Changing places: Microsoft trades HP for Nokia

The juxtaposition of HP’s strategy of increased independence and Nokia’s new strategy of increased dependence can’t be more striking.

HP is probably Microsoft’s biggest customer. As the largest licensee of Windows it probably generated more revenue for Microsoft than any other company. The fact that HP invested in a new operating system for its mobile efforts shows a level of discomfort with the lack of strategic leverage.

Nokia, on the other hand, has been resolutely independent in its software strategy. For over a decade it held out against licensing any OS, especially one from Microsoft. The pantomime theatrics that took place over that decade will make a great case study some day.

But now we have a complete reversal of roles: The abandonment of platform independence by a mobile giant at precisely the same time as the acquisition of platform resolve by an IT giant.

It seems almost poetic. And that should be a clue. Whenever you see poetry, you need not look far for some truth.

These chess moves are taking place in the context of a greater game: the collision and disruption of IT and Telecom. It’s not surprising that massive market forces are causing incumbents to react. HP, Microsoft and Nokia are in the throes of fundamental disruption. Even if these moves may not be all in the same direction, they each react in ways that make sense to them.

It’s also very likely that all the moves are for naught. Incumbents rarely win with reactions. Let’s not forget that the entrants came with different business models. Apple and Google are not making money in the ways of Nokia and HP (who are channel dependent) or Microsoft (who is license dependent). The reaction must itself be asymmetric. So far it’s not clear where the asymmetry lies.

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  • jecrawford

    Is HP's reaction more likely to succeed than Nokia's?

    • Vikram

      That is a good question. Nokia had no real modern software platform that it could bring to bear fast enough with the functions and features that it needed. I work in NA and Asia and use different phones. Nokia's software is terrible on the upper end smartphone side. Their lower end feature phone stuff is perfectly fine. I am not sure what HP is going to do with their new software other than on phones. They have the reach to sell tablets but I have yet to see a compelling reason as to buy an HP tablet until it becomes so much superior to iPad – and that won't happen.

      It seems like Nokia with all of their R&D spend just didn't have Meego ready and Elop realized that he couldn't wait another 12 months to have a viable platform.

      It's interesting, I wonder if WP7 will be almost "proprietary" to Nokia if no one else uses it.

    • Both platforms seem adequate.

      What I've observed in my corner of the world (India) is that no one talked about HP & Palm. But my twitter stream just exploded with the news of Nokia and Microsoft together. Both big brands here (in a positive sense); Nokia more beloved than MS. Other OEM partners for MS and Google – HTC, LG, Motorola, Samsung – don't compare. People will actually look out for these Nokia-Win7 phones.

      On the other hand, HP may reach the Indian market much before Nokia, and catch everybody's imagination like Blackberry (right now).

      Both have great distribution networks here. In fact, HP started cosying up to mobile phone retailers last year itself.

      Maybe both have a shot in markets where unsubsidised handsets rule.

      • dms

        With all due respect, I don't think India was the main market in their minds when they decided on their partnership. Nokia is partnering with Msoft so that they can go after the higher-margin markets like the US and Europe.

      • MotoMac

        Ya only billions of potential users and one of the fastest growing economies in the world. Ignore it..
        (sent from iPad as natural born US citizen in mgmt at top 3 mobile device manufacturer)

      • True. US/Europe is the top prize right now. Margins, mindshare, disposable income to fuel ecosystems.

        But can Nokia afford to completely ignore its stronghold markets? Sales of Symbian smartphones will drop worldwide. In low-to-medium margin markets, generic OEMs and Blackberry, respectively, are catching up.

        Um..forget it. Nokia (as we knew it) is doomed. They are too late to the high-end smartphone party. And they have *no* answer to the onslaught of Blackberry.

    • Dick Applebaum

      "the collision and disruption of IT and Telecom. It’s not surprising that massive market forces are causing incumbents to react. HP, Microsoft and Nokia are in the throes of fundamental disruption. Even if these moves may not be all in the same direction, they each react in ways that make sense to them.

