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A review of Asymco Predictions on Nokia’s new platform strategy

Predictions on Nokia’s new platform strategy: new OS for the US | asymco.

Here are my predictions from January 27 for the February 11 Nokia strategy announcement followed by the actual quotes from Nokia’s press release:

  • Prediction: There will be a multiple OS strategy.

Actual: The following sub-units [make up] Smart Devices: Symbian Smartphones, MeeGo Computers, Strategic Business Operations. To support the planned new partnership with Microsoft, Smart Devices will be responsible for creating a winning Windows Phone portfolio.

  • Prediction: The US market will be the first to see a new non-Nokia OS. I would guess Windows Phone with AT&T.

Actual: “Plans for a broad strategic partnership with Microsoft to build a new global mobile ecosystem; Windows Phone would serve as Nokia’s primary smartphone platform”

  • Low end devices will remain with Symbian due to price considerations for the chipsets, components.

Actual: “Symbian becomes a franchise platform, leveraging previous investments to harvest additional value. This strategy recognizes the opportunity to retain and transition the installed base of 200 million Symbian owners. Nokia expects to sell approximately 150 million more Symbian devices in the years to come.”

  • Prediction: MeeGo will be phased out in phone products but development will continue for tablets

Actual: Under the new strategy, MeeGo becomes an open-source, mobile operating system project. MeeGo will place increased emphasis on longer-term market exploration of next-generation devices, platforms and user experiences

More details to follow, but so far it looks like there are no surprises.

  • r.d

    This also saves Nokia from getting sued by Apple
    since Apple is not going to sue either Microsoft or HP
    because Apple has cross licensed each others patents.

    • asymco

      Microsoft indemnifies licensees of WP7 against any other future threats. Google doesn't. Expect many more royalty payments from Android users to Microsoft/Nokia.

    • Joe

      Have you got a link to a cross license with HP? I'm pretty sure there isn't one, and HP really needs to be sued. Hard.

  • dongmin

    So it's going to take them 2 years to marry everything together?

    "Nokia expects 2011 and 2012 to be transition years, as the company invests to build the planned winning ecosystem with Microsoft."

    That's an eternity in the smartphone market. Android could have 60-70% by then.

    • asymco

      Two years is lightning fast. I would discount that.

      • rattyuk

        Except that Nokia have now Osbourned their current lines.

      • Exactly though they've not actually announced the replacement which is possibly even worse.

        Meanwhile, the developers, having Qt yanked out from under them and no timescale for the new Nokia are off elsewhere – Android mostly.

      • Niilolainen

        Osbourned? Have not heard that term– please enlighten!

      • rattyuk

        "The Osborne effect is a term referring to the unintended consequence of the announcement of a future product ahead of its availability and its impact upon the sales of the current product.

        Pre-announcement is done for several reasons: to reassure current customers that there is improvement or lower cost coming, to increase the interest of the media and investors in the company's future prospects, and to intimidate or confuse competitors. When done correctly the sales or cash flow impact to the company is minimal as the revenue drop for the current product is replaced by orders or completed sales of the new product as it becomes available.

        The Osborne effect occurs when this pre-announcement is made either unaware of the risks involved or when the timing is misjudged. Customers react immediately by canceling or deferring orders for the current product, knowing that it will soon be obsolete. Inventories increase and the company must react by either discounting or lowering production of the current product. Either of these choices depresses cash flow. In the actual case of Osborne Computer Corporation, the company took more than a year to make its next product available. It ran out of cash and went bankrupt in 1985."

      • Black S

        I was reading Osbourne effect and wondered what on earth had they done again!

  • Anon Cowherd

    Feb 11: "Look How Right I Was!"

  • Jeremy Wa

    Take two also-rans with very rapidly declining positions in their markets and join them together for excellence? Neither one has any current innovative capability in handsets.especially Microsoft. Both are fabulously inbred and hopelessly bureaucratic without any leadership capability, especially Microsoft – see rapidly and accelerating declining market share. Both have been furious shareholder wealth destruction machines. Perhaps this joint arrangement can be success after many years but this seems very unlikely.

    Prediction: the big winners will only be the sauna companies in Redmond Washington; the big losers will be the Nokia/Microsoft shareholders.

