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In memoriam: Microsoft's previous strategic mobile partners

Microsoft’s new “strategic partnership” with Nokia is not its first. For a decade the software company has courted and consummated relationships with a variety of companies in mobile and telecom. Here are the ones I can remember:

  • LG. In February 2009 Microsoft Corp. signed a multiyear agreement for Windows Mobile to be included on devices from LG Electronics Inc. LG would use Windows Mobile as its “primary platform” for smartphones and produce about 50 models running the software.

What happened? LG made a few Windows Mobile devices but with WinMo uncompetitive, they abandoned the platform and moved to Android losing years of market presence and all their profits.

  • Motorola. In September 2003, Motorola  and Microsoft announced an alliance. “Starting with the introduction of the new Motorola MPx200 mobile phone with Microsoft Windows Mobile software, the companies will collaborate on a series of Smartphone and Pocket PC wireless devices designed to create a virtual “remote control” for the Web-centric, work-centric, always-on-the-go mobile professional.” In addition, the alliance includes cooperation on joint marketing and wireless developer programs.

What happened? Motorola launched a series of Windows Mobile phones culminating in the Motorola Q “Blackberry killer”. As Motorola hit the rocks in profitability new management reached for the Android liferaft. The company now relies exclusively on the Droid franchise.

  • Palm. In September 2005 Palm and Microsoft announced a strategic alliance to “accelerate the Smartphone market segment with a new device for mobile professionals and businesses. Palm has licensed the Microsoft Windows Mobile operating system for an expanded line of Treo Smartphones, the first of which will be available on Verizon Wireless’ national wireless broadband network.”

What happened? Palm shipped a few Windows Mobile, famously dismissing Apple’s potential entry as something “PC guys” could never achieve. A new CEO, a private placement and an acquisition later the company is a division of HP making its own operating system.

  • Nortel. When Steve Ballmer was famously laughing at the iPhone and saying that he likes the Windows Mobile strategy “a lot” he was sitting next to the then-CEO of Nortel (Mike Zafirovski formerly of Motorola) with whom the company had just closed a strategic deal.  “an alliance between Microsoft and Nortel announced in July 2006 …  includes three new joint solutions to dramatically improve business communications by breaking down the barriers between voice, e-mail, instant messaging, multimedia conferencing and other forms of communication”.

What happened? Nortel declared bankruptcy two years later.

  • Verizon. In January 2009 “Verizon Wireless has selected Microsoft Corp. to provide portal, local and Internet search as well as mobile advertising services to customers on its devices. The five-year agreement will go into effect in the first half of 2009 when Microsoft Live Search is targeted to be available on new Verizon Wireless feature phones and smartphones.” The deal would ensure Bing distribution to all of Verizon’s smartphone customers.

What happened? Bing did ship on some devices but in October 2009 Droid came to Verizon.

  • Ericsson. In September 2000, “Ericsson and Microsoft Corp. today launched Ericsson Microsoft Mobile Venture AB. This previously announced joint company will drive the mobile Internet by developing and marketing mobile e-mail solutions for operators. The first solutions are expected to be on the market by the end of the year. The company is part of a broader strategic alliance between Ericsson and Microsoft”

What happened? Ericsson divested itself of the mobile division forming a joint venture which would go on and make more strategic alliances with Microsoft over Windows Mobile culminating in a loss of profits and eventual flight to Android.

  • Sendo. In February 2001, Microsoft announced a partnership, in which Microsoft bought $12m of Sendo shares and a seat on the board. Sendo was to be Microsoft’s “go to market partner” for the Stinger smartphone platform that would become Smartphone 2002.

What happened? Sendo after litigating IP issues with Microsoft went bankrupt in 2005.

And finally,

  • Nokia. No, not this OS deal, but in August 2009 “The worldwide leader in software and the world’s largest smartphone manufacturer have entered into an alliance that is set to deliver a groundbreaking, enterprise-grade solution for mobile productivity. Today, Microsoft Business Division President Stephen Elop and Nokia’s Executive Vice President for Devices Kai Öistämö announced the agreement, outlining a shared vision for the future of mobile productivity. This is the first time that either company has embarked on an alliance of this scope and nature.”

The plan was to bring “Microsoft Office Mobile and Microsoft business communications, collaboration and device management software to Nokia’s Symbian devices.”

What happened? One and a half years later the same Stephen Elop announced that Symbian will be deprecated.

Comments

218 Comments so far. Leave a comment below.
  1. Shouldn't Sendo be added to that list?

  2. Scott Hughes,

    I was going to same the same thing. The MS alliance destroyed Sendo. http://en.wikipedia.org/wiki/Sendo.

    • Waveney,

      When you read that page it does remind you of the MS modus operandi – in a nutshell!
      Embrace (form alliance) Extend (promise but don't deliver) Extinguish (Sue for non performance of a one sided agreement > bankruptcy). It wouldn't surprise me to hear of the total subsuming of Nokia's tech and IP into the MS Borg within 2 or 3 years. RIP Nokia.
      Things must be a whole lot worse in the Nokia world than even Horace can tease from the publicly available information. The wonder is that companies keep falling for this sort of deal with the masters of deceit.

  3. I can't think of anyone that partnered with Microsoft that didn't suffer terribly… starting with IBM and MS-DOS.

    • asymco,

      Just trying to keep it to one industry. There's only so much one can keep track of…

    • Michael,

      True that.

      and then again with OS/2.

      Also Apple… allowing Microsoft to port the Macintosh Toolbox, so they could have a GUI Office Suite for DOS that was compatible with the Mac version. Unfortunately and unknown to Apple, they then used that code to build Windows 3.0 around. If you were a developer back then, it was laughably obvious based on the API's and function calls. Of course, Apple lost that battle in court, because i believe it was ruled that at least 10% of the code was different and that's the minimum the law required. Was so ridiculous.

      • newtonrj,

        Jury's still out. Terminal Services and Virtual Machine still can exist enough to kill off Citrix's future. Plus Citrix can't figure out sound sync or video deployment. They may obsolete themselves with or without MS help.

    • anlumo,

      Apple's partnership in 1997 went pretty well for Apple, but it didn't have any tangible consequences, it was just some lip service.

      • hysonmb,

        Apple is still alive because of the cash infusion from MS. At the point where they were reaching out to partners, they could have easily been allowed to fade away or scooped up by someone who would have ruined what they were doing. Imagine, "Steve Jobs- Compaq Design Consultant".
        Microsoft saw them as a nessecary evil at that time. They were just in it enough to exist but were not a threat. Steve Ballmer may want to smack Bill Gates with an iPad for that choice today.
        I think it was a good thing and still is. A race is no fun if you're up against a bunch of kids, Apple is all grown up now and MS has to figure out how to get back in front.

