January 22, 2009

Nokia To Challenge RIM In Mobile Email Market

Nokia plans to rival Blackberry-maker Research in Motion's (RIM) dominance in mobile email as the economic slowdown forces the market to shift toward retail consumers.

Nokia has attempted to crack the market in recent years, but RIM's dominant position in the corporate sector has kept the world's largest mobile phone maker at bay.

But a Nokia executive told Reuters the firm was seeing a good take-up of its new messaging service aimed at consumers.

Tom Furlong, head of Nokia's consumer messaging services, said things are clearly heading toward the consumer market and that's where Nokia has its strength.

As of late, RIM has adapted by developing its consumer offering.

Last month, Nokia opened its Ovi email offering by targeting first-time email users and a messaging service, which enables the user to combine many different emails into a cellphone.

Furlong said, so far, the service is up, people are utilizing it and they are getting good traction and good follow up.

He said the company expects to announce its first revenue-sharing agreements with operators for the messaging service within a few months.

"With the Nokia messaging service, we are going after consumers, we are not going head-to-head with enterprise e-mail. We are trying to put mobile email to the masses, masses of people around the globe," he said.

Last year, the company dropped development of its own corporate email product in favor of partnering with Microsoft and IBM while focusing on developing phones for business users to better compete against RIM.

CCS Insight analyst Geoff Blaber said the rivalry now is as intense as it has ever been, with Microsoft and IBM on-board, Nokia is now in position to take on RIM.

The two deals enable Nokia to mobilize close to 90 percent of corporate emails without any extra investment from corporations.

"For Nokia the timing is perfect"”the economic climate is driving the message of costs," Blaber said.

Last year, Nokia dropped support for the Blackberry email service after focusing on partnering with Microsoft and IBM for corporate mobile email, but Furlong said Nokia users would be able to use the service again in the near future.

"We are in the interim period of time when we have dropped support ourselves, and Blackberry is readying support for their service on Nokia devices," Blaber said.

Duncan Stewart, industry analyst at DSAM Consulting in Toronto, said RIM has an almost unshakeable dominant position in the North American enterprise market because of its longstanding success and popularity with large corporate clients.

"If you are the 80-90 percent market-share leader, which RIM is in North America, it's really difficult to break that stranglehold unless RIM stumbles. So far, any stumbles RIM has had have been on the consumer side, not the enterprise side."

He said users are more flippant and tastes change in the consumer market, which may create an opening for Nokia handsets.

But is it possible for Nokia devices to come in and take market share from RIM?

Stewart says, "Absolutely."

"On the other hand, it could go the other way around, too," he added.