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 and,” a Nokia spokesperson told

“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

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.

Page 2: Aggressive moves

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Nokia, however, is showing aggressive signs of fighting back. The company hinted that it may start selling branded phones later in the year, and AT&T (NYSE: T) recently became the first U.S. carrier to subsidize one of Nokia’s smartphones — the Nokia E71x, available for $99 with the standard commitment of a two-year contract.

And despite the initial stumbles with Ovi Store, Nokia is making it clear that it’s serious about competing in earnest in mobile apps.

In available countries, customers can update their devices with the Ovi Store mobile application by selecting the Ovi Store icon in the Download folder on their device. The mobile client is available in English, German, Italian, Russian, and Spanish and supports operator billing in Australia, Germany, Ireland, Italy, Russia, Singapore, Spain and the United Kingdom. Globally, credit card billing is available through the mobile application and the mobile Web site.

Additional countries, languages, devices and features will be added throughout the year. AT&T plans to make Ovi Store available to its customers in the United States later this year.

Meanwhile, content providers and application developers can continue to sign up to distribute their content through Ovi Store by visiting

“Ovi Store is open for business and we’ve stocked the shelves with both local and global content for a broad range of Nokia devices,” said Tero Ojanperä, executive vice president of Nokia services, in a statement. “Ovi Store makes shopping for content and applications easy and fun for feature phone and smartphone owners alike.”

Glitches aside, at least one analyst predicts Nokia is on the right path to success.

“They are looking to get back into the U.S. market, and the store is a way to do that, as is making a big bet on services, mobile maps, music. Despite the technical difficulties, I’m sure that Nokia’s app store will survive and prosper,” William Stofega, a mobile analyst at IDC, told

In fact, he said the downtime reported earlier today is a reminder that Nokia is dominant in foreign markets.

“Server congestion at launch, if that’s all this is, is not uncommon — and actually not a bad problem in a way. Nobody wants performance issues, but it shows that there’s a ready and willing audience,” he said. “Nokia is world-facing, not only in mature markets but developing ones too, and despite their problems here, ultimately that is going to give them huge advantages in the long run, so it will be interesting to see what happens.”

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