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Nokia's Rival to Apple's App Store Hits the U.S.

Nokia Ovi Store
Nokia today opened its mobile application store both here and overseas with an eye to stealing share from players like Apple -- despite initial reports of performance issues and confusion over availability in the U.S.

The world's top phone maker said the estimated 50 million Nokia (NYSE: NOK) phone owners can begin downloading apps, games, videos, podcasts, location-based services and more through their mobile browsers, courtesy of its new Ovi Store.

The Ovi Store consolidates Nokia's existing content services into a one-stop-shop for free and paid content. It also advances Nokia's vision for its larger array of mobile services, which it's also been marketing under the name Ovi -- the Finnish word for "door."

Despite frequent efforts to ramp up Ovi, it's thus far failed to gain the same traction as mobile services from Google, Yahoo and individual carriers' sites. In more recent months, as Apple's (NASDAQ: AAPL) iPhone has emerged on the scene as a dominant force in mobile apps, the device's App Store has also eclipsed Nokia's efforts, establishing itself as the player to beat in downloadable apps.

Complicating matters, however, is that the telecom giant's launch has not gone without glitches.

For one thing, No. 2 U.S. carrier AT&T said that it would be delaying rollout of full support for the Ovi Store -- including integrated charges on phone bills -- until later this year. For the time being, U.S. Nokia phone owners will be able to use their credit cards to buy mobile apps, but getting charges integrated with users' mobile phone bills will have to wait, Nokia spokespeople said in a blog post.

Additionally, users experienced problems reaching Ovi Store early today.

"Shortly after launching the Ovi Store at 2 am ET, we began experiencing extraordinarily high spikes of traffic that resulted in some performance issues for users accessing store.ovi.com and store.ovi.mobi," a Nokia spokesperson told InternetNews.com.

"We immediately began to address this issue by adding servers, which resulted in intermittent performance improvements," the spokesperson said. "We apologize for any inconvenience this may have caused Ovi Store users and encourage you to continue giving us feedback as we develop the service further."

Despite the problems, Nokia remains confident.

"Nokia has been in the app biz now for four years, but what the Ovi Store does is bring all of those services and functions under one umbrella," a Nokia spokesperson told InternetNews.com.

It's an important debut for Nokia. Smartphone applications are becoming increasingly popular, with everyone from mobile network operators to software developers to handset makers trying to cash in on the nascent yet lucrative market.

The phenomenon took off after the success of Apple App Store for the iPhone, which now has about 35,000 applications and more than a billion downloads.

[cob:Special_Report]BlackBerry maker Research in Motion answered by opening its own app store in April, while Google-backed Open Handset Alliance has one for its Android mobile open source platform. And expects soon expect Microsoft's mobile app store, with the Redmond software giant also looking to get in on the action.

And Nokia could use a big win from Ovi in the U.S. While the largest phone maker in the world still dominates global sales and overseas markets, Nokia fares far worse stateside, with most of the attention in smartphones today going to Apple's iPhone and Research In Motion's (NASDAQ: RIMM) BlackBerry devices.

One reason Nokia's U.S. sales are dismal compared to competitors is that until recently, it sold phones directly to customers without the marketing muscle and subsidies from mobile network operators -- which meant Nokia's prices hovered around the $400 mark for smartphones, while rivals' models are available more cheaply with a long-term contract.

Most recently, despite its strength overseas, Nokia reported bleak financial results for Q1.

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