Nokia buys Oz

Oz appears to be the first of those initial investments, supplying Nokia with a consumer e-mail platform to replace its more robust, behind-the-firewall Intellisync platform. Oz provides handset client and server software that extends some of the most common IM and Webmail platforms to the mobile handset. In recent years, Oz has seen its customer base boom and its primary business shift from IM to e-mail, as Research In Motion’s BlackBerry e-mail services have driven demand for a consumer e-mail equivalent. It now counts among its operator customers: 3 Scandinavia, Alltel, AT&T, Bell Mobility, Boost Mobile, Dobson, Motorola, Nokia, Orange, Rogers Wireless, Sprint Nextel, TDC, Telefónica, Telenor, TeliaSonera, Telus Mobility, T-Mobile, Verizon Wireless and Virgin Mobile.

The Oz client supports AOL’s IM and e-mail, Gmail, ICQ, Windows Live Hotmail and Messenger, and Yahoo! Mail and Messenger, which as a group handle the majority of Web-based e-mail and IM communications in North America. Oz now counts 5.5 million paid subscribers.

Since its purchase of Intellisync in 2005, Nokia’s e-mail strategy had focused on high-end devices for the enterprise and power-user segments, centering on its Eseries and Nseries S60 smartphones. Despite that focus, companies such as Microsoft and RIM began taking market share from Nokia in the critical push e-mail segment, despite Nokia’s dominance in the overall smartphone market. The Oz client is tailor-made for mid-range and feature phones and could be embedded into all but the most basic S40 phones. Though Nokia didn’t reveal its specific plans for Oz, its technology will likely fit into Nokia’s new Ovi services strategy. Ovi provides a direct link between Nokia mobile phones and Web services, making Web-based e-mail and IM ideal candidates for such cross-platform applications.

Oz is the latest of many acquisitions Nokia has made in the last three years, as it has shifted from a hardware-only vendor to a more service-based company. And as with its other acquisitions, Nokia may raise concerns not only from its competitors, but its customers. Oz not only sold its solution directly to operators, but it worked with LG Electronics, Motorola, Samsung and Sony Ericsson to have its client pre-loaded into many of their devices. Likewise, operators are wary of Nokia’s services strategy — some viewing it as a threat to their own portal and data services. Nokia said it will honor Oz’s commitments to manufacturers and maintain its relationships with carriers.