      • That cash infusion was mostly for PR. It was way more important that Apple was able to get Microsoft to commit to continuing to support Mac versions of Office. It was a way for Steve Jobs to stop the conversation of who won or lost the OS wars… clearly Microsoft had… and to pivot the conversation to what was to come.

        But the cash was minor in the big picture.

      • jonmilani,

        And, ironically enough, Microsoft really wouldn't exist without Apple either, given the origins of Windows (as has been discussed above).

  4. MSFT,

    Google buys Nokia and stop free OS model!!!

  5. Jeremy Wa,

    Take two legendarily slow bureaucracies and put them together and you get the Ferrari of handsets. Oh, sure.

    Even under the best of circumstances, this would be a 10-20% probability. Both are looking to the other to perform life support services.

    Prediction: two years until utter failure. Can you say it NOK-Kin.

    • Well, if they had a solid combined team, it might just be the ticket. But how many of such caliber people are left in either companies or out in the market not working for Google or Apple already. It is going to be a difficult search. But the teams has got to be started soon and worked like a machine it should be building.

      Still, if this venture fails, Nokia can try to work with HP for WebOS licensing which would possibly make a 3-way battle we would all like to see. (Yeah like desktop: Win vs OSX vs Linux)

  6. Claire at Nokia,

    Thanks your comments. So you may be wondering why we (Nokia) entered into this relationship then?

    Well, we believe the planned long term strategic partnership with Microsoft will enable Nokia to innovate and differentiate, and build a new global ecosystem that creates opportunities beyond anything that currently exists today, offering a serious alternative to the existing choices for operators, developers and consumers.

    Windows Phone is a next generation platform that has captured the attention of consumers, developers and operators, with 90 percent of current Windows Phone 7 customer saying they would recommend it to others.

    Together, Nokia and Microsoft plan to bring a combined services portfolio covering location, search, entertainment, social, advertising and commerce, with a fantastic opportunity to create new experiences through the integration and combination of core services assets.

    We are fighting back in this competitive environment we have found ourselves in, and we look forward to the fruits this relationship will bare for both Nokia and Microsoft.

    • Bluemarlin1402,

      Next generation platform??!! You've got to be kidding! The next generation will be Apple iphone 5, your current generation doesn't even have copy and paste. So in reality, you're operating in generation -2 years; and you don't even have a launch date for Nokia/Windows phones.

      You're next generation is Vapor. If I were you I'd be looking for a job with a company that has a future.

    • Joseph Futral,

      I don't know if this was legit or not. It was pretty funny if not. I'm sorry if it was.

      If it was legit:

      "Windows Phone … has captured the attention of consumers, developers and operators"

      The same way a car wreck does on the highway.

      Good luck all the same,
      Joe

    • Poru,

      with 90 percent of current Windows Phone 7 customer saying they would recommend it to others.

      What did the other one say?

      More seriously, if "Claire at Nokia" is real that comment is the most pathetic bunch of PR rubbish I've read in ages.

      • @n13,

        Indeed – we can only hope, for Nokia's sake, that "Claire" is a troll.

        Because if not, that company is in very serious trouble.

      • Peter02l,

        90 percent of current Windows Phone 7 customers are Microsoft and Dell employees, and they would love very much to keep their jobs.

    • althegeo,

      90% of current Windows Phone 7 customers work at Dell or Microsoft and were given Windows Phone 7 phones by management along with a prepaid contract.

      I join the 90% chorus. I recommend all employees everywhere get a free smartphone from their boss.

    • Martti at Nokia,

      All the Symbian and MeeGo staffers are so excited by the news, they are currently staging a walkout! Won't you join us?

    • Tatil,

      PR speak aside, yes, Nokia switched to WP7, because it needs a platform, not just an OS. Unfortunately, it will be Microsoft's platform. If it succeeds, MS will be the one reaping the rewards. There will be other companies with WM7 phones and maybe tablets. MS will be the one earning money from media and app sales, in addition to the first party software titles such as Office or Project with the full advantage of knowing what will be included in the next version of its own OS. It will also have the option of making its own hardware, just like it did with Zune or Xbox.

      • jehrler,

        Exactly. Why didn't they partner/combine with HP and use webOS so Nokia can be the exclusive phone provider *and* have a worldwide PC company to roll the tablet.

        THAT would have been something amazing.

      • Nokiosoft,

        Because Elop is a Microsoft mole

    • Good because where I'm sitting it looks like you lost your CEO and got a MSFT droid in his place, who, naturally, immediately pledged the company to MSFT. Frankly, your board should have him summarily executed.

      • trzykroki,

        Well, Elop being a MSFT droid was exactly the reason that Nokia board employed him. I'm not sure why they should fire him now. It's more a case of shareholders who should fire Nokia's board.

    • baj7777,

      the … strategic partnership with Microsoft will enable Nokia to innovate and differentiate, and build a new global ecosystem? What non-sense.

    • Marcos El Malo,

      This move actually makes sense for both companies, although whether it will succeed is another question entirely. Let us not forget that the market for smart phones is WORLD-WIDE, and that developing countries are a large part of that market. This is Nokia's stronghold. Microsoft has great brand recognition around the world.

      The proof will be in the (eating of) the pudding, but this really looks like the best option Nokia could have taken, and it's a very good move for MS, whose WP7 numbers have been disappointing. Best of luck to them both. Competition is good.

      (I'm an iOS lover/iPod Touch owner. I'm trying to look at the market clearly and without platform evangelism, which is why I adore this site.)

      • Shazback,

        So, bank on Microsoft and Nokia's worldwide image… But how do you do that when WP7 is only available in 5 languages? Are the two lovebirds expecting the Chinese, the Indonesians, the Japanese, the Russians, the Brazilians and so on to just "deal with it" and gobble up WP7 in English?

        What's more, development schedules for new language support will be at Microsoft's pleasure, as there's no way in hell they're letting people from Nokia into it. So, Nokia's efforts in the developing countries will be… alone? With Symbian/Meego? For how long?

      • It makes better sense than Anrdoid, but that doesn't mean it makes sense.

    • KenC,

      Of course it was meant to be humorous, Claire wrote, "bare" and not "bear". Maybe she meant a naked fruit after all? Either way, it was funny!

    • rickst29,

      Unlike other replies, I'm not going to fling insults. I have a question:

      You say that this partnership enables Nokia to "innovate and differentiate". More rapid innovation I understand, being a bit involved (from the outside) on the difficulties of implementing new hardware into both X11 *and* Qt.

      But how does this agreement allow Nokia to differentiate, in a competitive way, against other Microsoft "strategic partners"in WP7, such as HTC?

      My thanks, in advance, for your reply.

