Nokia is bulking up its communications platform with the acquisition of Oz Communications, a privately held, Montreal-based company that offers mobile email and instant messaging.
On Tuesday, Nokia said it would buy Oz for an undisclosed amount, bringing Oz into its services and software unit. The deal is expected to close in the fourth quarter.
Oz has existed for approximately five years. The company, which has been working with Nokia since 2003, has raised more than $71m (£40m). Its instant messaging, email and social-networking technologies are used by several US mobile operators, including Verizon Wireless, Sprint Nextel, T-Mobile USA, Alltel and Rogers Wireless. With just 220 employees, Oz claims to have 5.5 million monthly paid users using its products.
The acquisition fits in with other mobile social-media and communication purchases made by Nokia over the past couple of years, including those of Twango, Plazes, Enpocket and Navteq.
With these acquisitions, Nokia has been amassing a portfolio that extends far beyond handsets. The company is looking to extend its reach into services and applications, integrating devices with services and packing them with features such as navigation, mapping and music. The idea is that the services will help differentiate the handsets from others on the market and also provide the company with additional revenue.
Nokia is still in the early days of executing on this strategy. The company just officially launched its Ovi platform, which serves as a hub for many of its services.
The company leads the market, in terms of handset sales, worldwide. However, it is relatively weak in the US, where some of these more advanced services may be received well.
Meanwhile, Nokia is facing competition from new entrants in the mobile market, such as Apple, with the iPhone, and Google, with the Android operating system. These companies are also emphasising services and applications as way to differentiate their products.
Apple launched the App Store earlier this year, when it released the new iPhone 3G. The first Google Android phone will go on sale next month on T-Mobile USA's network. Like Apple's App store, Android also has a marketplace in which third-party developers can distribute applications for Android phones.
