May 26, 2009 / 7:32 AM / 9 years ago

Nokia opens App Store rival, response slow

HELSINKI (Reuters) - Nokia opened its online software and content store on Tuesday, hoping to follow the success of Apple Inc’s App Store, but the opening was overshadowed by technical glitches and negative reviews.

A test version of Nokia's new Ovi Store is seen in a picture taken in Helsinki May 14, 2009. Nokia on May 25, 2009 began rolling out its much-anticipated online software and content store, Ovi Store, as it aims to follow the success of Apple's App Store. REUTERS/Tarmo Virki

Apple’s store has proved extremely popular, with one billion applications downloaded in less than a year, and operators and technology firms including Vodafone, Microsoft Corp and Nokia now want a piece of the pie.

Nokia, the world’s largest handset maker, said its Ovi Store was opened globally to some 50 million phone users, putting it in front of any other rival store. Apple has sold only around 20 million iPhones.

Nokia said on Tuesday in most markets around the world consumers have to log on to an Internet page on their cellphone browser to access Ovi Store — something analysts said was bound to limit takeup significantly.

“The more steps you ask customers to go through, the more opportunities there are for them to step aside,” said Forrester analyst Charles Golvin.

Neil Mawston from Strategy Analytics said Nokia’s small market share in the United States was also set to limit takeup of the store. Nokia controls barely 10 percent of the U.S. phone market, while its global market share is above 35 percent.

To balance that Nokia hoped to offer U.S. clients the opportunity to charge applications on their phone bills from opening the store, something it expects to boost traffic. But it said on Tuesday this would be delayed until later in 2009.

Nokia said clients in eight countries can pay for purchases through their phone bills, and AT&T was planning to make the store available in the United States later in 2009.

The store is open globally through the Internet, and applications can be bought with credit cards.

“COMPLETE DISASTER”

Nokia said the store had technical problems on Tuesday, and on numerous occasions it was impossible to access it.

“Shortly after launching .... we began experiencing extraordinarily high spikes of traffic that resulted in some performance issues,” Nokia said in a statement.

Most first reviews of the service were negative, and a popular technology blog TechCrunch called the store “a complete disaster.”

John Strand, chief executive of Strand Consult, said the launch was a big failure.

“This launch today exposed Nokia as a dinosaur,” Strand said.

“They knew they would be benchmarked against Apple. They had all the time, all the resources, and then they came out with something like this. They are not fulfilling expectations. And what happened to the dinosaurs?”

Reporting by Tarmo Virki; Editing by Richard Chang

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