MISSIONARY MAN: Stewart in his L.A. studio. As Nokia's ambassador to the entertainment world, he wants to create an open-source rival to Apple's closed ecosystem. | Photograph by Jill Greenberg
GLOBAL APPEAL: The star of Nokia's new Dance Fabulous game, Gomez sings in English, Hindi, Mandarin, and five other languages. | Photograph by Jill Greenberg
THE MIGHTY FINN: Nokia EVP Ojanperä has had enough of "that fruit company from Cupertino." | Photograph by Jill Greenberg
The gathering in the courtyard dining room at the Greenwich Hotel in Tribeca has the feel of a meeting between the Mafia's dwindling five families and an emerging Balkan gang looking to join forces. Instead of bookmakers, drug smugglers, and racketeers, the endangered species assembled are music executives from the industry's remaining major labels, including Warner and Universal Music, and an agent from the Beatles' Apple Corps.
Despite the general tension typical of an industry in free fall, there is a reunion vibe and everyone greets one another warmly over cocktails, throwing out a bit of cocksure swagger to project the notion that they can still deliver a hit. Still, nobody in attendance would deny that the days of record companies making a killing in the music industry are over.
The hosts for the evening are Nokia's 43-year-old executive vice president of entertainment and communities, Tero Ojanperä, and Eurythmics founder and Nokia consultant, Dave Stewart. The two make for an odd pairing: Stewart with his quintessential British rock-'n'-roll-ness and Ojanperä with his Finnish-savant electrical-engineer-ness. But tuning in closely to Ojanperä's precise, inflected words, it's hard to elude his magnetism, a cross between Andy Warhol mystic and James Bond villain.
Before dinner is served, Ojanperä taps his glass of pinot noir with a knife, waves a piece of paper at his guests, and begins his opening remarks.
"This is an early advertisement from Nokia. It says: A tire you can trust ... from Nokia," he says. "Nokia is a great company from Finland that I joined in 1990. In its history, it has made great car tires and also great rubber boots."
The crowd is visibly flummoxed; after a smattering of awkward laughter, table chatter resumes. Ojanperä is close to losing his audience but plunges on. "We have since become the No. 1 cell-phone company in the world, with nearly 40% market share and 1.1 billion users. Today, Nokia is making 13 phones every second. So you can think about how many we are making during your dinner."
The magnitude of those numbers seems to register on the diners, drawing their attention back to this stranger dressed in black.
"But the numbers are not important," Ojanperä continues. "The point here is, the world is a vibrant place. We are in India, China, Africa, Russia, the United States. Think about a young boy in India who is getting his first phone: He can listen to music or take a picture or watch a movie or even make a movie. In many ways this" -- he holds up his slim E71 handset -- "is his first computer and it is connecting him to the rest of the world for the first time."
Because the group is composed of music execs, Ojanperä then explains Nokia's Comes With Music service, which offers unlimited downloads of more than 6 million songs (that can be kept for life) and is paid for with a fee built into the cost of certain mid-to-high-end Nokia handsets. "The two forces we are competing against are actually nonconsumption and piracy," Ojanperä says. "If we can get people engaged with music and compete against piracy, then we have won the war. And we believe we are revolutionizing the way music is being consumed."
Eyes roll in the audience, but Ojanperä reels them back in. "It's not only about music," he adds. "It's about paying."
That last word hangs in the room's dim yellow glow. "We want to make a difference in the payment for music. Nokia not only wants to revolutionize music, but I am claiming now that we will quickly be the world's biggest entertainment media network."
The last comment elicits snickers from every table. Ojanperä waits for the last chuckle to die. "You can laugh and say, 'What is the point? Nokia is a cell-phone company; it will never get into the entertainment business.' That's okay. Laugh. That's what people did when we said we were going to be the biggest cell-phone company in the world -- back when we were making car tires and rubber boots."
Last year, Nokia sold 472 million cell phones and generated $70 billion in revenue, earning $7 billion in profit. It is the 88th-largest company in the world by revenue, counts more than 1.1 billion customers, sells its products in more than 150 countries, and runs an operating system translated into more than 180 different languages. Nokia's share of the global cell-phone market is greater than its next three competitors combined. Yet when I ask CEO Olli-Pekka Kallasvuo to describe Nokia, the first thing he says is, "We are not a cell-phone company."
