Derrick Hsiou Howard Kupferman MG 4504 March 27, 13 Case Analysis: Nokia and MIT’s Project Oxygen Introduction Nokia

is uncertain about the economic implications of an Oxygen future. An oxygen future implies a significant investment into the Oxygen project pursued by researchers at MIT and sponsors like HP and Delta. Further more, project Oxygen is an initiative to leverage Internet ubiquity to provide comprehensive, human-centered service to boost human productivity. Project Oxygen seeks to bring abundant computation and communication, as pervasive and free as air, naturally into people lives. In order for such a feat to be accomplished, multiple parties in the wireless value chain like network infrastructure equipment, device hardware, device software, and network operations are intricately involved and dependent upon one another. The ultimate decision is to decide whether or not Nokia should focus its long-term research & development and competitive strategy around future integration with Project Oxygen. Analysis There are several factors of this case that must be covered and analyzed in order to fully understand the problem being presented:  First, I will present what factors are needed for Project Oxygen to be accomplished and determine where value would reside in the new value chains  Next, I will focus on Nokia’s background and how the company is positioned to support or not support Project Oxygen.  Finally, I will analyze how Nokia will capture that value Project Oxygen Project Oxygen envisions a world where connectivity was ubiquitous. This project enables human-centered computing through a combination of specific user and system technologies. Individualized knowledge access, automation, and collaboration technologies help humans perform a variety of tasks to boost productivity. The system would utilize three components: handheld terminals (H21’s), computers embedded in the environment (E21’s), and dynamically configured networks (N21’s). H21’s enable humans to communicate wherever they are. E21’s extend the range of our connectivity be being embedded into our homes, offices and cars. N21’s help machines locate each other as well as the people, services, and resources needed. With the system, users would be able to interact with “anonymous devices” – a device that is not being used which can recognize a user and load their personal data – interfacing with speech and vision, as if were talking with another human. The entire operations of such Oxygen requires all parts to be integrated, using similar protocols in a highly adaptable environment. As stated, there are multiple device, network, and software technologies needed to make this project a reality and this is where the value resides. All factors of this system must be highly scalable for widespread usage and adaptable to different regions and protocols. It is highly ambitious and out of reason for any single party to take on all

Nokia continued down this road to be a key player in mobile ecosystem by establishing mobile industry standards among others. Nokia’s Background Nokia was famous for its ability to reinvent itself from a paper mill to an electronics company constantly adapting to survive. Nokia has truly proven itself to be the leading advocate and developer toward mobile Internet convergence. which was largely developed by Nokia. Ollila predicted that the growth of the industry was dependent on the establishment of valuable and affordable services paired with high penetration. and Telekomia Oy (Nokia Telecommunications Division). easy-to-use phones to the market. These initiatives were not only backed by heavy capital investments. sleek. CEO Jorma Ollila positioned Nokia to become the global leader in mobile Internet convergence investing heavily in both hardware and software technologies. Protocols like GSM (Global System for Mobile Communication). providing assistance and incentives to mobile app developers. If mobile and . Nokia was able to bring small. With that said. I believe that Nokia is positioned as an irreplaceable player in Project Oxygen’s longevity and success. were created which would become the future of the corporation. Nokia became a globally recognized brand because it was the first handset designer to understand that mobile phones could serve as an extension of one’s identity. the two business units Mobira Oy (Nokia Mobile Division). Nokia was developing hardware and software to support high bandwidth and more sophisticated end-user services. As a top competitor in three of the four parties involved in the wireless value chain. mass appeal and usage. Through numerous acquisitions and engineering endeavors. To make this possible. that is why multiple key sponsors are involved in playing their specific roles in this future Oxygen ecosystem. Ollila was a visionary and spoke about the inevitable merger of mobile devices and the Internet called IP Convergence. encouraging the establishment of seamless roaming agreements and providing assistance and incentives to computer hardware and software market to build mobile capabilities. Nokia’s Positioning In addition to driving a market of common. The chain of activities gives the products more added value than the sum of the independent activities of this project. Nokia has picked up on this early on and positioned itself as an influencer and backbone to the entire system. Nokia pushed for services to be built on a common platform utilizing open standards. Nokia can aggressively push a philosophy of cooperation in infrastructure and protocols to work openly and use coherent standards. This brand image to connect people boosted Nokia’s image and revenues in the early 2000’s to attain 40% of worldwide market share. At this time. but also heavy human capital investments. Such an open environment would allow all devices and networks to work seamlessly allowing the user to move from location to location without loosing Oxygen. Through numerous strategic decisions. All of Nokia’s actions are directed to build an environment where all parties would cooperate in the competitive environment to bring the best devices. services and ultimate experience to the users. Miscommunications or disagreements among the parties could significantly set back the project wasting precious research and development resources and valuable time. open standards protocols. would become the dominant mobile transmission protocol for several years to come.

Nokia is in a strong position to manage the entire value chain because it knows all of the players involved. mass appeal and usage. providing Oxygen to all humans and capturing value with every breath. . As stated earlier. Nokia can push to drive down costs. Nokia has positioned itself to profit hugely from pushing for a more ubiquitous Internet.Internet converge progress possibly to what Project Oxygen envisions. the growth of the industry was dependent on the establishment of valuable and affordable services paired with high penetration. Nokia will indubitably succeed. Nokia captures value by selling its device hardware and device software as well as the network infrastructure equipment that it operates on. Using it prowess. In conclusion.

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