      It’s also very likely that all the moves are for naught. Incumbents rarely win with reactions."

      The premiss of this article is that neither (any) reaction is likely to succeed… and I agree.

  • jecrawford

    What asymmetric reactions could/should they have considered?

    There don't appear to be many options.


    • arewae

      Sure there are. It's just about running in races where Nokia has strengths in. it's about not fighting battles in grounds where Android and iOS have already established and fortified.

      Despite Androids numbers, Android is a high end device. So is iOS. Because the data plans are prohibitively expensive. The cheaper the data plans the more Android and iOS will sell.

      Symbian is where Nokia's money comes from. You either transition everyone to a new OS or you put everyone into it.

      If you can create a good smartphone type experience that doesn't need that much bandwidth, you can carve a niche for yourself. Fortify your Symbian so that it's still cheaper than Android. Focus 90% of your engineeers to make it the toughest fight for Huawei ever.

      Now that your base is cemented, time to look at future growth. Be first to market. Go for FINANCIAL services. Loan appointements via Skype thru the phone, NFC wallets, etc. Pioneer Financial services. Lock these people into your Financial Services. Put YOUR brightest minds here. Buy what you need.

      It doesn't matter if your Touch interface is crappy, you have the best Financial services, the largest pool of customers. Be the Paypal of Cellphones.

  • Kizedek

    Great post, Horace.

  • Norton

    “it’s not clear where the asymmetry lies.”. Is this where you got asymco from?

    • famousringo

      Yep. ASYMmetric COmpetition.

  • Eric

    To me, the most interesting point of the “Microkia” marriage, perhhaps an “asymmetry”, is that it seems they will push WP7 on all Nokia devices, even into the low-end and “developing markets”. Where HP hoped to buy into today’s game of making the shiniest high-end device for rich consumers, Nokia and MS seem focused on the next phase of the competition, where there will quickly be no “dumb phones”. Nokia’s ability to build durable and high-quality yet cheap devices may yet again be an advantage in this phase of the competition, as might WP7’s relatively light requirements.

    • r00tabega

      How will Microkia price-compete with Android/OMS/Tapas and Chinese manufacturers like ZTE and Huawei in the replacement of dumb phones?

    • MySchizoBuddy

      WP7 requires 1GHz as minimum processor speed. Thats not light by any definition of the word.

      • signs

        No, not yet.

  • I think MS have just saved WP7. Very clever move for a platform that was nowhere.

    • FalKirk

      I just wrote this on another thread, so I apologize for the repetition.

      Nokia just saved Windows Phone 7 – in the short run. But did this deal do more harm than good by delaying, possibly for years, the changes that Microsoft so desperately needs to make? Perhaps the best thing that could have happened to Microsoft was the rapid collapse of Windows Phone 7. That would have forced Microsoft to change. The Nokia deal does not fix Microsoft's underlying problems – it only puts off the day when those problems will be addressed.

  • hahnchen

    A complete capitulation by Nokia. Nokia are no longer a platform company, not even a burning one, instead they're just a device manufacturer.

    Microsoft are laughing, but they were probably laughing when Elop went to Nokia, because Microsoft is the only thing Elop knows. What a plant. Windows Phone is the worst possible option. With Android, they could have created their own little fragment, using their own services and UI, such as HTC Sense. They could have done this while maintaining their hardware innovation. This is something that cannot be done with Windows Phone 7.

    This is a win for Microsoft, because without Nokia, WP7 was dead in the water. Too little, too late. Now Microsoft can leverage Nokia's strong worldwide distribution to force adoption. It means Microsoft has a shot at becoming a platform company, while Nokia will never be able to do so.

    The shareholders are rightfully disappointed. Elop just traded in Nokia's future.

