Nokia loses face of Ovi, may gain Dopplr and even Palm
Published: 24 September, 2009
Nokia has lost the face of its software business, but continues its hunt for start-ups in key web services areas to bolster its fledgling Ovi strategy. Meanwhile, larger acquisition rumors swirl in its hardware heartland - does it really have its eye on Palm this time?
Not exactly an original piece of speculation - Nokia has been lined up as a Palm bidder many times before, given the logic of the Finnish giant's need to accelerate its hesitant efforts to gain US market share. The Pre would be virtually invisible in Nokia's sales figures in its own right, but the larger firm could get a few sideline benefits too - a brand that is still strong in another Nokia growth target, the enterprise (though this advantage is probably diminishing over time); and possibly some smarts in Linux/web services, to apply to the Maemo and even open Symbian efforts.
Whether the rumored talks are real or not, Palm's shares jumped to a two-year high of $17.50 based on the speculation - though Reuters reports also cited Dell, Hewlett-Packard, Cisco and Motorola as rumored candidates. The first two would clearly see Palm as a boost to their faltering smartphone efforts, and one with experience in their enterprise and Windows homelands. Cisco has been expected in some circles to enter the device market in order to gain end-to-end control of the IP enterprise and home, focusing on smartphones and MIDs that would drive mobile data usage. As for Motorola, it may need to extend its range, but taking on a struggling handset with a different OS, at a time when the larger vendor is far from delivering on its own turnaround, would seem suicidal.
Analysts claim Palm would go for over $3bn, which might prove too steep for Nokia, given the marginal gains in share and product range - and the Finn has been insistent lately that it would concentrate on small purchases rather than big ticket buys like Navteq. One of these seems to be Dopplr, a company in one of the hottest areas of the mobile web, social location and travel.
TechCrunch reports that Nokia has paid between $15m and $22m for the UK start-up, gaining a new set of services and some expertise. Dopplr has a fairly small, but enthusiastic, user base and Nokia could offer an integrated mobile version of the app on its handsets, as part of the Ovi family, as well as giving it greater exposure in a crowded sector that also includes TripIt and others.
At this transitional time for Nokia, which is seeking to reinvent itself as a web services giant, it was a bad moment to lose Benoit Schillings, who has been the high profile, and highly articulate, face of the software strategy. Schillings, Nokia's chief technologist and personal technology adviser to CEO Olli-Pekka Kallasvuo, has left for Swiss mobile software house Myriad Group, leading to inevitable talk that he was frustrated with the progress of Nokia's web transformation.
Myriad was created from the merger of Esmertec and Purple Labs and its first half revenue this year was $62.7m, up 215% year-on-year on a pro forma basis.
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