    • giromide,

      "We are fighting back in this competitive environment we have found ourselves in…"

      You mean the environment that has existed since January 10, 2007, when Steve Jobs put on display the future of mobile computing, nay, the future of all computing? Android development immediately shifted from keyboard-and-trackball input to touch input. Everyone else laughed at Apple. Who's laughing now?

      • When I picked up my first iPod in the early part of the noughties, when I was a Nokia employee, I thought to myself "If these guys ever make a phone we're f—ed". The one thing that struck me was not that the UI was better, but that it was quicker. Symbian at the time had such frustrating latency.

    • Dopey,

      See, Claire? Nice words, but even your loyal customers don't believe in this. Dumping Symbian was a necessity, but replacing it with WP7? Are you guys drunk?

      As a developer I cannot see a single thing that would be better with Windows. And developers are the audience you constantly seem to dismiss. Developers are the reason why App store and Android market are doing so well.

      You were on the right path with Qt and Meego. Until now. The "Qt everywhere" strategy is gone with the wind, and you are locked to Microsoft development tools, which most of your potential application developers hate deeply.

      • Martin H,

        I disagree on dumping Symbian being a necessity. Symbian remains Nokia's strong point. Instead Nokia's gigantic mistake in the past was to think that the Series 60 success would go on forever and dumping the far more promising (for the high end phones) Series 90.

        The Symbian/Qt combo would overcome the limitations of Symbian/Avkon.

        The Symbian based Nokia E7 is the best smartphone ever, regardless of OS.

      • To provide a counterpoint to your anecdote, I have never known anyone who used a Symbian phone. Ever.

        Your viewpoint is like that of someone who goes to the same bar every night and believes that's where everyone hangs out.

      • Nokia sold 100 million Symbian based smartphones last year alone. It would be near impossible to not see someone using one unless you lived somewhere where they haven't been for sale such as America.

        If you are indeed American, then your bar analogy seems more apt to describe your current situation than the rest of the worlds.

      • Michiel E,

        I think the N900 is. It's an excellent piece of hardware and Maemo is a much more finished product than Android is. I just wish my Folio tablet were made by Nokia standards and would run Maemo (I am looking forward to Meego, but haven tested it yet.)

      • N900 is a big old tank of a phone, but I loved it for the UI, even if the cruddy apps (a mapping program where you can't save locations?!?!?) were very frustrating.

        Mystifies me why Nokia didn't get behind it.

        You may be looking forward to MeeGo for a long time my friend!

    • Davel,

      I hope nokia is able to get better. They make good hardware.

      It will be a difficult road, starting with the moral of the troops who look shellshocked.

    • Martin H,

      I think it's complete madness of Nokia to go all out MS just when really attractive devices are coming out based on Symbian/Qt combo.

      The Nokia E7 is the best smartphone ever regardless of OS.

      And the Symbian/Qt combo was starting to gain fantastic traction and huge support in the developer community.

      Elop is taking a huge gamble. I hold it very likely that Elop will be sacked within two-three years due to poor performance. Wisely Nokia is keeping Symbian/Qt as a fallback should the MS strategy fail.

      • Noki-Poki,

        It would take 2 to 3 years for Nokia to find out that their Microsoft-Nokia partnership is destined to epic failure.

        Yes, by then Elop would be fired, but would that be enough?

        By then Nokia would be left hopelessly behind.

        By then not only HTC would sell more smartphones than Nokia. By then even the Chinese white-box makers would be selling more smartphones than Nokia.

        And Nokia would be in the same position as Kodak finds itself today – a has-been company.

    • Ben,

      "enable Nokia to …differentiate" … "serious alternative for operators, develpopers and consumers" WTF?

      How on earth does switching to WP7 allow you to differentiate (in any way whatsoever, never mind more so than you could have done with Meego/Qt)? Are you expecting Nokia-only WP7 apps? Ha ha ha.

      Serious alternative? How is a WP7 with a Nokia badge on it a "serious alternative" to a WP7 phone with any other hardware manufactures badge on it? Are Nokia phones going to come in unique colors or something?

    • Thomas M,

      Looks to me more like asset stripping without actually getting something in return. Well, good luck with your strategy, at least I can now stop pestering my Service provider here to introduce Nokia phones.

  7. doidfellow,

    Have anything about WP7 or only about WM? For the sake of completeness include HP or are you too biased to include something that actually worked?

  8. Jef,

    Bing is still shipping on Verizons latest Android phones like the Samsung galaxy S…..but everyone wants to install google search anyway it seems.

  9. hoomy,

    Not forgetting the (almost) partnership with HP this time last year for the Slate tablet…

  10. SlothropRedux,

    @Claire at Nokia – the second sentence of your comment is practically indistinguishable from the quotes throughout this post announcing MS partnerships. And it is equally content free. I'm afraid your comment does more to confirm the criticisms in the article rather than challenge them.

    OTOH, I don't think anyone wishes this partnership ill. It would be a good thing to have a robust WinPhone7/Nokia smartphone market competing w/ Apple and the various Android handset makers. Consumers would certainly win.

  11. pesc,

    Psion!
    Pioneers in mobile computing. Developed the EPOC software platform. In the late 90ies it became "evident" that future mobile devices would be powered by Windows CE. So they sold off EPOC which became Symbian, and turned to Microsoft for all their software platform needs,

  12. Rob Scott,

    I though KIn is a better fit for Microsoft/Verizon. It is a phone that runs a variant of Microsoft mobile OS, it was supposed to revolutionize feature phones and it was discontinued in two weeks.

  13. George P,

    So lets go a bit further back and talk about PlayforSure and the vendors who got left behind on that effort. MS eventually rolled its own with Zune device and store. Ok lets go back a bit further, Apple and early Office getting abandoned with Win95 and MS Office 2nd class or worse products, IBM on OS/2, or ….

    Apparently, learning from history is not a Nokia hallmark, at best it becomes a commodity vendor, HP, DELL, [and a long line of bankrupt PC partners], who will end up like HP and DELL going for their own OS: WebOS or Android/Chrome.

  14. Danger did well with Microsoft's help too.

    One can only hope that Elop stays in Sunnyvale and engineers in Finland have a good skunkworks MeeGo project hidden away over the next year for when the wheels come off the Microsoft wagon that Elop has tied Nokia to. Utterly disgusted with Elop.

    • asymco,

      The way it's shaping up, there won't be any engineers left in Finalnd. The Labor Minister anticipates 20k layoffs in R&D, and he should know. Negotiations have been underway.

      • Sander van der Wal,

        Well, then there is some justice in the world. This will sound very harsh, but if these people are the software engineers that created this mess in the first place, by designing the awfull mess that is S60, by delaying the rollout of Qt for a year because they were stupidly putting two different UI's on top of Qt, by not understanding that memory leaks in the Qt library makes it useless because Qt apps will not pass Symbian Signed, and for a million other reasons, then they get what they deserve.

