Nokia Internet push slips in music, gaming
HELSINKI (Reuters) - Nokia's move into Internet operations faced headwinds on Friday, as the cell phone maker postponed the start of its gaming service due to software testing delays, and Warner pulled its songs from Nokia's music shop.
Context & Ripple Effects
Two years after letting the original N-Gage die a quiet death, Nokia is trying again at mobile entertainment as a services business rather than a dedicated gaming handset — and the reboot is stumbling out of the gate, with the relaunched gaming service postponed for software testing delays and Warner withdrawing its catalog from Nokia's music shop.
The setbacks land just weeks after Nokia positioned itself for this push with the Linux-based N810 internet tablet and a demonstrated S60 touch interface in mid-October 2007, and they arrive as the labels themselves experiment with distribution — Universal, Warner, and EMI all announced flash-drive music preloading plans days before Warner's pullout. The Wall Street Journal's pickup of the Warner story signals how closely the industry is watching whether a handset maker can secure label content.
First-order effects
- Nokia's gaming relaunch slips on software testing delays, pushing back revenue from a service meant to replace the discontinued N-Gage hardware line.
- Warner's withdrawal strips a major-label catalog from Nokia's music shop at launch, weakening the store against rival download offerings.
Second-order effects
- Other labels now hold visible leverage: Warner's exit shows content owners can credibly withhold catalogs from a handset maker's storefront mid-negotiation, hardening licensing terms for Nokia and any rival building a music service.
- Device rivals courting the same entertainment bundle get an opening to pitch operators and users on more reliable launch execution while Nokia's services roadmap slips.
Third-order effects
- If the pattern holds, handset makers' ambitions to become media platforms will be gated less by hardware than by two things they don't fully control: software maturity and label licensing — making content owners kingmakers in the emerging phone-as-entertainment-hub market.
The trend: Phone manufacturers building media services on top of handsets are learning that software readiness and music-label cooperation, not device sales, set the pace of their platform ambitions.