Nokia Challenging BlackBerry-Maker RIM's Mobile E-mail Dominance

Nokia is looking to challenge BlackBerry-maker Research in Motion's dominance of the mobile e-mail market with its Ovi e-mail offering. Nokia's Ovi offering targets first-time e-mail users and offers a messaging service, which enables the user to combine many different e-mails into a cell phone. Both Nokia and RIM are now targeting consumers. In order to compete for enterprise users against RIM, Nokia has since partnered with Microsoft and IBM.

HELSINKI (Reuters) - Nokia is looking to challenge Blackberry-maker Research in Motion's (RIM) dominance in mobile e-mail as corporates cut spending amid economic slowdown and the market focus shifts toward retail consumers.

RIM created the market for mobile e-mail and its dominant position in the corporate sector has protected it from Nokia's attempts to crack the market in recent years.

But a Nokia executive told Reuters the firm was seeing a good take-up of its new messaging service aimed at consumers.

"Clearly, things are heading toward the consumer market and that's where Nokia has its strength," Tom Furlong, head of Nokia's consumer messaging services, said.

RIM has lately focused on developing its consumer offering.

Nokia -- which controls close to 40 percent of the global mobile phone market -- last month opened its Ovi e-mail offering, targeting first-time e-mail users, and a messaging service, which enables the user to combine many different e-mails into a cellphone.

"The service is up, people are utilizing it, we are getting good traction and good follow up," Furlong said, adding the company expects to announce its first revenue-sharing agreements with operators for the messaging service within few months.

"With the Nokia messaging service, we are going after consumers, we are not going head-to-head with enterprise e-mail. We are trying to put mobile e-mail to the masses, masses of people around the globe," he said.

Nokia dropped development of its own corporate e-mail product last year, choosing to partner with Microsoft and IBM instead while focusing on developing phones for business users to better challenge RIM.

"The rivalry now is as intense as it has ever been, with Microsoft and IBM on-board Nokia is now in position to take on RIM," CCS Insight analyst Geoff Blaber said.

Nokia says the two deals enable it to mobilize close to 90 percent of corporate e-mails without any extra investment from corporations.

"For Nokia the timing is perfect -- the economic climate is driving the message of costs," Blaber said.

When focusing on partnering with Microsoft and IBM for corporate mobile e-mail, Nokia last year dropped support for the BlackBerry e-mail service, but Furlong said Nokia users would in future be able to use the service again.

"We are in the interim period of time when we have dropped support ourselves, and BlackBerry is readying support for their service on Nokia devices," he said.

In the enterprise market, RIM has an almost unshakeable dominant position in North America because of its longstanding success and popularity with large corporate clients, Duncan Stewart, industry analyst at DSAM Consulting in Toronto, said.

"If you are the 80-90 percent market-share leader, which RIM is in North America, it's really difficult to break that stranglehold unless RIM stumbles. So far, any stumbles RIM has had have been on the consumer side, not the enterprise side."

In the consumer market, users are more flippant and tastes change, which may create an opening for Nokia handsets, he said.

"Could Nokia devices come in and take market share from RIM? Absolutely. On the other hand, it could go the other way around, too," Stewart said.

(Additional reporting by Wojtek Dabrowski in Toronto, Editing by Simon Jessop and Dan Lalor)

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