      • That is grotesquely unfair and incredibly offensive. This is the fault of poor strategy not poor engineering. Shame on you for that comment!

      • asymco,

        I've never known failure of a technology strategy to be attributable to bad engineering. Failure can always be traced back to bad management.

      • dr. Dre,

        Wise words.

      • Sasparilla2,

        Very true…

  15. jehrler,

    Hmmm, maybe with the fall in Nokia shares, HP should be looking to pick up Nokia and combine their hardware with the WebOS.

    That would create an iOS combination with a credible tablet company (HP) and a credible phone company (Nokia). AND an incredible collection of patents!

    • With a NOK market cap of just $35 billion, that's kind of a neat idea.

      • It is!

        Would that be the biggest deal this century?

        HP have around 10B USD in cash. So the stock would have to fall a lot further for this to work out. They're not going to take debt to do it, but I guess they could carve out NSN for something (although I think Nokia has been trying to divest that for a while now). Nice idea though.

        Of course an even more logical idea would be for Microsoft to acquire Nokia. Oh wait. That already happened, for 0B USD…

  16. jehrler,

    oops – meant iOS-like combination

  17. Dick Applebaum,

    I don't know how this will play out for Nokia…

    But I see a significant advantage for Microsoft.

    It gives MS leverage over the handset makers currently using Android.

    These handset makers must consider the possibility that WP7 could be on the largest number of devices (dumb, feature and smart phones as well as tablets, etc) within 2 years.

    Can any of these manufacturers afford not to have players in the game — that could possibly be the next market leading mobile OS.

    I don't believe that WP7 will dominate, but then I am not a mobile device maker — it is no risk for me!

    • handleym,

      "These handset makers must consider the possibility that WP7 could be on the largest number of devices (dumb, feature and smart phones as well as tablets, etc) within 2 years. "

      Everyone making these and similar claims (eg Nokia supplies phones to the masses of the developing world, etc) does not seem to understand that the point of business is ROI, it is not to be "number one" in some abstract sense. Nokia is doing a great thing for the poor people of the world in producing cheap phones, but that is not why shareholders buy their shares and why banks lend them money.

      So what we get out of this is
      – a high-end platform that is apparently inappropriate for Nokia's low-end customers
      – a high-end platform that is not good enough for Nokia's high end customers
      – MS get's the ability to track the desires of the oh-so-profitable Africa and poor Asia customer segments

      I'm somewhat at a loss as to how this is a win for ANYONE.
      Is MS planning to dumb down WP7 to fit on $30 phones? If not, then it doesn't have much relevance to the volume part of Nokia's sales. And you seriously think they can do a better, faster job of dumbing down WP7 (or making it straddle high end to low-end) than Android can do, given that the Linux crowd have been dealing with this sort of "stretching" for years?

      The problem Nokia has is that they are a low-end manufacturer that wants the glory and coolness of being a high-end manufacturer, with none of the skills this requires. This is inevitably going to end in tears.
      As they waste time dicking around with grand visions of how they will bring Twitter, Facebook and Windows Mobile Live Mesh Sync IV WhateverIt'sCalledTheseDays to the masses, companies that understand WTF they are doing and are not ashamed to make low-end and ONLY low-end phones, (probably Chinese, but we may get a surprise from India) will be stripping down Android to fit on a $30 device, and stealing their lunch.

      • Iosweeky,

        Assuming that all nokias smart phones will be windows phone 7 devices within 12 months, then we truly are in a 3 way smartphone operating system battle. I wouldn't be too surprised if Microsoft ended up buying nokia.

        This is actually great news for apple, as one major competitor for developers attention (android) now becomes 2 competitors. That may sound like it would be bad news for apple, but I think iOS will maintain it's marketshare (if not grow thanks to iPod touch & iPad) so developers are likely to develop for iOS first, and then developers will have to think hard about whether or not to develop for 2 more platforms as well (whereas now the decision to aditionally develop for just android is easier to make from a resources perspective).

      • > "This is actually great news for apple, as one major competitor for developers attention (android) now becomes 2 competitors."

        '2 competitors'? Maybe next year. Get back to us when NokiaSoft ships product.

        By the time Nokia has viable WP7 product, Apple will have introduced iPhone5, iPad2, a new iPod Touch, iOS 4.3 (or 4.4), plus maybe iPhone Nano and iPad Mini. Likewise, Google will have released two or three new versions of Android; their licensees will be selling (conservatively) 25-30 new smartphone models, plus a dozen or so new tablets. And Google will likely be activating >500K Android handsets every day. I won't even guess at how many cool, new games or applications will be released — and, more importantly, grabbing consumer eyeballs via tech reviewer headlines — for Android and iOS.

        Meanwhile, MicroNok will still be sweating the pre-intro details on their first install of an unpopular OS that many reviewers admitted, 'feels like it is one year behind the competition.' Best of luck with that, fellas.

  18. Tim van der Leeuw,

    Please do mention HTC as well… The only ones who haven’t suffered terribly from their MS partnership, but look at what’s their biggest strength nowadays… ;-)

  19. The Crypticum Keeper,

    words fail me.

  20. cbstevek,

    "…we look forward to the fruits this relationship will bare for both Nokia and Microsoft."

    I assume you meant bear as in 'bring', not bare as in 'expose'.

    Then again…

  21. Omar,

    I am also interested to see how this new partnership between Microsoft and Nokia will pan out. Microsoft certainly has the unlimited cash flow to forcibly push windows phone 7 to celebrity status in both the consumer and business world. I think we should all be careful and not take this new deal lightly. I mean, look at xbox360, they spent millions on that project for it’s first 4 years without making a profit into making it almost unseat all other consoles.

    • Poru,

      Can someone (Bueller?) get us some actual data on WP7 sales? This is anecdotal from the mini MSFT blog but doesn't bode well:

      Anonymous said…
      I work for a telco in Australia. Two things:

      1. Sales of WP7 phones have been shockingly low. We knew WP7 had an uphill battle, but these phones just aren't selling.

      2. The WP7 phones that ARE selling? At least half of them are getting returned. "Too hard to use, no apps, look just give me an Iphone 4 please".

      Tuesday, February 01, 2011 5:04:00 PM

      -http://www.blogger.com/comment.g?blogID=7555958&postID=1212315859284992697

      NB those who want to understand the MSFT culture (FWIW) would do well to read mini and esp the comments from the 'softies:
      http://minimsft.blogspot.com/

      • @n13,

        Not surprising. There just isn't that much room for many different platforms:

        iPhone and Android are, alternately, Windows and Mac OS. WP7 is Linux – except without the open source enthusiast support.

        Palm will have it equally hard, but at least with WebOS we can see how it's actually better than Android/iOS in some ways. With WP7 we see something that's slightly inferior. There's simply no reason to get a WP7 phone.

