Nokia is making its navigation service free to all GPS-enabled Nokia devices in a move that will help the company better compete in the smartphone market against the likes of Apple and Google.

Starting Thursday, Nokia users will be able to download for free the client that enables GPS phones to get Ovi Maps and Navigation, as well as, various city guides on their phones. Nokia has been offering the maps and navigation service for more than two years. After its acquisition of Navteq announced in 2007, it enhanced the service by adding turn-by-turn pedestrian navigation. And it added premium content from partners, such as Lonely Planet.

Previously, customers could only access the basic maps for free. Turn-by-turn navigation and city guides had cost extra.

But that all changes Thursday when Nokia begins offering these services for free. Initially, the free service will be available for 10 of Nokia's phones, including the Nokia N97 mini, Nokia 5800 XpressMusic and Nokia E72. Eventually, the software client will be available for all Nokia GPS-enabled phones. And starting in March, the company will begin shipping new GPS Nokia phones with the software and maps for the service pre-installed.

Taking mobile navigation to the mass market
Personal navigation devices, such as ones made by Garmin and TomTom, have become big hits with consumers. And now personal navigation is gaining popularity in mobile phones, thanks to GPS-enabled handsets, and applications such as Google Maps. Approximately 27 million people worldwide had GPS navigation on their mobile phones at the end of 2009, according to the research firm Canalys. Nokia estimates that by offering the service free on its phones it can boost that figure to 50 million.

"We think this will transform the mobile navigation market overnight by providing consumers with an out-of-the-box experience," said Tero Ojanper?, executive vice president of services for Nokia. "I'll admit it wasn't the easiest process getting this service in the past. But now we're moving from the early market to the mass market."

While Nokia still leads the world in overall cell phone sales, it's been losing ground over the past couple of years to new competitors such as Apple and Research In Motion in the high-end smartphone market. Competition will likely intensify in 2010 and beyond as manufacturers flood the market with a steady stream of new smartphones using the Google Android operating system.

Consumers are attracted to the new breed of smartphones, because of all the mobile applications that can run on these devices. Maps and Navigation powered by Google are key applications on these devices.

Taking on Google
Nokia sees personal navigation and location services as a major differentiator, setting its phones apart from its competitors and adding value for wireless operators. Specifically, Nokia executives believe that its mapping and navigation services are superior to Google's own Google Maps and Google Navigation, which are preloaded and offered for free on many popular handsets, such as the iPhone, the Motorola Droid, and Google's own NexusOne.

For example, Nokia's Ovi Map service offers navigation in 74 countries in 46 languages. And it can provide traffic information in more than 10 countries, as well as detailed maps for more than 180 countries.

Ojanper? said that creating and maintaining a dynamic mapping and navigation service is not easy. He said the company is continually updating its mapping content and it specifically looks at 250 different attributes to collect data using cars driving around various cities around the world to verify information is correct.

"Google offers free car navigation in one country," he said. "We offer it in 74 countries. We are truly global where others are not."

Another important differentiator for Nokia is the free access to the Lonely Planet Travel guides.

But Ojanper? also said that Nokia's service is better for wireless operators because the service and application consumes far less bandwidth than competing mapping navigation services, such as Google Maps and Google Navigation.

Ojanper? said that the technology Nokia uses to serve up its maps is 10 times more network efficient than Google's method. Nokia uses what's called a hybrid vectorizing mapping method, which allows users to zoom in and out of the map without downloading the same map multiple times. By contrast, Ojanper? said that Google's technology requires that a new map be downloaded each time a user zooms in or out of the map, which increases the amount of bandwidth needed to use the service.

For this reason, Ojanper? said he believes that wireless operators will want to work with Nokia to sell its phones and make the Ovi services available on their networks.

This sales pitch could be particularly useful in the U.S., where Nokia has a weak presence and only offers a handful of devices with subsidized price tags through a wireless operator. For several years, Nokia has sold most of its high-end phones in the U.S. directly to consumers. But in a market where someone can get an iPhone subsidized by a carrier for $99, it's difficult to sell a $500 unsubsidized phone.

That said, the new free mapping and navigation services could finally give wireless operators a reason to sell Nokia phones. It could also give consumers a reason to buy a Nokia phone, even without a subsidy. A personal navigation device can cost between $200 and $300, which makes a $500 unsubsidized Nokia phone look pretty good.

Ojanper? said Nokia plans to continue selling its phone directly to consumers but its primary focus will be to target wireless carriers in U.S. market.

Regardless of which channels Nokia chooses to sell the phone, one thing is certain. The company will have to spend some money marketing Ovi Maps and Navigation to the mass market. At this point, anyone with a computer is familiar with Google and is likely familiar with Google Maps.

Nokia's Navteq and Ovi brands are relatively unknown in the U.S., so the company has a lot of work ahead of it.


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