketing of antennas, moldings, chipsets, processing power for the electronics hooked consumer, the internet becomes a new major model on where they will now base their products on. The introduction of the cellular phone was not appreciated as something other than a communication device until it evolved into becoming multimedia computers, an apt description given by the executives of Nokia on their N-series of mobile phones.

Samsung and Nokia are now trying their hand in the providing of services that are in collaboration with their hardware. They will be facing a lot of competition since there are several companies who have already started giving services way before the others did. Since the wireless carriers would like to put their brands in a more conspicuous space during calls, sending text messages, or using GPS to get their location, those companies who plan to use their own brand for these services may have a hard time implementing this.

There are wireless carriers who are wary of those companies who promote their own brand of services for their handsets. Frequently, if they are just a small company, they might consider this as a good thing especially if they can share in the revenues although those bigger carriers may feel intimidated and threatened. But, if these services are able to generate revenues and improve on the present services, then the carriers may fully consider having it. And yet there are still some mobile phone manufacturers who give the responsibility of services to their carriers.

Motorola Senior Vice President for mergers and acquisitions Don McLellan says that the strategy used by Motorola is to work closely with their carriers, giving personal attention to each one. But with some, such as Sony Ericsson Mobile Communications, they propose to give their clients music downloads using their own Play Now service feature but still rely on their carriers for other services.

At this stage, the market is still unpredictable on how they will take these types of services. It is still early to say how it will turn out. Like Nokia, its Ovi brand of services is still not yet completed, and will probably take more than a year to implement. Even Samsung is still in its early stages in consolidating their services which they are currently outsourcing such as ShoZu for blooging and Navigon for navigation.

It is quite difficult to determine the success of these services using the Internet. According to Nokia, the determination of success is not dependent on the profit that it brings in but on how it is successfully implemented and accepted by the public. This is also the reason why they plan to apply on Ovi more complicated metrics that deal with the retention of customers and the patterns of Internet usage.

However, Ovi and other branded services may be able to generate revenues for themselves by charging the users for the services being rendered so as to generate revenues for the carriers. Advertising may also have a hand in generating income for these services. But these options are still in the drawing boards of these companies.

The telecommunications industry has been constant in their change and improvements for the mobile phones. Their foray into providing their own Internet services such as Ovi still have a long way to prove themselves worthy.