Nokia Corp. unveiled a system for hosting, delivering and charging for entertainment and application content for mobile phones, at the Cellular Telecommunications and Internet Association's (CTIA's) Wireless IT and Entertainment conference on Monday in San Francisco. With Preminet, Nokia is looking to carve itself a slice of mobile network operators' revenues.
"This is essentially a hosted open-service model for Java and Symbian software from Nokia with a master catalog, a service delivery platform and an optional purchasing client application," said Steen Thygesen, director of Platform Solutions, Forum Nokia. "We want to remove barriers to the take-up of content by end-users as a way of driving revenue, not only through the sale of content but the sale of replacement handsets as users upgrade their phones to ones that can handle rich content."
Preminet provides operators with precertified content such as ringtones, graphics, games and video that the operator can brand and offer over the Web, or via SMS (Short Messaging Service) and WAP (Wireless Application Protocol) over cellular networks based on GSM (Global System for Mobile Communications) or CDMA (Code Division Multiple Access). The service is combined with a system for delivery, billing and revenue distribution among developers, operators and Nokia, though operators can pick and choose the parts of Preminet to implement.
The concept of Nokia's Preminet is similar to the Brew development platform for mobile devices from Qualcomm Inc., a one-stop shop for Brew developers to get applications tested, certified and distributed to Brew carriers.
"As soon as Qualcomm came out with Brew, the picture changed towards one where everything is all managed, and Nokia has been moving steadily closer to that," said Keith Waryas, research manager for wireless business network services at IDC. "Preminet is an evolution rather that revolution for Nokia."
In February, Nokia, of Espoo, Finland, took one of its first steps towards the Brew model when it joined with Sun Microsystems Inc., Motorola Inc., Siemens AG and Sony Ericsson Mobile Communications AB to create the Java Verified Process, a process for testing and certifying Java 2 Micro Edition (J2ME) applications for wireless handheld devices in the same fashion as Brew.
Applications certified by the Java Verified Process receive a stamp of approval in the form of the Java Powered Logo, though it doesn't provide a standard means for distribution. Sun quickly moved to offer an aggregated list of J2ME content from developers on its Java.com Web site, from where Sun could deliver the applications to operators.
"The Java developer community is absolutely enormous, so it's wise to try and help them gets these applications to market," Waryas said, "but I do think that Nokia has an advantage over Sun in offering an end-to-end solution because historically, if you're a carrier, you don't do a whole lot of business with Sun."
Nokia's end-to-end concept for Preminet is more in line with Qualcomm's idea for Brew, and also features a similar revenue sharing model.
"The operator invoices the end user, then at the end of the month, Nokia invoices the operator and settles with all of the developers while taking our slice," said Nokia's Thygesen. Nokia's cut would be an industry standard 10 percent to 20 percent, depending on what the operator takes, he added.
Nokia should have little difficulty rolling out Preminet, as many of the system's pieces are already in place, according to IDC's Waryas, but Nokia will face other challenges. "By putting in some of the pricing structures now, you're putting up some walls and that always presents challenges," Waryas said. "Nokia will have to figure out how best to explain to the operator how this walled structure works out to be in the operator's best interest."
Thygesen said that by allowing developers and operators to select the parts of Preminet they want to use, Nokia is leaving its partners in control of their businesses. "But we do point out that by using the end-to-end solution, operators have the ability to launch a branded service in a very simple manner without major investment," he said.
Nokia launched Preminet worldwide and expects a complete commercial deployment by the end of November, Thygesen said.
"Overall, for Nokia, Preminet is a step in the right direction, but it is not the end game," Waryas said. "I'm not sure it will produce the financial results the company is looking for, but this will bring it closer to the operator and should generate the sale of more handsets, which is always a good thing for Nokia."