    • Glenskey

      "This is a win for Microsoft, because without Nokia, WP7 was dead in the water" and MS knows this, which is why they gave Nokia full control over the OS, unlike other hardware manufacturers, in order to seal the deal, Nokia is allowed to change anything they want to about winpho. I think microsoft knows the risks associated with that allowance, potentially fragmenting the experiences across winpho devices, it isnt just a one-ended bargain, i'd give Elop more credit than that.

  • Iosweeky

    I find it hard to believe that nokias board did not hire Elop with this platform shift already in mind – who was it that really made this move?

    Is this balmers last ditch effort to save his own butt? He can wring another year of CEO employment by saying "just wait for nokia to deliver us mobile market share success!" before being kicked out of the door as a disgrace.

    • kevin

      Agree with your first point. I think the Nokia Board had already decided on going to an outside OS by the day they fired OPK. Vanjoki's departure on the day Elop was hired indicates to me that the writing was already on the wall. Elop was hired because he was the best candidate to implement a relationship with MS, since he worked there (or even with Google, since he previously worked in Silicon Valley).

  • Nokia did not die today, but a few years ago. Elop did the only thing possible: sell (or bought…?) a corpse for money.

    • asymco

      Good point. Perhaps today was just the funeral.

      • Iosweeky

        It would be hilarious if this is a ploy for microsoft to gain acces to meego as a potential tablet platform.

  • O.C.

    The thing I find very remarkable is that within six months of hiring S. Elop, a "former" Microsoft manager, he decides to steer Nokia in the arms of his "former" employer. For a long time Nokia Symbian user it smells a bit fishy to me!!

    • r00tabega

      Who hired Elop? Nokia was already in Microsoft's arms before Elop.

  • noogie60

    "It’s also very likely that all the moves are for naught. Incumbents rarely win with reactions. Let’s not forget that the entrants came with different business models."
    True but we've seen stranger things, such as winning business models almost stumbled upon by accident.
    HP's moves do seem fascinating. I wouldn't count them out yet.
    There are plenty of niches and new market segments that haven't been well covered or indeed discovered in this new era of computing.
    HP's DNA and strength lies in the enterprise and it wouldn't surprise me that it will use that as its home turf to carve out a base to attack the broader market.

  • Ted_T

    One thing fascinates me here — the tablet market and what Nokia imagines the future to be.

    Let's look at this deal in the best light for Nokia possible — they are getting a phone OS that provides a good user experience, better than anything they could have produced in house in a few months time (they've had years of utter failure in that regard now, what could possibly change internally?)

    The problem though, is that leading edge of the phone OS game is quickly shifting to tablets. And there, WIndows 7 Phone gets Nokia nothing, because Ballmer and co. have adamantly refused to use it as a tablet OS, preferring the completely unsuitable desktop Windows.

    This does two things to Nokia — it leaves them without a tablet OS, which is bad. But it also leaves them without a full fledged mobile ecosystem which is worse. How do you keep developers interested if they have a choice between an ecosystem where they can leverage there smartphone work to tablets as well, like iOS, Android, even HP's WebOS and possibly even RIM with QNX is they move it to their phones fast enough? I don't think you can keep the developers without such a phone/tablet ecosystem.

    Nokia missing out on buying Palm or even QNX will go down as their last great blunder.

    • jehrler

      I was just thinking that, since they missed buying Palm, what Nokia should have been pressing for was a deal with HP.

      They get the world class WebOS and a partner who takes care of the tablet piece of the pie and lets Nokia do the phone piece.

      That, to me, is a win, win, win for HP, Nokia and their stakeholders.

      • EricE

        "They get the world class WebOS and a partner who takes care of the tablet piece of the pie and lets Nokia do the phone piece. "

        Wow – that's really brilliant! Too bad Nokia/HP didn't pick up on it. Then again HP seems to be trenching in and gearing up for the long haul. I'm not sure "slow and steady" is the right tactic as they seem to have squandered quite a bit of momentum. But I still think HP has the best long term chance to really compete with Apple.

        Other observations that if Microsoft and Nokia steal just 10% of mobile search really impacting Google are very interesting indeed. Google is still a one revenue pony, and for all their bluster they have to understand they are still very vulnerable.