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Recent Comments | 19 Total
August 13, 2009 at 3:55am by Average Reader of your magazine
Nokia sucks. They sold equipment to the Iranian government that was used to trace and silence the protesters. On one side you have the gorgeous, young, brave, unarmed university students fighting against an extremist government and on the other side you have Nokia powering the next Hitler.
August 13, 2009 at 12:54pm by Fern L-S
In all fairness, the Music Store is perhaps the best of Nokia's 'new' Ovi offer. On the other hand, is this article paid for by Nokia, or what? I have not read a more biased, one-eyed, fan boy-written article in a very, very, very long time. I, myself have been a keen and faithful Nokia follower for such a long time I lost count however; if Nokia thinks Ovi (which has actually been live much longer than just this year) will ever even as much as 'tickle' its direct competitors (Flickr, Google, Facebook, Google maps, iTunes and more)they are insane. I have personally witnessed their ineptitude, in-fighting and cumbersomeness. It is laughable that they then try to convince the American public of their 'world-dominance' with feel-good articles such as this. It wouldn't surprise me if this had been scripted out of their own headquarters. If I were to write a book over the next year or so, it would be titled: 'Nokia's Ovi: Chronicles of a death foretold' (apologies to Garcia Marquez)
August 14, 2009 at 3:31am by Mark Clarke
When Nokia wake up and realise that "the fruit company in Cupertino" - (what a childish remark that is) don't really make a phone, but a seriously powerful handheld PC that happens to make phone calls, they may stand a chance
August 17, 2009 at 1:50pm by Big D
@Mark Clarke, Nokia's been making "a seriously powerful hand held PC that happens to make phone calls" for years now. Get a clue! How you could read this article (which I doubt you did) and think Nokia doesn't stand a chance, shows complete ignorance. The iPhone is still quite lacking in many hardware specifications compared to, not just to Nokia phones, but many other competitors. Apple's getting there, but still has a way to go. I think the iPhone is a beautiful device and certainly excels in their sweet spot of design and UX, but the phone simply can’t do some of the simplest of things that even the mid-tier Nokia’s have done for years now.
@Fern L-S, I have personal experience with many, if not all, of Nokia's service offerings via Ovi, and feel quite the opposite. The Music service is mediocre at the moment, while their Files, Share, Maps, and Sync services are quite good. Besides, an occasional "feel good" article regarding Nokia is a bit of fresh air in the current "Apple can do no wrong, Jobs is the second coming" attitude in the America press today. Anyone with their head not firmly stuck in American sand knows that the world is a much bigger place that simply the US, especially in the mobile space (we are way behind the rest of the world in that regard).
@Average Reader of your magazine, This one get’s the cake. First and foremost, let’s not get the two companies confused, Nokia and Nokia Siemens Networks are two separate companies. NSN is a spin-off of Nokia’s previous networks division and is no longer part of their devices/services company. Secondly, it defies logic to even consider the notion that NSN would knowingly educate the Iranian regime on how to use network equipment to oppress it’s own people (I think their pretty good at that on their own). Let’s also consider that any equipment sold to Iran was probably sold and in place long before the recent post election conflicts, meaning that in order for any argument such as yours to hold water, NSN would have had to have known long beforehand that such uprisings would occur when they did. The last time I checked, NSN wasn’t in the fortune telling business. NSN more than likely simply saw the Iranian people as potential beneficiaries of such modern technology. Also, do you think NSN was the only company to bid for their business? I would image that Ericsson, Nortel, Motorola, to name a few, all bid for the business. It just happened that NSN got the sale. To now hold them somehow accountable to contributing to the oppression of the Iranian people is absurd. Oh, and let’s not praise Nokia for empowering the Iranian people by providing affordable, well capable devices, equipped with cameras, wifi, MMS and the such. No, we can’t do that. Nokia is an evil company. Come on!!
