ESPOO, FINLAND If being first mover meant anything, Anssi Vanjoki and his colleagues at Nokia (NOK) would already rule the mobile Web. Way back in 1996, the Finnish company launched a prototype phone with a "dangerometer," which used software and satellite technology to match your location to an online database of crime statistics. If you strayed into a dodgy neighborhood, the meter would turn from green to red, and an icon popped up inviting you to buy life insurance online.
Vanjoki, a Nokia executive vice-president, chuckles as he recalls the farfetched idea. Yet he and his team at Nokia headquarters, on a quiet cove outside Helsinki, are convinced the day they've long hoped for has finally arrived. After a decade of false starts and half-kept promises, the Net is breaking free of its desktop chains and going mobile. "The next generation of the Web is going to be all about the small multimedia computer and not the PC," says Vanjoki.
There's increasing evidence that he's right. The number of people who use their phones to cruise the Web is surging worldwide, with the figure in the U.S. rising 36% over the past year, to 40 million, according to researcher Nielsen. Phones are getting better at handling data, their Web-surfing software is easier to use, and rates for mobile surfing are plummeting. In addition, wireless operators have loosened their grip on what customers can do with mobile phones, making it easier for people to install their own software and buy services from third parties. "The mobile Web is set to take off because the barriers are coming down," says Tim Berners-Lee, inventor of the Web and director of the standards-setting World Wide Web Consortium.TAILORED FOR EVERY MARKET
Vanjoki may have had an early vision of this emerging future, but lately Apple (AAPL) has led the way in realizing it. The company's iPhone, with its iconic touchscreen design and near-magical software, has turned millions of U.S. users on to the mobile Net. Just a year after debuting its first phone, Apple has snatched the spotlight from Nokia and rivals like Research In Motion (RIM).
Now, Nokia is striking back. The company is launching its first mass-market touchscreen phone this month. The 5800 will have a shape and screen similar to the iPhone, but its price will be about a third less than the Apple device. In addition, the Nokia phone will come with a year-long music service subscription that will let customers download and keep all the music they want from the four major record labels. Nokia plans a steady stream of touchscreen phones in the coming months, an effort aimed at overwhelming Apple and others with devices for different customer segments and price ranges in local markets around the world. "We're able to do this faster than anyone else," says Vanjoki. "We have a localizing machine that spans all countries."
That's easy to forget with all the euphoria surrounding the iPhone. Nokia is still far and away the biggest and most influential player in this industry. The iPhone may win the hearts and fill the pockets of jet-setters and gadget hounds, but they're a relatively small group. Nokia will sell nearly half a billion handsets this year—50 times the number of iPhones Apple hopes to sell. The Finnish company already is well entrenched in the chaotic streets of Lagos, the rice paddies along the Ganges, and in factories and schools from So Paulo to Shanghai. Its phones are ubiquitous in areas where people have never heard of Apple.
So for much of humanity, it will be Nokia, far more than its American rivals, that will define the mobile Net. "We touch so many consumers," says Vanjoki. "They expect Nokia to offer them new things."