        A fun time indeed!

      • jehrler

        Agree HP's slow and steady does not seem to be the right strategy. The developers are moving fast to pick their platforms and I'm not sure webOS has a growth plan on its own to create enough consumers for the developers to jump in. With Nokia, on the other hand, you'd have a range of phones selling worldwide (and soon if they rebranded the upcoming hp phones) *plus* the tablets plus a strong US brand for Nokia to leverage.

        It's too bad. It would have been a really amazing competitor. Android like product span with iOS like OS differentiation. Really would have pushed Apple to up it's game and fast.

    • Shrike

      Well, one can argue that 2010 was already too late. Nokia needed to react in 2008, not 2011.

      No, their blunder was letting their bureaucracy stifle their innovation. Maybe it's more that they stopped being paranoid after reaching the top of the mobile phone heap, and let their organization atrophy. Whatever the case, their organization couldn't pull off updating Symbian/S60-Symbian X^Y-Maemo-Meego/QT into a competitive modern smartphone platform 4 years running.

      Symbian, webOS, QNX, whatever, the secret sauce is always in having the employees unified in vision and an organization that enabled them to execute it. Nokia didn't have either. I have to question whether Nokia can pull it off even with MS providing the core software.

      Elop has to turn the fleet around and make sure every ship is going the same direction. If he doesn't it'll still crater even if they have the best mobile OS on hand.

  • O.C.

    Having experience in dealing with Trojan Horses, Microsoft decided to use one themselves!!

  • gctwnl

    It is an interesting situation. There are four major types of margin:
    – hardware
    – software
    – network access
    – advertisement sales
    The integrated and highly innovative hardware/software ecosystem that is the iPhone has disrupted hardware and software makers alike, but network providers are holding their own as they still have the keys to the door (G3/LTE/CDMA access by mobile hardware). VoIP/Skype/FaceTime are not yet so far to attack this stronghold.
    The other three are in turmoil. Apple has the strongest ecosystem and has both volume and other growth opportunities (i.e. iPad, Apple TV and other iOS devices). Google has advertisement income and does not make money from any other part of the cake. It plays a more defensive than offensive game. The network providers have given up all but network access control (no app control anymore).

    What Microsoft and Nokia seem to be trying is to marry software form Microsoft to hardware from Nokia and a Windows Phone software/store ecosystem. Following up to Ted_T: I think Microsoft will be forced to rethink their tablet strategy and they will have to move to something WP7-based. The question is if and how fast they will be able to change.

    The WP7 ecosystem has a weakness in its store. Not enough developers and apps, not enough users to attract app developers. Getting Nokia behind it may provide the volume they need but they still need catching up (and thus they need to invest money in apps, not just the OS/store). WebOS is even waker here, and only a massive support for app builders (in fact buying app development) may get HP to catch up. The Android marketplace is currently the strongest behind Apple's, but it is fragmented, weak and vulnerable (trojans, legal issues). If ether WP7 or WebOS becomes large enough, Android might sink back to a place for nerds and Google will be in dire straits.

    Technologically, it looks like the players with the strongest technological foundations are (in that order) Apple, HP, Microsoft, Google, RIM. Apple is way ahead of everybody else, even Android (e.g. in-app purchase, iAd) in terms of things that can make money for developers.
    Ecosystem-wise the order is: Apple, Android (and the rest barely registers) where Android has serious problems with fragmentation and quality (malware, legal issues). And there is this nasty contradiction in Google's position: the more their market place is a success, the less they make from web advertising on mobile, unless they will have something like iAd. In retrospect it becomes clearer how important iAd is for the mix and nobody has something like it yet.