    • Niilolainen,

      Nokia doesn't have 4 years. Microsoft might have other legs to stand on (Windows, Office…), but Nokia just bet the farm

  22. Edwin,

    Excellent observation! It's kind of like being a content partner with Apple.

    • r.d,

      Only people bitching are newspaper publisher wanting subscriber info.
      and free ride. what's the matter Web not good enough for them.

      Facebook just blocked Google ads, go yell about then we will see if you know the definition of antitrust.

      I don't see movies, music, book, app publisher crying all the way to the bank.
      NBC yanked their shows, how come they came back.

      • Edwin,

        It's elementary. If I sell my stuff with an Android app, I can keep all the proceeds, if I sell it with an iOS app, Apple takes 30% off the top. Why didn't Apple make this clear to people when they first accepted their commerce apps? Because Apple screwed their content partners (also see record companies and iTunes).

      • ______,

        I don't see how they screwed record companies with iTunes? It literally saved them from a failing distribution model and declining revenue. It's just a bitter pill to swallow when you realize that you haven't paid attention to consumers and now a third party has you by the balls.

        Screwed their content partners; is that why NBC came back after 'pulling content' from iTunes?

        Quit whining and perform. In the long term, the person with the most valuable contribution in the chain controls gets the lion's share of profits.

        As for Android, agree with you on a per app basis but in reality that is a false comparison. A tool used to win a worthless online argument. You have to consider the total ROI when you write a quality app. Compare that, in aggregate, for both platforms. A fair comparison will show that for the resource constrained outfit with a quality app, iOS will win. Android is an expansion strategy.
        WIth the Mac App Store, Apple has done even more for small dev outfits. See Pixelmator.

      • asymco,

        If you sell an Android app through the Android Market Google takes 30% as well. Transactions are not cost free. Developers of software (apps) receive 70% of the application price, with the remaining 30% distributed among carriers (if authorized to receive a fee for applications purchased through their network) and payment processors.

        Apple's store is run at break even.

        Your comment indicates you have no grasp of content commerce.

      • trzykroki,

        And of course if a developer has to distribute and bill his application by himself it costs him nothing? I'd say that App Store functionality making all users update apps in timely manner alone is worth those 30%, by sparing servicing bug reports.

      • laserbeam,

        Don't forget credit card processing fees. Also when you start collecting credit card numbers, your site becomes a target for professional hackers, so you need a serious investment in security.

      • If you collect through a third party like PayPal or Google Checkout or Sage then the credit card processing happens on their site and it's they who have to do the security and PCI compliance. Of course it costs extra to process that way but it may outweigh the costs of PCI compliance and security.

        PayPal for an example is 3.4%+20p here in the UK. Less if you've lots of sales. If your app is 79p then that may be significant of course but that's your own stupid fault for undervaluing your work.

      • laserbeam,

        31% of App Store applications are $0.99, another 12.5% are $1.99. You can't dismiss them all as stupid.
        http://148apps.biz/app-store-metrics/?mpage=apppr

      • I can. :)

        The race to the bottom has brought about some awful software, full of advertising because developers aren't earning enough from being paid normally.

    • Synth,

      Yes, I'm sure Google will set up a web store front for Sony, now that they are ticked at Apple, and not charge them anything for the privilege.

    • handleym,

      What do bricks and mortar retailers charge content providers, once stocking fees, shipping, returns, etc are taken into account? Is it honestly less than Apple's 30% cut?

      How about Amazon? I could imagine Amazon charges less than Apple, but I'd be surprised if Best Buy does.

      • J Osborne,

        Depends on what kind of retailer, and how many wholesalers are in the picture, but it can go over 50% for some items, and be fairly low for others. Boxed software tends to be over 30% at least for the $30-$40 boxes. Some of the price isn't a straight percentage, so a $500 package works out at a lower rate. $5 software boxes are not really possible at stores.

      • addicted,

        Yup…The OP is just trolling. Amazon charges their publishers upto, and often over, 50% for the content they push to the Kindle. It was only recently they reduced it to 30% in response to Apple's moves.

    • Gianni,

      good point ! Concur !!!

  23. symbolset,

    @SlothropRedux Speak for yourself. I for one wish both of these two ill now that they've joined forces.

    Concur with the "Sendo should be in this list". Also in the Verizon block mention should be made of the Kin – and Sharp, who made the KIN should be added. Actually, this should be a much longer list. HP used to make phones with Windows Mobile too.

  24. No One,

    And you forgot Sendo: http://www.theregister.co.uk/2003/01/06/microsofts_masterplan_to_screw_phone/

    Danger employees would also list Danger, but at least that one was bought and paid for, not _just_ screwed.

  25. Azazello,

    I am not exactly proud of Schadenfreunde but when I met my wife in 2007, I bought her an iPhone as one of my courtship gifts, suggested to reshuffle her retirement investments, and on reading Nokia exec’s dismissal of Apple’s little gem gave her an eBay Xmas gift (among others) of a pair of original Nokia brand 60s rubber-boot liners…
    Cheers!

  26. Luis Masanti,

    Although not in the cellphone market, it would be worth to note the "alliances" between Apple and Microsoft.

    The first, prior to the launch of Macintosh, in which Microsoft copyed the UI.

    In the 90s, when Adobe's postscript fonts were too expensive, Apple developed TrueType and Microsoft should develop the TrueImage Postscript replacement… The last, never happende. The first, are in all Windows machines.

    In last Boston's Macworld, 1997, they made a new alliance in which Microsoft will continue Mac Office developement by 5 years… Apple began developing Mail, Safary, Pages, Numbers, Keynote…

    Apple learns from its past!

  27. jehrler,

    Hmmm, the more I think about this the better and more devious the purchase of Nokia by HP would be.

    First, as mentioned here before, you get a single OS that scales from phones up to PCs (according to the latest presentation on webOS by HP). You get worldwide name recognition and economies of scale. You get a worldwide PC/Tablet brand and a worldwide phone brand. Plus an amazing patent portfolio.

    Second, you throw TONS of cold water on WP7. Instead of being in the running by adding Nokia, they are now back to an also ran.

    Third, you catapult webOS into the first tier where people mention iOS and android.

    Fourth, it gives both HP and Nokia a greater shot at being in control of their own destiny (ala iOS).

    Fifth, you now have the scale to do something neither Apple nor current android phone companies can — roll out a range of phones like android but do it on your *own* platform like Apple.

    Sixth, you will have "Nokia" webOS phones ready to go in no time as you just rebrand the coming HP ones.

    Seventh, Microsoft can't really rush in and try and buy Nokia because, if they did, there current WP7 licensees would bolt and they would be left with NO new phones until Nokia finally gets around to rolling them out. And, even if they did follow this course, it would still turn WP7 into an also ran and give HP a shot to jump into the first tier on their own.

