Linked by Thom Holwerda on Fri 11th Feb 2011 11:35 UTC
PDAs, Cellphones, Wireless A lot of people are wondering why Nokia didn't choose to go with Android. How can Nokia differentiate themselves when Android is a lot more open and free than Windows Phone 7? As usual, the key to this is in the details. If you read the announcements carefully, you'll see that Microsoft offered Nokia something Google most likely didn't. Update: What a surprise. Elop just confirmed Nokia has a special deal with Microsoft. Whereas HTC, Samsung, and so on are not allowed to customise WP7 - Nokia is, further confirming my theory.
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Rantrantrantrantrantrantrantrant
by elsewhere on Sat 12th Feb 2011 04:04 UTC
elsewhere
Member since:
2005-07-13

I was one of the naysayers at the rumors of a Nokia/Microsoft deal. Not enjoying the taste of crow at this particular moment.

I am, however, astounded at just how far Esop has been willing to commit to this venture. He's not only diluting or outright tossing literally billions worth of investments made over the years in the development of their own platform ecosystem, but he's quite likely staking the future of Nokia on Microsoft's ability to continually deliver a highly compelling platform for Nokia to develop around.

WP7 is too new for that type of investment. Particularly when you consider that part of the reason WP7 has struggled is that MS had previously alienated it's two strongest mobile partners, Motorola and HTC, and drove them to commit to Android. Many people would consider that to be a warning flag.

Then I find myself trying to think of one struggling company that has managed to pulled themselves up and achieve long term growth and success by partnering with Microsoft, or without becoming utterly dependent upon them. Maybe there are, I just can't recall any. Does Nokia think they will be different?

The problem with these desperation deals with Microsoft is that they are always in Microsoft's favor. There's reciprocity, but it's still balanced towards Microsoft. Nokia has everything potentially to lose, Microsoft has relatively little. What are they thinking?

How much analysis was put into this decision? The people in favor of it seem to assume that Nokia's 30%+ smartphone market share (which is the minority portion of their overall phone sales) will automatically translate into a 30%+ market share for Microsoft. How so? Nokia's expertise in this area is low-cost power-efficient design that can utilize underclock processors. One thing Symbian excelled at was getting bang for the buck. I can't see how they're going to be able to deliver WP7 phones without having to utilize more expensive hardware, and a Microsoft license, which will necessitate price increases for those models. I think it's very big risk to assume that just because Nokia has been successful in the smartphone market with Symbian, it will translate to success with WP7.

Then there's the timing of this announcement. We're dropping everything we've done until now, and we're moving exclusively to WP7, except we have no products to announce, no time frames and we need you to keep buying products that we've just obsoleted for the next year or two, m'kay? Right.

And even from Microsoft's POV, what were they thinking? They've just announced that Nokia is going to be the preferred WP7 partner and will have exclusive ability to customize and co-develop the platform, but Samsung and SE should continue investing in WP7 anyways, at least until Nokia is ready to take over. At this point in WP7 lifecycle, with less than stellar launch numbers and adoption, it seems like they may be cutting their own legs here if Nokia isn't able to start pumping phones out right away.

This whole thing just raises more uncertainty at a time when neither Nokia nor the nascent WP7 market need it.

As someone who worked for a Nokia partner for several years, the one thing that always struck me with Nokia was that they had vision, strategy to achieve that vision, and the resource to see that strategy through. They just absolutely sucked in their execution, and in business, execution is everything. The seeds for Nokia's current situation were sown many years ago, when their success and rapid growth led to the creation of massive bureaucracies, analysis paralyis, and entire departments and business units that undermined each other and all sought to move in different directions.

Their Qt strategy was sound, as it played on Nokia's biggest strength, their market share. It could have bridged their low-end symbian devices with newer, more powerful high-end devices. Their install base alone would have given them the largest target market for developers. But, ack, their execution. It just seems to have been one clusterfsck after another.

Rather than throwing out the baby with the bathwater, Esop should have focused on slashing the management layer, consolidating the business units and focusing the business on specific goals. But then again, he's from Microsoft, and they have pretty much the same mentality.

Nokia certainly needed to do something, but they were hardly in such a desperate state that they had to do this. Even carrying WP7 as a boutique brand while continuing their current development, or something along those lines. But selling their brand out and dumping their massive investment to date? WTF.

This was really poorly handled, and I can't see how Nokia benefits in the long run. Nor can their shareholders, apparently. Or their employees, several hundred of whom walked out today after the announcement was made.

Heavy sigh. I was looking forward to see what they were going to do with Meego. Guess it's back to waiting to see what the next Nexus will hold, although HP has peaked my interest.

Reply Score: 5

Soulbender Member since:
2005-08-18

I was one of the naysayers at the rumors of a Nokia/Microsoft deal. Not enjoying the taste of crow at this particular moment.


Welcome to the club ;) I was sceptic about the MS-Nokia thing too but I guess we now know what Elop/Esop/Whatever-the-fuck-his-name-is was sent out to accomplish: give MS access to Nokia's brand, userbase and sales channels.

Reply Parent Score: 1

mrstep Member since:
2009-07-18

Thank you for making a point I was also wondering about - why does anyone think the market share will magically move from Symbian to WP7 just because Nokia chooses WP7? Who says that Android / iOS won't just take larger chunks for themselves?

I'm not seeing this WP7 momentum that indicates it's suddenly going to make huge inroads, and it's not like this is going to be an upgrade for existing Nokia phone holders, this is a new phone purchase, at which point... why not look at the market leaders?

Reply Parent Score: 2

dsmogor Member since:
2005-09-01

The decision comes from the conclusion that in the future market share = app store share.
So the current sales of symbian phones are meant as irrelevant. A very US centric POV to say.

Reply Parent Score: 2

segedunum Member since:
2005-07-06

How much analysis was put into this decision? The people in favor of it seem to assume that Nokia's 30%+ smartphone market share (which is the minority portion of their overall phone sales) will automatically translate into a 30%+ market share for Microsoft.

Indeed. Alaso remember that no WP7 phones are going to appear until at least 2012 and Symbian is going to be put on life support until then. What do Nokia expect to sell, and do they not expect their market share to sink faster than it has been?

When WP7/8/9/10/11 etc. etc. finally appears Nokia is going to have virtually nothing left.

Reply Parent Score: 2

TTy23 Member since:
2010-05-28

Thank your for your great post!

That is exactly what I am thinking.

Reply Parent Score: 1