    In consumer land, Apple is king. But the enterprise is still up for grabs and may decide who will be #2 (and the #1 of the future). What RIM, Microsoft/Nokia and HP need to do is:
    – As fast as possible get on par with Apple with respect to user experience (RIM has a long way to go here)
    – As fast as possible get on par with Apple in all the things that enable developers to make money
    – As fast as possible get a foothold in the enterprise

    It can go many ways, but my current guess would be that we will see a steady state consisting of Apple/iOS, and either Microsoft/Nokia or HP as second player and Android for the low end 'new feature phone'. RIM is well positioned in the enterprise, but for the rest seems in a very poor position (e.g. technology wise) and seems to be the most likely to go down. But it can easily enough go another way.

    • r00tabega

      Not sure how you put Microsoft before Google in your estimation of technical foundations. At least Google has tablet OS (like HPalm and Apple). They've shipped numerous releases and have dozens of manufacturers on board.
      In which way is WP7 a better technical foundation than Android?

    • EricE

      "Android might sink back to a place for nerds and Google will be in dire straits. "

      I think this is inevitable. With no guiding force to unify the Android experience, Android will be less and less relevant to the mainstream. Sure, there will be tons of phones with Android, but they won't be used as Android phones.

      Everyone chanting about the "ecosystem" are falling a little short in their analysis. It's not just "ecosystem", but experience. Every time Apple speaks they continually reference focus on customer experience. That's the key. The Apple ecosystem doesn't exist in and of it's self, but as a means to foster a good customer experience.

      This is why Android is never going to capture the profits that Apple does. Sure, the pieces of the Apple ecosystem are there, but the experience is – to be overly kind – wanting. All the defenses of it make sense to geeks or techies, but at the end of the day the average non-technical person doesn't care about feature checklists, "open" or potential. These things are tools and their primary concern is will they function as a tool with minimal fuss and *do what they want to do*?

      For a key to the potential for success for any approach, just ask yourself (honestly if you can) "Will this hardware/software lead to a positive experience where the emphasis is on the utility of the outcome instead of the device itself?" This is the "secret" to Apple's success. Why it's so hard for everyone else to duplicate is they seem (like many in the tech industry) to totally discount and almost spurn focusing on technology as a tool instead of something to be adored in and of itself.

      • nangka777

        "Every time Apple speaks they continually reference focus on customer experience. That's the key. The Apple ecosystem doesn't exist in and of it's self, but as a means to foster a good customer experience."

        this is so very true.

        _every_thing apple does or has done – from technology & companies acquisitions, the itunes ecosystem & its components, their products & their components (a4 chip for example. can't believe blackberry ceos kept boasting the dual core in their non-market-existent playbook, where apple has yet utter a single word on what chip a4 is based on!), and core software technologies like grand central, webkit & app api's, focuses on giving the best experience to their customers.

        if anybody wants to compete with or copy apple, this is the only way to go. truth is, nobody is capable of doing the whole deal. everybody is late to this "total user experience" party. apple actually started laying out this plan long long long time ago when jobs touted the mac as the hub of the user's (their customers) digital life. what we've seen since then is their meticulous execution of this plan. (apple tv will be their next new frontier.)

        apple will be the master of our digital lives for quite a while to come. (thank goodness for that. personally, i trust apple much much more than any other company.)

    • Shrike

      Yup. Never forgot that MS has monopolies on office automation software (Office and Exchange) and desktop operating systems. Office/Exchange compatibility combined with integration into MS Windows can easily fall into a virtuous cycle and lead to domination.

      • Kizedek

        Except that Apple has licensed MS Exchange for a few years now, and actually implements it better than MS does itself — always has. It is actually easier (and better) to connect with an MS network from an Apple product than from an MS product — the thing that keeps this from happening is draconian IT policies enforced by non-progressive IT departments.

        Now that CEOs, lawyers, salesmen, etc. are seeing how they like their iPhones, it is forcing IT to get with the program and become more platform agnostic. Now many in IT are beginning to manage their networks with MacBooks or iPads!

        And with this shift in IT attitude, and the loss of HP, MS may be waking up — they are beginning to create their own iApps. The monolith is cracking.

