U.S. carriers not keen on Nokia's Ovi Store

When Nokia's Ovi Store for mobile applications arrives in the U.S., carriers don't plan to offer their billing support.

(Credit: Nokia)

Nokia has run into yet another potential hurdle in trying to crack the U.S. market.

The company revealed on Wednesday that its Ovi Store will not have the billing support of U.S. carriers when it launches next month, according to Reuters. Nokia's take on the modern mobile-application store will have the support of carriers in eight countries at launch, but executives had hoped to add the U.S. to that list earlier this year.

Therefore, Nokia users who want to purchase applications from the Ovi Store will have to use a credit card. That's theoretically not a big deal, assuming that Nokia plans on using a system that allows you to store payment information; typing in a 16-digit credit card number and expiration date each time you need to make a small purchase is obviously not that convenient.

The thing is, it's not clear how Nokia plans to handle payments done with a credit card. For example, Research In Motion is using PayPal for its BlackBerry App World, and Google uses Google Checkout for the Android Market.

And one of the big advantages Apple had with the App Store was a well-honed micropayment-processing system in the iTunes Store that was familiar to iPhone users. Setting up a system that can scale as demand grows is no small undertaking, and for that reason, as well as user preference, many companies offering mobile operating systems--including RIM and Microsoft--plan to enlist carrier partners to let charges for application downloads appear on their monthly bill.

Nokia has its own music store, but it's had trouble getting that off the ground in the United Kingdom as a subscription business, and it's not clear how many individual tracks have been sold. That means that the company has yet to really establish a billing relationship with its customers in Europe, let alone the United States.

And that's why carrier support was considered an important part of Ovi Store's chances. But U.S. carriers are busy chasing other alternatives, such as Apple's flirtations with AT&T and Verizon Wireless, Microsoft's plans for a Windows Marketplace for Mobile that involves the carriers, and perhaps their own stores.

With carrier support and strong recognition in Europe, Nokia has a chance to put its own stamp on the new era of mobile applications. But when it comes to figuring out how to expand across the pond, Nokia is still looking for help.

[Mark_Anderson]

This was never going to happen for Nokia given their poor relationship with the US carriers.

Fortunately the US is such a minor market for Nokia that it doesn't really make a difference.

[Mark_Anderson]

Oh yeah, you're wrong about the carrier billing too - Nokia have done this for years with N-gage using text biling.

[Synthmeister]

Then why can't they set up an iTunes type store independent of the carriers? Wouldn't that be in their best interest anyways? A store accessible from the phone, the computer, wifi or whatever. I would think they would want to be completely independent of the carriers if at all possible.

I just find it amazing that no one seems able to copy the iTunes concept. I mean having to use PayPal for the RIM store? You've got to be kidding me. Or the fact that iTunes completely bypasses any and all browsers. One more way to marginalize Microsoft. It's absolutely brilliant.

Remember when Apple introduced the iTunes store, Steve Jobs, said something to the effect that people weren't just going to be able to waltz in and copy it. It was more complicated than it looks. I thought he was nuts. I'm amazed the MS doesn't build their own store completely independent of the carriers. Why give the telcos a piece of the action when you don't have to?

[monkeyfun14]

iTunes store is really not that hard to copy.

Zune marketplace is pretty much the same in a prettier shell.

What these other companies are doing idk..

[jypeterson]

@Synthmeister -- so true. If iTunes was so easy to duplcate, it would have been done by now.

The phone manufacturers are going down the wrong paths with all of this. Paypal, credit cards, blah, blah, blah -- and now the Ovi store wants to have the carriers bill the customer in their monthly statements? One of the most genius parts of the iTunes ecosystem is the fact that your total monthly iPhone expenses are not staring back at you when you get your AT&T bill. If this was the case, you wouldn't have seen the billionth application downloaded last week.

Ovi will continue to be dead in the water on the consumer side. I don't want to see how much more my phone is costing me on a monthly basis by seeing how much I am spending on applications + my service fees. The average consumer will say, "My plan is $70/month + spending another $50/month on apps = $120 phone bill! I will just cut back on my app purchases."

Can you see what I'm saying???

Now, you can see why Apple can't be duplicated. Other companies just don't get the consumer.

[ikramerica--2008]

Yes, Apple smartly lets you download a few things, and gives you the bill (already paid for, of course) a few days later. So you don't have to "checkout" all the time, and you don't realize how much you are spending. $.30 here for a + upgrade, $.99 cents there for an app, it adds up, but you don't see the full bill right away, so you don't scrutinize it as much...

[forever4now]

What happens when you have operator billing & you change operators? If I have an iPhone & it is lost or stolen, I should not have to repurchase all the apps I bought previously, when I get a replacement iPhone. If I changed operators, in the mean time, would the new operator let me download them for free?

I understand the operator's desire to profit as the middleman, but the operator billing model would be akin to being billed by my ADSL provider, when I buy an app for my PC.