    • r.d,

      HP would be paying all that money just to control
      the hardware patents. They can already use Xt if they wanted it.
      It seems they want HTML5 and Javascript as their platform.
      It will be slower than Java. HP may get user base but Nokia
      just abandoned them or put them low cost phones.

      At one time HP had their own Unix, they abandoned it for Linux.

      • jehrler,

        I don't see it that way (obviously).

        What they are getting is scale and a worldwide partner who knows phones and carriers. The problem companies are having competing with Apple right now is that Apple is emptying the supply chain and able to command rock bottom prices due to their commanding presence.

        With Nokia and HP together they would be able to work over suppliers and have a worldwide outlet for their phones (and tablets). Right now, with HP on its own, it is never going to be a high volume player.

    • ______,

      Just how would the economics work? Nokia is still valued highly in absolute $.

      • jehrler,

        Basically a modern leveraged buyout where you line up the financing based on selling off the non-telecom portion of Nokia (and possibly the infrastructure telecom pieces).

        All though they were all the rage in the 80s they are much less common now *but* the key is if you can convince lenders that you are able to unlock real value.

        Based on my comments, you can see that I think there is real tangible value that a match up of HP and Nokia would unlock in both companies. Though I hate the word, it would be real synergy.

      • Niilolainen,

        I don't think that HP shareholders would be happy about taking on all that debt, even if they could sell of NSN and Navteq, would still be tens of billions of dollars.

        Given post-crash climate I don't anybody would lend them the money either, regardless of whether you buy into the possible synergies

  28. Sergio,

    I've got very mixed feelings about this.

    On the one hand I think it's good that Nokia recognises the cold hard truth (or burning platform if you like) – in the last two decades they've produced some sexy phones, but they've been utterly unable to produce sexy software for them. They are not going to start doing it now by divine inspiration, they need someone else to do it.

    On the other hand I concur with other comments, at face value it looks like Microsoft is getting the better part of the deal. They've got very little to offer in the deal (an as yet unproven OS and a dubious mobile software track record) while Nokia puts decent hardware expertise and a huge customer base. That would lead me to think that Nokia should have the biggest say in this relationship to start with, to genuinely guide WP7 and turn it into a good fit for Nokia's phones, but I fear it won't be the case.

    We'll have to see, but it's clear that Nokia has the most to lose if things go wrong. And let's not forget, the 20,000 Nokia employees that are said to be on the line are already net losers.

  29. Synth,

    Two dinosaurs mating.

  30. Greg,

    "We'll have to see, but it's clear that Nokia has the most to lose if things go wrong. And let's not forget, the 20,000 Nokia employees that are said to be on the line are already net losers. "

    Yep. And that's the biggest problem. You've just told your entire software team that their work is junk. Good luck in maintaining Symbian long enough to make the shift to Win7 :-)

  31. xenon10,

    Well, let's see who partnered with Apple what did they get? AT&T share price today is lower than it was before the partnership, VZW has a lackluster start in their new partnership as well. How about the music companies collaborating with Apple to sell music through iTunes. EMI is bankrupt, Warner is up for sale. BMG was saved by Bertelmann. AAPL benefitted the most from all their partnerships, didn't it?

    • IUme,

      Actually, Apple partnered with Cingular, which joined with AT&T. Apple got in thru the back door. Also, AT&T's network problems are their undoing.
      The ITMS is a small cog in the Music Business wheel, compared to the brick and mortars and other online ventures. Apple offered them a solution to the rampant piracy that was taking place at the time and they half accepted it. Their business model is what is driving them bankrupt.

    • noogie60,

      As with all postulating, let's consider the scenarios
      What would AT&T's share price today be if say Apple did go with Verizon initially? It would be fair to say a lot lower than today.
      Music companies – I've never seen an industry (except for maybe the MPAA) who despised and were at war with their customers as much.
      If you want to see the pinnacle of evil – of making your partners bend over and take it – look at the antitrust trial documents and see what Microsoft did to their OEMs. It makes everything else seem lilywhite by comparison.

    • Davel,

      Actually if u look at ATT the have acquired new wireless customers at a higher rate than their competition. This forced verizon to hook up with apple to blunt ATT.

      For all it's faults ATT is actually doing pretty well.

  32. Steko,

    They could have a cute little dinosaur mascot.

  33. Tomi T Ahonen,

    Hi Horace and readers of Asymco blog

    FANTASTIC review down memory lane. Truly great, thanks! I will be writing a deeper analysis of Nokia (next week, when am more over the shock) and will link to this. BRILLIANT. Thanks!

    Tomi Ahonen :-)

  34. John Fro,

    Synergy never happens. It's a life raft for upper management only.

  35. jonkey,

    It should be pointed out that Motorola later failed hard, divested this CPU division (Freescale) and now divesting its phone business. Even more important, Microsoft sued Motorola recently with software patents, and case is still in process.

  36. Vatdoro,

    Check out Elop's interview video. http://video.allthingsd.com/video/nokia-ceo-on-ch

    He says they're "betting on each other". *Huge* bet by $NOK. Tiny bet by $MSFT. Thats a one sided "bet".

  37. hawkeyeaz1,

    Moral of the stories? Microsoft bites, drinks the blood, and leaves carcasses behind. And Microsoft says/said Linux was a "cancer".

  38. Horace, stick to presenting the facts backed up by numbers. You've done an awesome job of that. Selectively presenting history to fit a distorted narrative doesn't suit you.

    Microsoft is trying to establish a mobile software platform. Of course it is going to have many partners. And those partnerships will have varying degrees of success. Motorola's trouble had nothing to do with WinMo (tiny fraction of their business), and the Q was the fastest selling phone at one point. HTC built their entire business on Microsoft software before hedging with and then jumping to Android.

    Aside from Sendo and HTC, there isn't a single example on your list that wasn't a hedge of some sort for the other party. There's no doubt in hindsight that its a line-up of shitty deals, but anyone who discounts Microsoft's ability to keep on coming is foolish.

    But I suspect you actually understand the significance of the Nokia-MS deal. Well done on the post. I'm sure you'll get a lot of traffic.

    • three_pineapples,

      HTC may have built their entire business on Microsoft, but business wasn't exactly booming. Since the switch to android, they've reported record profits and market share.

      This is not because android was popular and they jumped on the bandwagon. HTC *made* android popular by producing amazing hardware to go with the amazing software. They showed what could be done, and many people still think (myself included) that the HTC android handsets are of a much higher quality to those produced by Samsung and Motorola.

      It should also be pointed out that HTC is only now producing WP7 phones because they don't want a patent fight with microsoft, who believe android infringes some. Effectively MS is trying to stay afloat on the threat of software patent litigation. It won't last, and I imagine HTC would much prefer to stick with android only, if they could, given android has finally come out with the tools needed to be successful in the enterprise market.