  • Scott

    Nokia should have chosen WebOS, now that would have made the game interesting. Neither Balmer or Elop seem to have the dna to make a new ecosystem thrive. I completely agree with FalKirk, if I were a MSFT shareholder I'd want Balmer's head on a pike.

    Imagine what they could have done with WebOS, that truly would have been a game changer.

    • MySchizoBuddy

      Nokia will be paying money to MS for the licenses. Why would the shareholders put balmer on a pike. He just game them a huge source for selling additional licenses.

  • poke

    My question is, Is Android really a disruptive success in this story or does its success reflect the reactions of other incumbents? Android's success is really the story of Samsung and HTC. In the case of HTC you have a company that represented 80% of sales of the Windows Mobile platform but had to find another platform due to Microsoft fumbling Windows Phone 7. In the case of Samsung you have a company struggling to create its own smart phone platform in much the same way as Nokia. They just reacted sooner. It's like a Necker cube effect. If you look at Android you see disruptive success on par with the iPhone; if you look at Android's vendors you see reactionary moves by incumbents to stop the bleeding. Which way of seeing this reflects the truth?

    • WaltFrench

      Android looks like a very motivated second entrant. They realized long ago they had a golden opportunity, especially since US carriers like to play manufacturers off one another so they stay relatively powerless. Sure enough, Verizon pumped Android, bigtime.

      Damn smart move by the Android team, methinks.

      Go back to Christensen's "disruptive technology" stuff and you'll see that as soon as a disruptive technology becomes "sustaining," costs, distribution and other business-as-usual stuff matters. (Yes, those can also be disrupted.) Here, in a remarkably short time, technology has been crystalized around the 1GHz ARM chip with a half to a full GB of RAM, a decent unix-style OS, camera, 4+ hour batter, blah blah blah. The iSuppli teardown of the VZ iPhone shows the CPU as way down the list of costly parts: something like 4% of the total materials.

      Apple was probably a bit surprised to see things gel so quickly. (Jobs claimed at the iPhone intro that they were 5 years ahead of everybody else.) They will probably try (asymmetrically?) to shift the terms to media, NFC, other ecosystem aspects, while they hang onto a very modest edge in the raw technology of the 2010 marketplace.

      Android seems to be trying to shift the terms to ubiquitous, ad-supported apps; a slightly more powerful kit of hardware to offset Apple's efficiencies in software that they won't be able to match for some time. While they need capable OEMs, it seems like they can do just fine with manufacturing-only partners who allow Google to supply the software and store; the carriers to supply the distribution.

      WP7/Nokia? I guess they have to try to fight it out on the distribution side. RIM and HP? Hoping somehow to leverage their corporate and desktop businesses, respectively?

  • I'm a little disappointed that you did not provide us any "truth" at the end of this post. But an excellent observation in the poetry of Nokia's abdication to Microsoft and HP's simultaneous abandonment of Windows.

  • Andre Richards

    Personally, I think both HP and Nokia and MS are all in for some unpleasant surprises in the near-future. I don't think companies losing their footing in a given market can save themselves by banding together. Think Blockbuster and Circuit City. No matter what good ideas each side brings to the table, the fundamental causes of their failure will still exist and pull the rug out from under them. For Palm/HP, we've already seen that flaw and that's a lack of speed. The HP WebOS tablet looks pretty interesting but a late summer release means it's going to enter a market that will include the next revisions of iOS and its devices as well as a slew of Android tablets. For MS/Nokia, it is (I suspect) an overly officious approach to things, making the fatal mistake of throwing out too many overcooked ideas and being unable to pare any down to a killer feature or two.

    I have no interest in seeing any of these parties fail, but seriously, if you had a $1000 in your hand to bet on either of these pairings, would you?

    • arewae

      Eh. HP is in the computing industry. In a world where Android is the only option against iOS, they chose to make their own. A) Webos is a success! Woot. B) WEbos fails, they adopt android as a platform. They use the experience of Palm to create a UI layer that's competitive against HTC sense.
      These are the right moves.

      Nokia's had smartphones, App stores, Music services way before anyone! It's not about speed but implementation.

