Wither instant messaging (Nokia?)

Malcolm Murphy always has an interesting perspective on the mobile market. Nokia’s acquisition of OZ Communications really caught his attention — have a read…

– – – – –

If the price Nokia paid to acquire OZ Communications has been made public, I haven’t seen it anywhere. I’m incredibly curious to know, not least because I have a pretty good idea what OZ’s revenues were. We probably won’t know the price before MIR becomes a members-only club – for which many congratulations Ewan!

However, even without knowing how much Nokia paid, the fact that they bought a specialist mobile IM and email vendor suggests that they saw an opportunity that wasn’t being addressed. What I couldn’t work out at the time is whether they planned to carry on with OZ’s strategy of selling solutions to the operators, or use OZ’s technology to power Ovi messaging. Six months later, if Nokia’s actions are anything to go by, the answer is neither!

Since Nokia acquired OZ, they haven’t announced any new operator wins, and even in the run up to the acquisition they didn’t announce that much. Of course, there are other mobile IM providers, like Colibria and Neustar, who have been cranking out the press releases as usual, but I’m starting to think that mobile IM, as a standalone entity, isn’t ever going to happen. In theory, all of the UK operators have a mobile IM offering. Orange even mention theirs in their cinema adverts. But, a recent straw poll I took in operator shops suggests that, even when the sales staff do mention it, customers just don’t care.

Now compare that to SMS, which, according to the Mobile Data Association, went from strength to strength in 2008. Nearly 80 billion SMS sent in the UK. All that time and energy that operators spent worrying about Mobile IM cannibalising SMS revenue looks like wasted effort to me. People know SMS, they like SMS, and they continue to use SMS. Operator own-community instant messaging doesn’t seem to be adding much, and connecting the PC/internet messaging world with mobile seems to be something most of us can live without.

Now, is that because there wasn’t demand, or is that because the operators have spent the last five years spectacularly failing to bring anything useful to market? Probably a bit of both, but that’s not the point anymore. The point is that from where we look today, I don’t see a future for “mobile IM”.

So, if that’s the case, why did Nokia buy OZ? Because OZ will give them something that will enable them to shift a bucketload of handsets. The GSMA’s 2009 best handset award went to INQ for their INQ1 device, and there was an awful lot of excitement, rightly, about the Palm Pre. What both of these devices do, to a lesser or greater extent, is consolidate all the communication channels I have for my contacts, and present them in the way that makes sense for users: via the address book. I want to communicate with John, he is/isn’t online, I’ll call or send an appropriate format message. And that is what the next generation of handsets will do. The beauty of this is that the operator (still Nokia’s customer, don’t forget) can still remain in control of what services are available, or at least act as gateway and hence billing point. Whether the message is SMS, email, IM, IMPS or even Twitter just doesn’t matter.

Oh, and since most social networking stuff boils down to a message, as services like ping.fm have ably demonstrated, the ability to address facebook, and its inevitable successors, comes for free.

Mobile IM as we know it today is doomed, smart address books are the future, and that’s why Nokia bought OZ. For whatever the price was.

– – – – –

Thanks Malcolm!

You can read more of Malcolm at his personal blog: http://morenoise.blogspot.com.