@Ryan Thompson, I agree regarding emerging markets. However, Nokia’s lack of penetration into the smart phone arena isn’t due to their lack of “smart phones” as much as the nature of the Operator controlled market here in the US. It’s been well documented the strained relationship between Nokia and US operators and how that's effected Nokia penetration into the market. Until that changes, Nokia will continue to have a hard time in the US. But again, it’s not due to a lack of devices. I’ve used many of Nokia’s “smart phones” and they are rock solid.
August 19, 2009 at 10:56am by Martynas Sklizmantas
I hope Nokia will fail. It sucks.
Regarding Iranian comment - don't worry, all GSM providers in your country have and use same products as Iran.
August 19, 2009 at 11:11am by Varun Arora
So many points, I'd better number 'em.. :)
1. I'm inclined to agree with Fern L-S in that the article does appear rather fan-boyish. But then this is not the first one-sided article published by Fast Company in recent times (anyone read the Dubai is Dead! - or something to that effect - story a few days ago?).
2. Nokia was ahead of the curve - and released a great phone - many years ago, called the N95. I bought it then, loved it then, and use it [albeit reluctantly and as an emergency backup] today. When their follow-up to the N95 was the N95 8GB, I knew they'd lost the plot. After that, they've had the thunder stolen from them, whether it's by Samsung, RIM, or "that fruit company from Cupertino" (which, @MarkClarke, is NOT a childish remark but a Finn attempt at humour - their humour is what the Brits would call "dry"... takes a while to appreciate). The N97 is a nice phone - but too little too late. My current phone has a fruit logo on it... I love it and am an unashamed "fanboy" (though I like to think of myself as somewhat balanced...). Nokia needs something revolutionary - not evolutionary - to grab attention again (notwithstanding headline numbers like 13 phones every second).
3. @Mark Borden: That Nokia hasn't made much headway in the US market is very likely a function of Nokia's standing their ground in the face of US telcos' pricing and customization demands. I can't get over the fact that a US carrier charges its customers money to "unlock" access to the phone's data tethering capabilities... Business models in the US are somewhat different from other parts of the world; if all things were equal, and/or if Nokia decided to stop playing the "stare" game with the telcos, things could be different. (BTW, loved the videos you embedded into the story - good use of the medium, kudos).
- Varun Arora
Founder, HomeCamera
www.homecamera.com
August 21, 2009 at 9:41am by Polo Martin
I am curious and intrigued to find out who is behind this future mobile web phone. www.get-a-watson.com. I very much doubt it, but can it be Nokia?
August 21, 2009 at 9:43am by Polo Martin
I am curious and intrigued to find out who is behind this future mobile web phone. www.get-a-watson.com. I very much doubt it, but can it be Nokia?
August 21, 2009 at 11:03am by Rob Rensman
I think the Finnish bloke says it all: he denies that Nokia is a cell phone company. Well, wake up, you ARE! As this 2G business is trying to redefine its business model, it can only do so by trying to get a slice of the iPhone market. Haven't heard anything original from them. Bringing back Dave Stewart from the eighties will only give them retro-cred, no innovation. They're also delusional when they refer to customers in Russia,India and China eager to pay for their media services. Wrong: they DON'T want to pay for anything on their devices! So back to selling dull cell phones I am afraid.
August 21, 2009 at 7:42pm by Todd Roberts
I'll admit. They had me at the beginning with the discussion of micropayments and how handsets put control into the hands of consumers worldwide, but then they roll out Dave Stewart(?) who, no offense to his "relative" progressive thinking, comes off as a name dropping leather-soaked cheesebag from the 80s, which is exactly what is wrong with the music biz today.
August 26, 2009 at 4:57pm by Martin Johnston
You need to check with people who know Nokia from the inside you would find out that they have lost money the past 3 years and have pulled there Tech support out of the us.
August 27, 2009 at 3:20am by VALENTINA RADU
Nokia is Nokia : the best cell phones provider in the wolrld.
August 29, 2009 at 6:17pm by Tyrone Reid
I truly admire Nokia's cross cross marketing approach. Rubber boots, tires, phones and music. The executives at Nokia might want to take a look at my profit start up at staycoolcap.com.
