Friday, February 11, 2011

Nokia – King of Keys

Now that Nokia CEO Elop has chosen to back Microsoft's Windows Phone 7 platform the race is truly on. There are many pros about this arrangement, but I believe Nokia should add another key strategic element that will help it go beyond potentially being just an "as good" option. And I believe that this should be keys. Key management is a complex challenge for both large and small organizations and Nokia is ideally positioned to become the King of Keys.

Like Google's Nexus 2, it will not be long before Nokia phones start shipping with a built in technology called Near Field Communication (NFC). This is a short-range wireless communication technology standard that enables the exchange of data between devices over a short distance. This has many potential uses and one of them is keys.

Many of us nowadays are used to having some form of wireless electronic key for accessing organizational buildings, which often require the typing of an additional pin code. These two components can easily be built into a mobile phone with the added advantage of being able to issue and remove keys remotely.

Trials of NFC mobile keys are now starting to happen. For example, a Clarion Hotel in Stockholm has recently partnered with the mobile operator TeliaSonera and one of the world's biggest automated key companies ASSA ABLOY to test replacing keys with mobiles. ASSA ABLOY has developed software that can issue hotel keys before guests arrive and they can even leave without having to physically check-out. This could also be used for guests coming to visit corporate buildings. ASSA ABLOY is a Nordic company (with half Finnish roots) and my advice is that Nokia should go and talk with them – if they are not already.

Nokia's strengths have, over the years, been more around engineering and this service is all about technology; and the pin codes would be entered through a standard number pad. So it would be a match made in heaven. A Qualcommm representative told me that there are still challenges with varying standards around NFC, but this would play to Nokia's advantage, since they still have the leverage to enforce a worldwide standard related to NFC keys.

Also the combination of Microsoft's business credentials would work well with organizations looking for a solid key issuing system. A Nokia executive a few months back (at a party) was not initially enthusiastic about this King of Keys idea, since he said that the direct to business sales is a relatively small part of their operations – but then immediately his eyes lit up and he said that he would definitely consider it.

This is an open market and Nokia should act quickly to claim the space.

4 comments:

Olli said...

Great post, funny thing is that Nokia introduced nfc capable phone 5 years ago (could be even earlier!), let me introduce the 6131: http://www.nokia.fi/tuotteet/kaikki-puhelimet/nokia-6131-nfc . So there's know-how already (hopefully still), maybe market and consumers are this time more mature.

Olli said...

Here's interesting post (and link to 170 page report) about NFC business modells and it's challenges http://www.readwriteweb.com/mobile/2011/02/report-examines-nfc-business-models-and-challenges.php

Richard said...

Thanks Olli for those references. One of Nokia's "problems" seems to have been trying to do things too far ahead of the market.

When you research NFC you might have noticed that the focus is all on mobile payments – relatively little about keys. There is still space in the mobile payments market for Nokia; however, currently the operators seem to be capturing the markets. For example, the UK operators Orange/T-mobile and Barclays Bank are rolling out contactless payment.

http://www.foxbusiness.com/markets/2011/01/26/barclays-launch-new-mobile-payment-service/

And in Kenya, Safaricom's Vodaphone supported M-PESA mobile payment system has over 2 million daily transactions alone in 2009, and mobile banking is much more advanced in Japan with big players like NTT DoCoMo setting the standards.

Robert said...

Yeah, as Olli noted, NFC was trialled at Nokia at least 5 years ago.

The idea of using your phone as a "keyring" is much older still and some proof-of-concepts were developed (at Nokia) 10-11 years ago.

The idea remains as attractive (or not) today and surely NFC is a nice technology to implement it. As far as I can see at least 2 things need to be done to make it successful:

1) Develop the concept with some high-profile, attention grabbing, partner that has locks. The thing that the partner offers much be so attractive that you'll want to buy a new phone just to get to use those locks.

2) Standardize, publish and open source the technology.

3) Set up a service for "I lost my keys, err, my phone."