Nokia Nseries: setting the agenda for mobile multimedia or losing the plot?

Eden Zoller, Principal Analyst

Nokia is never backward in stating its ambitions, and with the Nseries it is attempting to set the agenda for mobile multimedia and produce the defining device category for this market. Nokia calls the Nseries a multimedia computer: a fully converged, feature-rich class of device that it predicts will make single-purpose devices like the iPod obsolete. The big question is, of course, whether or not Nokia's vision is right and whether people will buy into it.

Supporting a converging mobile and web world

What we like about Nokia's vision is the emphasis on the convergence between the mobile content world and the Internet, or more precisely next-generation Internet or Web 2. This is a key driver behind the Nseries, and in line with this Nokia has announced a new range of partnerships for web-based services. The most prominent is a partnership with Yahoo!-owned Flickr, which will give Nseries users access to the huge online photography management and sharing community of the same name. Nokia also launched Nokia Nseries Studio, an online community run by Nokia that encourages users of Nseries phones with a video recorder to create and send in films that can be stored, viewed and shared online. More web-based services are in the pipeline, and a likely contender is an iTunes-like Nokia online music service, judging by hints from Anssi Vanjoki, head of Nokia Multimedia.

Sidelining the operator?

These are great services that tap into how people interact and use the web, and of course maximise the Nseries advanced features. However, what these services won't maximise is operator revenues from content services, although they will, in theory, help drive data traffic (but this is partly dependent on operator data tariffs). The Nseries devices are also not geared for operator channels and Nokia concedes that a "sizeable part" of Nseries sales are through third-party outlets. It thinks the Nseries devices are more suited to resellers in the consumer electronics sector, which in turn says a lot about where Nokia is pitching these devices.

Creating a new device category: multimedia computers

The Nseries is positioned as a new class of mobile device - a converged, feature-rich, web-optimised multimedia computer. It's not a comfortable name but it gets the message across that the Nseries is not a phone. Nokia maintains that convergence of this kind is the way forward and single-purpose devices are dead. This includes CE devices like MP3 players (read iPod) and digital cameras, but if you follow the logic through then it also applies to mobile phones that fail to embrace convergence. It has a point but is overstating the case. Our main issue is with Nokia's take on demand for fully converged devices like multimedia computers. While we agree that convergence is happening and that devices will need new features, we don't think you need to put everything into a single device, or at least not just yet for most people. The vast majority of users still gravitate to compact, nicely designed mid-range phones optimised to support a set of related applications, and will continue to do so for the medium term. Phones that support full-track music downloads, music video clips and photos are a prime example. This is also what the iPod now does, minus connectivity (so not quite the single-purpose device Nokia would have us believe).

Moreover, if you look more closely at the Nseries devices they are in fact optimised around a particular application or, in Nokia speak, a "lead experience". The Nseries devices are optimised for either video, photography or music, although all are based on Symbian/Series 60, have high-end megapixel cameras, are music oriented and have good browsing. Looked at in this way, the term 'multimedia computer' is really about Nokia creating a future device category that the Nseries will eventually evolve to fill. The other important thing that Nokia is trying to do with flagship Nseries models like the N91 and N93 is to raise the bar on features and functionality. We think that in some respects these top-end Nseries devices are experiments. Nokia will see which features consumers really take to and then push them down through the range.

New Nseries stars

The Nseries devices launched in Berlin at the end of April 2006, the N93, N72 and N73, are equipped with some great features, although most are not a radical departure from the existing Nseries products. The flagship N93 was the device that caught our eye most. It is fully optimised for video, with MPEG 4 VGA video capture at 30 frames per second. It has an internal memory of up to 50Mb (not huge for this type of device) that can be expanded via memory card to 2GB. It also comes bundled with Adobe Premiere 2. 0 software for editing video clips and photos on PCs, and also burning videos to DVD. The Nseries devices all support a wide range of connectivity options, wireless and otherwise (WLAN UPnP, USB and Bluetooth), and an interesting addition with the N93 is support for TV-out. This means you can cable the device to the TV to view videos, and also use the TV screen for viewing emails and browsing. This is an interesting development and signals that Nokia sees the multimedia computer having a very active role in the networked home.

The existing Nseries models have been doing well for Nokia, and five million units have shipped since the third quarter of last year. The N70 is now one of the best selling 3G phones in the world and is a much more modest affair than the N93 and N91. The N70 has done well because it is a good all-round 3G phone with some nice features.

The hub in the multimedia universe

The convergence of mobile content and the Internet means we are moving away from domain-centric devices to portable devices as the major control mechanism for access to content and services. Nokia recognises this and wants to make sure the connected multimedia computer is the hub in this universe. However, this shift is not happening overnight and neither is there high demand for the kind of full-on convergence envisioned by Nokia - not yet. In this respect, Nokia is ahead of market development rather than totally out of step with what is happening. We think Nokia probably knows this, and what Nseries is really about is shaking things up, setting an agenda and ensuring that Nokia, its products and services sit centre stage.

Eden is a Principal Analyst with Ovum's consumer group practice. Her key focus is strategic analysis of the wireless market, with particular expertise in enhanced content and messaging services, mobile marketing and next-generation devices/platforms.