      • I agree with most of this. Particularly the part about HTC adding a lot of value to the Android ecosystem. They have fantastic engineers and are building a great design team. They are struggling to build a consumer facing brand though.

        I do think that HTC is glad to have the WP7 hedge after the Nokia announcement.

    • asymco,

      I spent a few years in the role of Microsoft Analyst at Nokia. These are some memories that came back to me from those days. I was not selective. This is what I remember (and could find the press releases to quote). If you can remember other "strategic deals" involving Microsoft in mobile, feel free to let us know. I did not list every licensee since there were hundreds. I was trying to find press releases which described a "strategic deal". It's an amazing coincidence how they all turned out so badly.

      I put these out because perhaps readers are not familiar with this history. Strategic alliances seem to be easily forgotten.

  39. anon,

    @Claire –
    You are in marketing, right? You managed to string a bunch of words together without saying anything. I note MS started out selling about 35,000 WP7 licenses a day, and are now selling about 10,000 licenses a day (source – MS statements on WP7 sales figures, divided by days). Not exactly a great upside here showing a growing market for WP7

    @Jehrler –
    You talk about a single OS running from mobiles to PCs. You realize Android is powered by the Linux kernel, and thus you have a single OS running from mobiles to 450+ of the world's supercomputers?

    If Nokia is going to outsource their smartphone OS (which is what they are doing here), they need to be able to differentiate, and to keep costs low. Android fits that bill. MS WP7 – unless Nokia got a waiver, they are now just another of those who make WP7 phones.

    • jehrler,

      The problem with android (and like WP7) is that it is not an os that Nokia can use as a differentiator. Unlike iOS and webOS, they would be relying solely on hardware differentiation with other licensees.

  40. Peter D,

    I would also like to add Sierra Wireless to the list. They released the Voq smartphone using Windows Mobile and took a frightful bath. I don't know whether MSFT can be completely blamed or if Voq was just too expensive. I loved the design of the Voq with a flip out QWERTY keyboard and a tiny, very functional joystick, but the OS SUCKED DONKEY BALLS.

  41. robert,

    Apple partnered with Microsoft in 1997 when it was on the bring of bankruptcy and it worked out fine. :)

    • Rob,

      Correction – Apple settled with MSFT on a legal action – did not partner.

    • Waveney,

      Yeh… so true. They only had $1.2B in cash in those days.
      I'm surprised you omitted so many fun memes…. ;)
      'MS saved Apple with $150M' is the one I never tire of hearing.

      • Davel,

        As the poster above said it was a cross licensing suit. A long time ago apple made a bad contract regarding ui. This allowed msft to copy apple, like the trash can.

        Yes the money helped save apple, but it also helped msft with anti trust arguments. Apple ultimately saved itself by slimming it's product lineups, using nextstep as a base, an infusion of new engineers, and ultimately the iPod.

        All of the above of course was done with the guiding hand of Microsoft( sarcasm in case anyone missed it).

  42. Faye,

    I don’t think this corporation can make them better!

  43. Larry Brown,

    Don't forget M$ and the T-Mobile Sidekick. The result: millions of Sidekick users irretrievably lost their data, that is all telephone numbers, all contact info, all personal notes and memos, when their "backups" on the cloud were lost and could not be recovered. Where was the cloud? Undisclosed by T-mobile to their users (for obvious reasons): the cloud was on Microsoft servers. Microsoft was given THE BOOT.

    I can see how Nokia had limited options. Partnering with Apple was probably attractive but not possible (Apple uses only their own hardware). Partnering with Google was possible but not all that attractive (too many Android devices already, no niche for Nokia). Doing their own system did not seem to be working. But M$ is a guaranteed failure and besides, there's plenty of WinMobile devices floating around already, especially from HTC. They should have gone with Android. Better to be an "also ran" than an "utter embarrassment."

  44. Joe Average,

    Hopefully Nokia understands to make engines so that they can ship products with different OS, save the license cost if possible. ..just in case buyers prefers something else than "primary" selection..

  45. This deal is like nokia trying to sell rubber boots powered by microsoft. Sent using an android phone~a real smart phone platform.

  46. Alberto,

    Thanks for the telling history.

    Here is another data point for the history books:

    Mr. Elop's MSFT announcement on Friday wiped out $6 billion of Nokia's market cap in one day. A remarkable feat.

    The executive committee of Nokia's board of directors are probably scratching their heads this weekend.

  47. Wilhelm Reuch,

    But what if Nokias problem is not Symbian?

    Stop for a while and look what hardware Nokia have on offer. No brand. Just a mass of plasticky fugly phones with no names – just numbers.

    Nokias target seem to be the operators/carriers. Just like Android and its army of noname-phones. But the Android-army has apps. WP7 has few – and very few of them are 'hits', the ones that people like to show their friends.

    It *is* about the apps. But not about the number of apps. It is about the quality and creativity of the ecosystem. Apple has always been good with this – even during the hard and dark years in the 90's the innovative and creative developers were drawn to the Macintosh.

    Will this work? WP7 needs a lot of love and work to attract the innovative developers. Microsoft used to be good at this particular mojo but lost most of it about 10 years ago. I have tried WP7 a few times and it always feel flat/shallow. Nokia must clean up their hardware and create the perfect platform to serve and run these apps.

    On the other hand going with Android would have been a sure way to zero-margin-land. With WP7 there is at least some hope.

    • Martin Harnevie,

      You're correct. Nokia's problems were never Symbian. But they must blame it on something. They can't blame it on Series 60 either because this UI came from Nokia, not from Symbian.

      Nokia discontinued Series 90 to save some R&D money. Series 90 would have help a lot in the new touch-screen wave.

    • Sasparilla2,

      I’m not sure going Android would be zero-margin land for Nokia. As long as they could differentiate themselves from the other OEM’s (and they have shown they can easily do this, whether its pure design, their own software engineering, or hardware / camera prowess) they probably would had carved a huge chunk of the Android market out for themselves.

  48. Neonzebra,

    This is definitely a Hail Mary move by Nokia, but you don’t make these kinds of plays unless you are out of options. WP7 is pretty much the only game in town for Nokia. Android is already suffering from serious fragmentation, which makes it less attractive as an ecosystem. At least Microsoft *seems* to be serious about controlling the user experience.

    With WP7, Nokia gets a decent OS and ecosystem support. I could see them positioning themselves as the “Best” Windows 7 Phone maker (ie: most expensive and therefore most profitable).

  49. Riev,

    MeeGo and Qt is future. But Elop is Microsoft's trojan horse.

