At Mobile World Congress, where the ham is salted and the food mostly in bite-sized tapas, I got to dive in deep with Nokia’s VP of Product Development for Media George Linardos, on the just-announced Ovi Store, which will serve as the app-distribution mechanism for developers on Nokia (NYSE: NOK) phones. Linardos, whose background includes working in the entertainment industry in Los Angeles, said he was the one who “lit a lot of things on fire” to make the Ovi Store happen. “A lot of things that happen in technology don’t make a lot of sense to me. I see the opportunity for mobile content to go mainstream as a kind of media form.”

More after the jump...

Briefly, what you need know is that the Ovi Store aspires to be like the Apple’s App store, however, is advancing the concept in a number of ways. For instance, the store will recommend applications to users based on their interests, what their friends are downloading and where you are. Also different is that the Ovi Store will either sell apps to you through the carrier’s billing mechanism or a credit card (vs. Apple (NSDQ: AAPL), which uses iTunes, and BlackBerry, which will use PayPal and Google (NSDQ: GOOG), which uses Google Check-out). Here’s an edited down version of my conversation with Linardos:

Did you want to do the App Store because of Apple? “No. We actually started this before that..We did it because Nokia has invested so heavily in building a phone out, but you really have to marry it with the right services. The thing that’s always been in my head is how back in the day NBC grew out of radio. They wanted to sell radios, so they created NBC, and then that morphed into TVs. But now it’s like, what’s a TV without a network? I think we are headed toward the same union of devices and services.”

Are you saying Nokia could be like NBC? “No, I think there will be different services, but ultimately there has to be a seamless union between the hardware and the services. It’s about building an integrated experience on the device. So, the Ovi Store begun because we had these services, these first-generation services (like Mosh, which was a user-generated application-like store, and other services). There were things that were tremendously successful with that, and then there was things that made it as a business very challenging for us over the long-term. More than anything, we needed a really simple, easy experience that integrates into the device, so you don’t have to be the technology leader. It can be mainstream. There’s a button. It opens, and you find stuff you want and it happens. It’s very mainstream media stuff.”

So, the Apple’s App store must have been…

“Validating. It’s very validating. It has absolutely shown that a strong user experience with an easy purchase experience and a viable business model for developers, you can really grow this opportunity in a lot of ways. This isn’t jumping on the bandwagon because it’s about evolving what we were already doing. But if we get this right across—100s of millions of devices—instead of 10s of millions of devices (like Apple), there’s an opportunity to build a new media distribution network that can be pretty unprecedented.”

Will Nokia’s music store be wrapped up into the Ovi Store? “There’s a long-term vision, where it’s a seamless experience, but at the same time, there’s a case for specific verticals. If you are a heavy music fan you don’t want to go to a general environment…If you were looking for purely Ralph Lauren, you wouldn’t go to the department store, you’d go to the Ralph Lauren flagship store. So, there’s both this need for the Ovi Store to be a vertical for mobile content and also a horizontal to discover other Nokia experiences. For example, if I’m in the music store, and if I’m a Linkin Park fan, and I see all their music, but then I can be offered ringtones, applications and the information on their tours. With the Ovi Store, we integrate the single sign-on to give us the foundation to put together all these disconnected services.”

How does the business model evolve? “Did you see the announcement today? T-Mobile International agreed to integrate the Ovi Store across a range of devices. Nokia devices? “Yes, initially.” Initially? “We are doing Nokia devices now. That’s a full time job for as long as I can foresee, but who knows in 10 years?”

Where do you rank compared to other App stores right now. If you are seven years old and can type, you can build an app for Google’s Android Market, and then there’s Apple, where maybe you’ll get in, maybe not?” “I think because we have been doing this for four years, we’ve learned a lot from the inside out. We cover the range. Since we’ll be launching with credit card and carrier billing in some of the markets, it’s a very mature offering, and because we can go back and update some of the download clients OTA [Over-the-air], we’ll have an initial base of 50 million potential users. So, when you talk to content providers, you aren’t asking them to take the ride with us. We aren’t showing them a slide with a hockey stick happening over the years and telling them to trust us. Instead, we are telling them there is a an opportunity today. Within that, I like to break it up in three tiers: First, there’s the media guys who publish the global stuff, like the big global movie releases. Second, there’s the category leaders. Within applications, you will have social networks, and if you open social networks, you’ll expect to see MySpace. The third tier is innovation. This is the part that gets me most excited. The things that are really going to change the world of mobile, will likely come from the smaller more innovative shops…It will take some tweaking. There’s the right Darwinism, where the good stuff rises and gets noticed, and the right stuff finds the right people.

