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December 4, 2009

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Handset makers in race to snare mobile apps market

FORGET all the whiz-bang new handsets. When more than 200 journalists crowded into a demonstration room at Nokia's headquarters in Helsinki, what riveted their attention were all the new applications for mobile phones.

Journalists marveled at how Nokia has moved beyond just handset manufacturing to marry its products with the Internet. Among the new services available: multi-angle and 3D navigation for drivers, job hunting for migrant workers and tracking the spread of diseases for health officials.

"Nokia is an active thinker of the mobile Internet and its huge opportunities," said Mary McDowell, Nokia executive vice president and chief development officer. "The hand-held device is a bridge to mix the physical world and the digital world."

Nokia and partners unveiled about 15 mobile applications during a conference called "The Way We Live Next," which was held in the Finnish capital last month. In 2011, Nokia said it expects more than 300 million users will choose its mobile applications services under the brand Ovi.

Leading position

It's imperative for Nokia to become "smarter" and invest more on mobile applications and services, which its rival Apple Inc already did on the iPhone last year, if it aims to consolidate its leading position in the mobile market, analysts said.

Application downloads to mobile devices have been the subject of a great deal of hype since Apple launched its App Store in 2008.

"Many of Apple's competitors in the devices market are following hot on its heels, and not a month goes by without an application store launch," said Michele Mackenzie, principal analyst of United Kingdom-based research firm Ovum.

Nokia's share of the worldwide smartphone market reached an all time low of 39 percent in the third quarter, compared with 45 percent in the second quarter. In the same period, Research In Motion, which sells the BlackBerry handset, climbed to a 20 percent market share, its highest yet, from 15.9 percent. Apple's market share rose to 17.1 percent from 12.9 percent, according to Gartner Inc, a United States-based research firm.

"Smartphones continued to represent the fastest-growing segment of the mobile market, and we remain confident about the potential for smartphones in the fourth quarter and in 2010," said Carolina Milanesi, Gartner's research director.

In China, the world's biggest mobile phone market, Apple and China Unicom launched the iPhone in October. RIM plans to unveil the BlackBerry with partner China Telecom next month.

Nokia said it plans to launch Ovi "soon" in China, without giving details about its timetable. Besides regular music, reading and mail apps, Nokia and its partners have developed various applications including entertainment tools, financial services and even job hunting.

"We can't take the risk of missing opportunities in mobile applications," said Purnima Kochikar, vice president of Forum Nokia Developer Community.

During the demo in Helsinki, Mobile JobHunt was the only app developed by a Chinese firm.

Low-cost solution

Mobile JobHunt, the brainchild of Shenzhen-based LinkStar Electronics Group Co, provides timely and accurate blue-collar job information from major cities across China. It supports low-end Nokia phones. Other related information services such as employment news, skills training and workers' legal rights are also included. Migrant workers can receive subscribed short messages if they pay about 5 yuan (73 US cents) a month.

"It's a potential gold mine, especially in a recession," said Jason Liu, president and chief executive of LinkStar. "Millions of people in rural areas move into cities every year in China. They need jobs, and we provide low-cost solutions for them."

Through another application called Nokia HealthRadar, users can track the spread of diseases through mobile phones. The system allows health professionals to easily report disease-related data, which is then analyzed on the server and visualized on a mobile device used by health officials.

"It takes two weeks to collect data disease in India. Now, it takes only several days," said Dhaval Joshi, a researcher at the Nokia research center based in India.

The service is especially useful in markets like India and Africa, where computers and Internet infrastructure aren't always very sophisticated, Joshi added.

Other applications include Ground Guidance for pedestrian navigation and the Linked Internet UI Concept, which allows a user to easily track online the activities of his contacts. Nokia Point and Find enables people on the move to find and connect to relevant information and services by simply pointing their camera phone at real-life objects.

Nokia Data Gathering enables the transmission of questionnaires and interview results over mobile networks in near real-time, for nonprofit groups at present.

"Nokia, even though as a leader in the device market, knows the necessity of spending more on applications," said Fu Liang, an independent telecommunications analyst based in Beijing.

"The mobile application battle war has just started in China," Fu said.

User-pay mobile applications are expected to reach 3.3 billion in 2014, up from just under 147 million in 2008. The rate of growth is lower than that for free downloads, which are forecast to expand at an annual pace of 88 percent in the same period, according to Ovum.

Meanwhile, personal computer makers Hewlett-Packard, Dell, Acer and Lenovo are also making inroads into the handset market.



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