Nokia's USB Modem strategy

At the tail end of 2008 I commented to Total Telecom that its move into the USB market with the CS-10 was not a very Nokia thing to do. It's a highly commoditised market with little opportunity for differentiation and some very tough competitors in Huawei and ZTE. As such it diverges from Nokia's recent focus on controlling the user experience as we've seen with initiatives such as Ovi.

I recently had the chance to discuss this with Nokia as part of my research for a forthcoming report on mobile broadband devices. The overwhelming sense I get of this move is that it is pragmatic. USB modems will represent a growth sector in a devices market that will struggle in 2009. Nokia has an opportunity to take a share of this segment and its scale and technology platforms mean that it can gain some market share.

However, it will take a lot to move into the territory to successfully and comprehensively occupied by the low-cost Chinese vendors. There is also an issue of perception. Speaking to a few operators, Nokia isn't even on their radar yet for supplying modems.

The best opportunity for Nokia will be in those markets where MNOs don't control device distribution and/or subsidies are banned, e.g. Belgium, Finland, Italy, Russia. Here Nokia can potentially make a virtue of its branding.

For details on the device spec click here.