So, do you lean more towards Android then? “I think we are squarely in the middle. We are a mature, professional offering. EA is there, Glu (NSDQ: GLUU) is there, so you have all of that, but at the same time there’s an openness that allows innovation to emerge from developer community.

But are you going to make sure it’s not a virus or that it’s not using copyrighted materially illegally? “In the case of Mosh, it was a DMCA business [The Digital Millennium Copyright Act]. It means it is a user-generated service, and we are a service provider, not an editor. We were not hands-on. That’s how YouTube operates. In this case, we are a moderated service. The first barrier is that you have to have a company in order to be a publisher. The main driver behind that is tax laws and reconciling payments, but it also offers a barrier of legitimacy; and then it will be virus scanned; and then passes by eyeballs to screen for pornography and things like that. Everything is QA’d (Quality Assured), so we actually load the applications and check them out, and then they have to be either Java verified or Symbian Signed. It creates a quality assurance for the end user. You can sign up now (at http://publish.ovi.com) and then you can start uploading stuff on March 2. The store will be live in early May, and once it’s live the throughput will be a couple of days to a week, so from when you put it in to when you get it out and live. It’s not going to be a month-long queue. But it’s not also UGC (User Generated Content), where it just goes up.

Will you allow applications that are competitive, like RealNetwork’s Rhapsody service? “We have this open policy, which is ultimately about consumers being able to have the best experiences for them. We aren’t going to sit there and judge everything, but what we’ll do is protect our partners. So for instance, if there was a music client that was enabling piracy, and something that was clearly objected to, we would disallow that.”

“Well, yeah, that would be illegal…so what about totally 100 percent OK things, like Real’s Rhapsody? Is that OK?” “Yes. and who knows, maybe we’ll change that, but right now we are open. And right now we have dialogues going on with internal people with games and stuff because Nokia is fundamentally open at it’s core. That’s how we are approaching that.”

What’s the roll-out schedule for the store? “In June, the N97 will be the first device that comes with it, and by the fall we are shipping across the range of series 60 devices, and will be able to be on three-fourths of the Series 40 devices. That’s where we build the scale from there. We expect to be on 300 million devices by 2012.”

Tell me about the 70/30 percent split: “We offer both credit card billing and operator billing. There’s not anything that offers this level of maturity. On a credit card, it’s 70 percent minus taxes and then on the operator bill, it’s 70 percent minus taxes and an operator charge. It’s fixed. We are just giving it a set amount, which is like 40 percent in some cases, and 50 percent at the lower price points. That allows developer to do simple math.

If carriers get 40 to 50 percent off the top, is that less than they previously were getting? “No, in fact, we may take the hit. The carriers take what they take. We’ve just tried to aggregate it.”

So, Nokia isn’t making much money on each download, is that what you are saying? “This is a service business for us. It’s not just about selling applications, but also about building support for our platforms. We are looking at it over the longer-term. We aren’t sweating the margins on every transaction. We have to build a service that’s worthwhile and valuable to developers.”
The app store has some really big critics, with people concerned that the prices are being driven down to the 99 cent level. How will you address that?: “We have like 15 different price points, so it’s not like wide open. So you can’t pick just any price. We’ll translate that price point across regions, too. So, if it’s $5.99 in the U.S., and if you choose to sell it globally, then in India we won’t sell it for $5.99—that’s unheard of. It eases the process of distribution.

One more question. If the application is being given away for free, do you allow for advertising, and if you do, do you require the developer to use Nokia’s advertising network? “There is an answer for that one, but I don’t know it off the top of my head. I’ll have to get back to you.” [Note: As of the time this post went live, I have not heard back from Nokia, but will update the post when I do.]

Mobile World Congress channel

• @ MWC: Nokia Unveils Ovi Store; “It Knows You And Adds The Things You Like”