Now here's some interesting news. In a fascinating interview with MobileToday, Nokia's UK MD Simon Ainslie has been talking about the company's long term strategy, and explaining its purchase of seemingly non-mobile phone related companies such as Navteq.

In the interview, Ainslie talks of Nokia becoming "a Web 2.0 company, and no longer just a device company," and effectively doing what Nintendo did with the video game market with the Wii: completely changing the rules of the game on its own terms.

More info after the jump.

Nokia released some stunning devices in 2007, and had some major hits on its hands. The Nokia N95, for example, was nothing less than a technological marvel, and sold over 1,000,000 units in the UK alone. All this came as the mobile Web finally became a reality (at least outside the US), with fixed rate cheap data tariffs becoming available, and HSDPA finally making data transfer speeds acceptable.

Even the network operators finally tore down their walled gardens, making the mobile Web completely accessible.

Nokia recognized this trend, and are keen to capitalize it. They also noticed two other factors at play.

Diminishing returns

The first is the fact that there's only so much technology you can pack into such a small space. We have camera phones, video phones, GPS phones, and smartphones, and, in the case of the N95 and E90, all four in one device!

What else can you pack into a mobile phone and still get any use out of it?

This is just the dilemma Nintendo faced when competing in the video game market. Games consoles were becoming more and more sophisticated as graphics technology improved, but there's only so much improvement you can make before the next generation stops being a revolution and starts to become an evolution - in other words, more of the same, just prettier.

Equally, just as the feature list of new mobile phones was starting to run out of steam, with new features no longer being enough of a unique selling point as they once were, Samsung and LG were intent on driving down the cost of mobile phones to such a level, that profits would take a hit.

With lower profits and less to differentiate their phones from the competition, Nokia had to change direction.

A disruption in the marketplace

And then, there was the small matter of the disruptive technology known as the iPhone, the features of which weren't as good as Nokia's flagship N-Series phones, but its user interface was light years ahead.

Suddenly, mad do-it-all wonder phones were no longer enough. The device had to connect with the user in an intuitive and innovative way. It had to offer more than just taking pictures or downloading music. A new unique selling point was needed.

Nokia 2.0

Just as Nintendo reshaped the video game industry by leaving the high resolution graphical arms race that had previously defined the market, and focusing instead on a completely novel way of interacting with games, so Nokia is intending to reshape the mobile phone market by becoming more than just a maker of mobile phones.

It wants to be a Web 2.0 company.

More specifically, according to Ainslie, "To maintain our margins and maintain the best experience for users, you’ve got to move out of hardware and into experience. We can’t remain a devices business. We have to take leadership here by growing the market for everyone in our supply chain."

This means a renewed focus on connecting the device with Web services and properties such as navigation, music, and email - all services that Nokia now has thanks to its recent round of acquisitions.

For example, in 2007, Nokia spent $8 billion on mapping company Navteq, showing how serious it was about entering the GPS market. Its new 2008 line-up will feature a plethora of GPS phones, but it's not just about providing Sat-Nav to your mobile.

"We’re not in the business of not making money from investments. Navteq is a profitable business, but if you were to view the [$8bn] investment as a standalone operation, you could question it. But if you replicate that business in, say, 50 million cars, and then move that to three billion mobile phones around the world, the economics suddenly start to look very different. The long vision is that [people] expect GPS in phones like they expect Bluetooth. And GPS is only useful if you have a mapping device."

In other words, a world class mapping service will drive the sales of handsets. If Nokia owns that mapping service, and it's tied into its handsets more than its competitors, then people will choose Nokia phone over and above its competitors'.

This is a different approach from other technologies that have found their way into mobile phones. To use Ainslie's example, Bluetooth very quickly found its way into phones, but it soon became a commodity: just another mobile phone feature that you never looked for in a mobile phone, but simply expected, as every mobile phone now comes with it.

But GPS is different: it's intrinsically tied into the mapping service that supports it, and so by providing a great mapping service that its competitors can't touch, Nokia hopes to differentiate itself from the other mobile phone manufacturers.

Nokia is also trying this approach with music. Its unlimited free download service "Comes with Music" provides a series of tunes for people to download directly onto their Nokia devices. In other words, the music drives the sales of Nokia handsets.

Nokia as a content company

What all this means is that Nokia is trying to tie its content into its mobile devices in order to differentiate itself from other mobile phone manufacturers. However, although this is an interesting strategy, and one that will succeed in parts (particularly with GPS), I can't see it succeeding much in areas such as music. If anything, it's no different than the walled garden approach that failed so dismally for the network operators.

The networks tried to tie users in to their network by offering a selection of content behind a walled garden that you could only access if your phone was tied to their network. Worse, once you were on their network, you couldn't access anyone else's content: only that offered by your network.

This approach was doomed to fail, as network operators had no prior expertise in content creation or distribution, and so offered a very poor user experience.

I can't see how Nokia's approach will be any different, as Nokia has just as much experience with content as, say Vodafone (i.e. none!). Worse, as the operators' walled gardens come down, users are now free to choose other services for themselves.

In other words, Nokia phones might "Come with Music" provided by Nokia, but they'll also be capable of coming with music downloaded from hundreds of other online music stores. Why will Nokia's music store not just be seen as yet another music aggregator, such as iTunes or Yahoo Music? It's not a compelling enough proposition for someone to choose a Nokia mobile phone over any other.

And all this is at odds with the drive in the mobile phone industry towards a completely open platform and services, with Google's Android platform leading the charge.

So I remain skeptical about this new vision. Sure, parts of it will work, but I don't expect to see Nokia as anything more than a device company in the next few years.

To see more about the company's plans, though, and form your own opinion, I heartily recommend you read MobileToday's article.

[Mobile Today]