Nokia could possibly level the mobile application playing field with the launch of the Ovi Store, its obvious response to Apple's App Store.

Ovi Store by Nokia is available globally to an estimated 50 million Nokia device owners across more than 50 Nokia devices, including the forthcoming N97. AT&T plans to make Ovi Store available to its customers in the United States later this year, which Nokia hopes will help it make inroads into the U.S. market.

"In North America, Nokia has a very small share of the handset market relative to what it has in Europe, and Nokia faces multiple challenges in the U.S. market," said Ian Fogg, London-based principal analyst for Forrester Research. "The Ovi Store could help, but a lot depends on how it's perceived by U.S. carriers.

"In many countries, Nokia integrates more closely with the operator billing model, which is what operators want," he said. "Nokia has gone further in that direction than many competitors, as Apple requires an iTunes account and RIM encourages the use of PayPal.

"Initially, Nokia doesn't have mobile operator billing live in the U.S."

Nokia is the world's No. 1 manufacturer of mobile devices by global market share. It provides digital map information through Navteq and equipment and services for communications networks through Nokia Siemens Networks.

Customers can visit http://store.ovi.com through their Nokia device browser to begin personalizing their devices by downloading applications, games, videos, podcasts and productivity tools, as well as Web and location-based services much more.

Apple's App Store has been out for a year, which is a long time compared to other app stores for devices like RIM's BlackBerry and Google's Android. Microsoft's Windows Marketplace for Mobile has yet to launch.

"Not all of these app stores are live, and some have only been live for a short period of time, so we're not comparing apples to apples, because each has a different level of maturity, and each of these different app stores has different challenges," Mr. Fogg said.

"Nokia has an incredibly large install base of devices, both in terms of sheer volume of users and the number of devices," he said. "In contrast, Apple has the advantage of a very homogenous, uniform platform to target, while RIM is somewhere in between."

While its situation is unique in that it is strong in Europe but less so in the U.S., Nokia faces the same challenges that device manufacturers and mobile software developers have been dealing with for some time.

"When Nokia announced the Ovi Store two or three years ago, there was a little push back from many people in the industry who thought that Nokia was trying to go around the operator, but the reality is, Nokia is playing exactly same balancing act that RIM, Microsoft and Apple are playing," Mr. Fogg said.

"These app stores have to ensure that the customer has the best experience, that app developers reach the biggest addressable market and have the ability to generate revenue, while at the same time create something that helps operators acquire customers and generate revenue from customers," he said.

Because all of these devices in the major markets are subsidized by carriers, all of these app store players have to balance what the carriers want with the best interests of consumers.

While mobile applications have been around for some time, the challenge has been distribution -- getting those apps installed on mobile devices. The next step is monetization.

"Apple demonstrated terrific execution by making it easy to get apps distributed to end users, and many players are launching app stores because they realize that's essential for distribution," Mr. Fogg said. "These app stores provide a great easy way to distribute apps.

"In Apple's App Store, business models are essentially free and ad-supported or pay for the app, and Apple will enable in-app purchasing over the next few months, which will open up some new business models," he said.

Currently, various monetization strategies are competing for dominance, with ad-support in the mix. Pricing is still being worked out, as well (see story).

"In Apple there is tremendous pressure to keep prices of paid applications low, and if there is an alternative way of monetizing that app to keep price low or free, such as mobile advertising, that's tremendously attractive," Mr. Fogg said.

"RIM's app store is set up to discourage a downward pressure on app prices, which means the opportunity for different business models, including ad-supported, is perhaps not quite as great," he said. "The big thing is that all of these app stores are evolving a lot, none are mature platforms with definite long-term business models that will necessarily continue."

Apple's App Store will go through big changes with the release of iPhone version 3 software, Microsoft's Windows Marketplace for Mobile hasn't even launched yet and Palm has not announced plans for an app store.

Many brands are experimenting with different ways to take advantage of the popularity of mobile applications.

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 carrier billing in Australia, Germany, Ireland, Italy, Russia, Singapore, Spain and Britain.

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.

Ovi Store is an evolving media service that consolidates Nokia's existing content services into a one-stop-shop for free and paid content.

Thousands of content providers and independent application developers are distributing their media, applications and games through Ovi Store.

"As far as in-app advertising and launching their own apps, there is a learning curve for brands, which will be ongoing for 18 months at least," Mr. Fogg said.

"Nokia closer to Apple and Android in terms of pricing, but there seems to be greater variety of pricing," he said. "There are definitely apps at $20 price points in there, and there may be good opportunities for marketers, but it is still very early days."

Nokia's take
Andrew Flowers, spokesman for Nokia, provided his perspective on the Ovi Store:

What is the strategy behind Nokia's distribution model for mobile applications?
The Ovi Store is about global scale and reach. This is not an exclusive boutique for a single device only. Within the first 24 hours of the Ovi Store opening we had registrations from users 131 countries right about the globe! And we have now increased the numbe of compatible Nokia devices to 60.

Will Nokia's monetization strategy be focused on pay-per-download, subscriptions, ad support or some combination of those?
Nokia's Ovi services monetization model is a combination of device bundles, pay-per download, subscription and ad enabled. Currently the Ovi Store exists to provide consumers with free and paid content and allows for content providers and developers to distribute that content to millions of Nokia devices. Ovi Store offers a very competitive and industry standed 70/30 split between content publisher and Nokia.

How will Ovi help Nokia make inroads into the U.S. market?
As we said on Monday, AT&T plans to make Ovi Store available to its customers in the United States later this year, including support for carrier billing. Naturally we're very excited about this.

What opportunities does the growing popularity of mobile applications offer for mobile marketers/advertisers?
Ovi Store by Nokia is available globally to an estimated 50 million Nokia device owners across more than 50 Nokia devices making Ovi Store a very compelling channel to developers and content publishers to enhance their service offering, brand, etcetera, by publishing interesting content in the Ovi Store.