  • Joe_Winfield_IL

    I hope it works! A catastrophic failure will enhance and accelerate Android's chances at smartphone hegemony. If they can't succeed together, the portfolio of smartphone choices gets much smaller, knocking both out at once.

    If they succeed, Apple has a path forward to continue skimming all the profits from a diversified market. The more choices a buyer has, the more likely they will be to gravitate towards something unique. But in a world with two or three choices, network effects may drive an ever growing percentage toward the biggest player. Ultimately Android, not Apple, stands to clean up if this thing goes poorly.

    • joe

      Until android is pulled from the market for violating apple's patents and apple ends up owning all the android manufacturers plants. Of course you can't predict the justice system, but this would bet he case if justice were done.

      Google has replaced microsoft in the "evil corporation that can't innovate and so steals everything not nailed down" category.

    • Niilolainen

      An 'Android hegemony' (or any kind of hegemony) does not appeal to me at all. Even though I agree this makes it more likely. Wintel managed to suck all the innovation out of the PC market and that kind of overwhelming victory for Google would do the same to the smartphone market.

      I hope that the Micronok strategy succeeds in delivering a viable ecosysem and that RIM and Apple stay strong. I fear a future where Google has everything their own way.

  • FalKirk

    My initial thought was that this was a huge win for Microsoft. Then I realized that it might be just the opposite. In my opinion, Microsoft is going down the wrong path. The failure of Windows Phone 7 might have been enough of a shake things up and change the company's direction. The Nokia deal not only props up the existing regime it will delay the radical, but necessary, changes that Microsoft desperately needs to make. A huge short term victory with possibly tragic long term consequences.

    • r.d

      Microsoft believes it can copy anything and version 3 will win over the customers.
      It hasn't happened this century but it doesn't stop them from burning
      thru billions.

      • Well, WP7 isn't a copy of anything so that's new but it doesn't really stack up as a UI beyond the featurephone UI it really is.

  • jlaustin

    I wonder if all the pundits who years ago cheered an "open source" Symbian as the future are willing to post their predictions and the results.

    I'm surprised all the strategy arguments of those years aren't being revisited now. Especially with Android the new "open source" horse.

  • "it looks like there are no surprises"

    Huh? This seems a much broader and deeper shift than predicted.

    What did people expect today?
    •Renewed focus and push behind MeeGo, Qt and Ovi
    •Symbian to be allowed to drift down to low-end market
    •Adoption of Microsoft Windows Phone as an alternative smartphone OS for the US market, potentially thru collaboration with AT&T
    •Cull of senior management
    •Weak rumours: Relocation of HQ to US, adoption of Android

    What actually happened?
    •Announced will adopt Windows Phone as mainstream smartphone OS (they’ve gone all-in)
    •Announced will phase out Symbian!!!
    •Announced joint Apps marketplace with Microsoft (= the end of Ovi)
    •Announced will relegate MeeGo to a more speculative research project
    •No mention of Qt: presumed redundant if WP is the single push
    •No relocation to US, no cull of senior management (musical chairs except MeeGo head, head of N.America), no Android
    •No announcement on S40: presume low-end will continue as-is

    This is a seismic shift for Nokia, the industry and Finland

    • asymco

      This post is about what I predicted not a discussion about what others predicted. The surprise to me is that Symbian is being knifed without ceremony.

      • Niilolainen

        And that's huge and much more far reaching than anybody thought.

        I look forward to seeing your posts on this as you digest it

  • maddoguk69

    "leveraging previous investments to harvest additional value"

    What does this even mean?

    "Nokia expects to sell approximately 150 million more Symbian devices in the years to come"

    Who to? Not to smartphone users, I'm guessing. Developers will surely abandon this like the proverbial rats on a sinking ship, and who is going to buy a smartphone with a moribund developer ecosystem?

  • davel

    There are a few posts here about IP and Android.

    I do not remember if we discussed it here or not, but my understanding is because Android has no licensing fees Google is in effect isolated. ie there is not contract.

    This leaves Apple to sue the phone manufacturers. Being late to the game it becomes a legal mess as Apple probably steps on some IP issues itself.

    • Niilolainen

      I don't think it matters if Google charge for it or not, if they infringe IP then they will open themselves up to lawsuits. The fact it is free does not insulate them from IP law.