      Focus. Scale Back on the number of models. Don't hire 9000 engineers and split them evenly between all your legacy OSes. The more Focus, the faster the product comes out, The more Nokia says no, the better the product will be. It doesn't matter if they take an extra year if the product is GOOD.

      They need to hit a HOMERUN. Doesn't matter if it takes them 1 or 2 years. Their next device needs to OWN whatever target market it is aiming for.

  • ______

    Slightly off topic : Whether or not my casual suggestion to write for The Economist was taken seriously, you ended up there regardless. Good stuff.

  • Jeff Medcalf

    I think that the business models that are making money, because they make consumers' lives easier, are integrated hardware and software. This doesn't apply on servers; it applies everywhere else.

    If I were in charge of MS, I'd be very interested in buying Nokia or HTC or someone similar, and Acer or someone similar, and going it alone on phones and the desktop, both HW and SW. It probably would mean splitting into three companies, though: Windows (which would build HW and SW for desktops and mobiles); servers (which would build the server OS and enterprise SW offerings, for anyone's HW); and software (which would build the apps for any platform, desktop, server or mobile).

    Yeah, it's a desperation move when MS is still profitable, but reality is that "Windows everywhere" has failed to make money while integrated platforms have done quite well. Business leadership is not about today; it's about five years from now.

  • dagamer34

    The thing people seem to forget is that we seem to think that markets are set in stone when the mobile area is so young that we aren’t realizing how fast we are innovating. Just think back to two years ago. Android was barely an OS. Windows Mobile wasnt the pure laughing stock it is today. WebOS had just been announced. Blackberry ruled the business market with an iron fist.

    Point being that a LOT can change in two years. Nokia hasnt been relevant in the US market for years, despite being the most publicized of all smartphone markets. I don’t think Nokia has the brand recognition it used to and that’s what it needs to regain again.

    And as for Nokia going to another Platform besides WP7, that clearly makes no sense. HP is never going to let another OEM use their OS, as they just paid a good amount of money for it. And using Android isnt that great a deal as they would NOT have gotten as much out of Google as they did from Microsoft. Microsoft needs Nokia more than Google does.

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  • There are interesting technical arguments about whether this could be made to work, but for me the important question is the one about business management, well articulated by Robert Peston in his BBC blog… where he says

    "it is incredibly difficult to create a single enterprise with ruthless purpose when two giant businesses, with strong, proud respective cultures, decide to collaborate as equals. Typically if ground has to be made up fast in a competition, it helps to know who is actually in charge, who is holding the reins.

    I am trying to remember a successful precedent of collaboration on this scale – involving businesses from different continents and with pretty different products and services – that worked, absent a formal takeover of one company by another, or a full-scale merger that created a unitary board and hierarchy.

    Maybe it is a failure of memory or imagination, but I can't think of any encouraging precedent."

    The success of Apple has been founded on their ability to ride the technology waves, switching direction as fast as any small business, and ruthlessly discarding any commitments, agreements or partnerships which no longer make business sense. I cannot see this happening with Nokiasoft.

    • noogie60

      "I am trying to remember a successful precedent of collaboration on this scale – involving businesses from different continents and with pretty different products and services – that worked"

      The only ones that spring to mind are in the aircraft engine industry (CFM – between GE and SCECMA and Engine Alliance between Pratt & Whitney and GE). These however have very well defined parameters and help defray massive capital investments.

  • HD Bou

    Dubbing this new joint venture “NoSoft” (rather than “Micronia”) might more aptly describe this new cartel and indicate the chances of success.

  • kevin

    It's not only a collision and disruption of IT and telecom. Media and retailing have been and will be even more i caught up in this ongoing multiple industry collision, also known as digital convergence.

    To survive requires incredible insight, strategy, and fortitude (as in to-the-brink negotiating). From that perspective, Apple still needs Steve Jobs.

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  • http://ultimausa

    Thanks for really stimulating thoughts, as ever.

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