September 2, 2009 at 8:53am by Anthony Cerruti
Nokia talk talk talk, but for a compnay that has such a huge market share or "handsets in peoples hands" the conversion rate for services they offer is miniscule. horray for trying to be an entertainment media mogul but they have failed at ngage twice! have just laid off loads of staff and now are probably going to launch a service which no one will use because the offering they give is sub par and not really mature at launch so still full of issues. They should just focus on the handsets and the operating system for the handsets and leave the entertainment to people who do that.
I hope the new offerings are better but with a company so focused on hardware and release schedules i feel sometimes robbed by nokia. At least apple you know where you are, Nokia are just milking the hardware market they mentioned the slim N97 at Nokia world but what about the people who bought the thick one less than 2 months ago, same with N91 and N95. and 81 and 85.
Again hats off for trying but the CEo is just talking marketing buzzwords lets see if he can put ti into action!!!! as there past history in this is pretty dire for a company so big and with such a high saturation of handsets in users hands.
they need to streamline thier offerings and ensure what they offer actually does what they say easily and without trouble for the user and without hidden operator costs.
stick to hardware and not services unless they want to make a serious offering and not another half arsed attempt to catch the competition!
September 9, 2009 at 4:38am by John Loty
My understanding of the historical and etymological origins of "competition" (both the word and the concept) is that it involved a collaborative striving together to achieve excellence. As in athletic teams in training etc.
It would be evolutionary, revolutionary and innovative - not to mention beneficial to all consumers - if these giants started to think and act as if they really cared about improvement (at all levels) and started to explore ways of working together whilst maintaining their individual identities and businesses.
Yes we need diversity for creativity to flourish but surely we can work out ways to collaborate on the world stage so that understanding of each other is encouraged.
It seems to me that there is a lot of waste (of energy, resources etc) in our present thinking.
I am thinking that we could/should explore ways of being collaboratively competitive. There are some people exploring these collaborative ideas in law and construction. Maybe it could be done with high tech people/companies as well?
September 13, 2009 at 5:31am by Pierre Bellanger
In a closed network the value is in access and terminals (ie phone networks). In an open network (ie mobile Internet) the value is in software services merging terminals and networks. Services are of many kind : maps, search, scheduling, orientation ... But the main use is connecting people and the main software for connecting people is social network. The future of telecoms is social networking. Nokia's motto was in the xx century to connect people through phones and networks, in the xxi it should add connecting people through social software, phones and networks in a seamless way. This is the key, the rest may help but will not change the game.
Pierre Bellanger, founder and ceo www.skyrock.com
September 22, 2009 at 12:26pm by Chris Jones
I think as a serious business phone Apple with the iPhone are some way of the best on the market but then Nokia still lag behind with their Nokia N97, mostly thanks to their use of the ageing Symbian operating system.
Despite this Nokia make a huge range of phones covering a huge spread of the market whilst Apple have just one basic product. Whilst good for its intended audience surely Nokia can feel more confident about its abilities in its core market?
However, from a consumers standpoint Nokia do seen to have lost their way over the last few years. Ten years ago they consistently came up with the most desirable 'must have' phones but now appear to be playing catch up. Samsung left them well behind when they came up with the slide phone and Blackberry have stolen a huge chunk of their business market. Their brand and reputation will mean they will continue to be seem as a big player but they need some breakthrough products very soon to halt a potential decline.
October 6, 2009 at 1:35am by Matthew Costello
Nokia will fail. Not because its a bad idea, but because they keep inviting the wrong group of people to their parties. When Ovi was first announced, their press release didn't mention the word "customer" once. And here they are having a party to launch the store for who? Certainly not the customer. Music distributers' (ie record companies) power and control of copyright was based on their considerable investment in the production and distribution of the physical goods, records and then CD's. Music is decreasingly being delivered physically and so the relevance of the distributors decreases accordingly. Any remaining power they wield in the market is in relation to their control of copyright, a right they contractually gained as a result of their role as distributers or publishers (another archaic business related to physical goods). Music was around long before the record company and music will be around long after. Long live the music and long live the music fan.
October 17, 2009 at 11:23pm by monica fallia
Nokia will fail because they took too much time to realize that the market was changing and was redirecting to quick applications, interactive apis and the interface user design which had to be more friendly.concierge concierge services. It i clear that they did not anticipate the new trends that iphone and blackberry were announcing!