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Yesterday, the mobile market leader said it would begin giving away turn-by-turn navigation services based largely on technology acquired in an $8.1 billion deal for NAVTEQ in 2007.
"Why have multiple devices that work in only one country or region? Put it all together, make it free, make it global and you almost double the potential size of the mobile navigation market," said Nokia Executive Vice President Anssi Vanjoki in a press release.
This isn't a cheap stunt. According to the Nokia observers at the website AllAboutSymbian.com, Ovi Maps was costing users a yearly fee of 50 British pounds per region in Europe, with additional charges for traffic information. That revenue is now history.
Interestingly, these are the same analysts who in November called on Nokia to distribute Ovi Maps freely in response to Google. The Big G introduced turn-by-turn navigation in Motorola's (NYSE: MOT ) Droid smartphone, which uses the Android operating system.
As AllAboutSymbian.com writer Steve Litchfield put it at the time:
By this time next year, Nokia's Ovi Maps might find itself with a direct competitor which is absolutely free. And which, if we're all honest, has much better underlying sources of points of interest and is much better at finding things in the real world.
No need to wait till November, Steve. Nokia's taken your advice, which means it just got harder for this hardware and handset maker to diversify into higher-margin mobile services. Investors can't be pleased.
Free works for Google, because what The Big G offers for free, someone else pays for -- advertisers, specifically. Nokia doesn't have this cushion, nor does Research In Motion (Nasdaq: RIMM ) . Apple (Nasdaq: AAPL ) bought help when it acquired the Quattro Wireless ad network, but it's still a hardware company.
This strategy only works if Nokia's smartphones outduel alternatives. Specifically: the BlackBerry, the iPhone, Palm's (Nasdaq: PALM ) Pre, and in Asia, well-designed handsets from Samsung and LG, among others.
Now it's your turn to weigh in. Does giving away Ovi Maps give Nokia a competitive advantage? Or is it a desperate move by a desperate company? Make your voice heard using the comments box below.