  50. SadNokian,

    Replacing Symbian was needed, that's for sure, but WP7 ??? , Nobody buys it,

    Not developers ( who still needs to wait around 1 or 2 years to see the first devices , and nobody ensures will not have the same quality problems as previous Symbian phones ),

    Not employees as the platform is lock down, and the ecosystem is already defined and ruled by microsoft, create and develop an ecosystem ( ah ah ah ), oh yes give the location services to MS …..

    Not company innovators, oh yes, i see in the agreement that nokia engineers will have access to the source code and platform technology and will be able to modify it to put it on top, ah ah ah … in a platfom that does not have even copy/paste ….. or usb mass storage , or BT Transfers , or decent camera sw

    The most innovation thing that nokia has is QT/Meego and has clearly canned, engineers clearly pushed down in motivation as a dead end platform.

    More on Innovation ? How are you going to innovate in a locked platform ?, differentiation ?? how are you going to differentiate if you are not going to modify or get hands on in the platform ?. a lot of wishful thinking ,,,

    Nokia needs to do some reaction, that was for sure, but if you are planning to make WP as kind of OEM, there were no need to make such a noise, and shack down all the good things that were starting to revamp in the company. This does not have any sense at all. ( have a look to the official notes in the forward statements parts to see what i am talking about ).

    But hei, not surprises here, this level of management, announcements , strategies and organization changes has been the norm on those years at Nokia.

    The worst thing after this PR disaster , and this earthquake on the company with many unknown collateral damages and equal to unplug the wires, is that a suddenly annuncement that QT will be supported in WP to calm down the waters :P , that is the style ………….

  51. AnonDude,

    You could have elaborated on the Ericsson deal.

    That was MS foothold into the mobile industy, the got exactly what they wanted, IP from Ericsson. Ericsson later abandoned the "cooperation" with great losses. As Ericsson was looking for a partner in the mobile industry, they later went on to Sony instead, creating SonyEricsson, which for several years was very profit.

    The list of IP which MS has stolen is to long to rembember fully. SQL Server (from sybase – which remnants was bought by SAP), Direct3D 7 (from SGI – which went Bankrupt), here's a partial list:
    QDOS -> MS DOS, OS2 -> WinNT, Sybase -> SQL Server, Stacker -> DoubleSpace, RenderMorphics -> Direct3D, Immersion -> DirectInput, Spyglass -> Internet Explorer, NextStep -> OLE/COM, WinCenter -> Terminal Server, Apple OS GUI -> Windows.

  52. Gianni,

    I think the only real question is how much will Microsoft pay for Nokia when it takes over it. Within 12 months, IMHO

  53. Gianni,

    stolen from Twitter: Microsft + Nokia is like the Hindenburg mooring to the Titanic

  54. Davel,

    Horace thanks for this posting. It is stunning.

  55. Davel,

    I want to make 2 points here.

    Nokia's strength is hardware. They obviously needed to do something. Elop made a stunning letter to his company. The company looks shellshocked. It will be interesting if the company can do anything since they gave walking papers to their software guys.

    Microsoft is a software company that has been sleeping since Gates retired. They used to own the smartphone space ( except for RIM), but now are out of it. I think Microsoft is facing two strong nimble competitors in apple and google. I don't know how the hp/palm thing will work out. Microsoft absolutely needs to win in the mobile space as they have nowhere to go in desktops as they own it and there is no growth. Unfortunately for them, they have no monopoly to leverage and win in that space.

  56. The Prince,

    Microsoft = embrace, extend, and extinguish, when it comes to alliances.

    Elop is the double agent – a marionette sent from Redmond; he embraces the weak, desperate, and gullible. He extends promises of profits from WP7. The puppet masters operating from their secret command center in Redmond calculate cunningly: distortion fields emanate from the center, hyping the operators and developers with promise of riches too. The puppet masters estimate their scenarios and hedge their bets. If the alliance works, WP7 gets some life. If the alliance does not work, Microsoft can say they tried, retreating to enjoy their existing cash-flows, extinguishing MeeGo and Symbian as operating systems. Eventually, Nokia crumbles under from invasion from the East, as the low-end troops collapse.

    Machiavelli could not have planned it better.

  57. eFlop,

    > They used to own the smartphone space ( except for RIM), but now are out of it.

    What? Microsoft has never even been a sidenote of the smartphone space, let alone "owned" anything in that area.

    • davel,

      How many platforms were able to deliver features that Apple nicely integrated when they introduced their phone?

      As far as I can tell Microsoft was one of the few. It also had a much larger percentage of that market than it does now.

  58. Steve,

    Not many people know but already in 1999 Nokia was developing a Windows CE phone, it was cancelled because Symbian was considered more strategic and CE was considered too challenging from R&D perspective….

  59. JHarlow,

    Interesting that so many folks comment on events they barely understand. Time will tell, but dont you think people at Nokia have thought about all this already and have come up with solutions?

  60. GuestFromNZ,

    Danger should be on this list – MS brought them rather than partnered.. but it killed them all the same thanks to Kin.

    Claire at Nokia was interesting corporate comment.

    She says: "…innovate and differentiate, and build a new global ecosystem".

    Sorry, but MS forces Win7 Phone hardware standards; just look at the current batch are almost all identical. You can't make super cheap low power e-ink phone for instance and meet MS standards. How can Nokia innovate completely new things when MS controls the platform and can say no to things like a non-Bing search engine? If Nokia gets special rights to modify the OS to suite there hardware, then remaining MS phone makers will pull the plug.. leaving Nokia with no global ecosystem and an operating system used by only one phone maker… until MS decide to use what they have learnt and take it inhouse as they have with the Zune debacle.

    "Windows Phone is a next generation platform that has captured the attention of consumers, developers and operators, with 90 percent of current Windows Phone 7 customer saying they would recommend it to others".
    Source being a small MS funding survey right? Fact is that iPhone and Android have enough loyal owners to make the 'too little, too late' Windows Phone 7 survival somewhat dubious. MS benefits from this deal.. but I don't think they will benefit enough.

    "Together, Nokia and Microsoft plan to bring a combined services portfolio covering location, search…"
    That could have been done with Android as well.

    I predict a year or two down the line, Nokia will release one or two high-end models running Win 7 Phone.. with most sales being met by Symbian, by that time, it will be become very clear to the world that MS is not a player in the mobile phone OS business.

  61. Martin Harnevie,

    I think it's complete madness of Nokia to go MS just when really attractive devices are coming out based on Symbian.

    The Nokia E7 is the best smartphone ever regardless of OS.

    And the Symbian/Qt combo was starting to gain fantastic traction and huge support in the developer community.

    Elop is taking a huge gamble. I hold it very likely that Elop will be sacked within two-three years due to poor performance. Wisely Nokia is keeping Symbian/Qt as a fallback should the MS strategy fail.

  62. Sam,

    @Claire At Nokia

    Claire – this is the fourth blog you've shown up on peddling the same Nokia PR crap.

    Don't you get it? You just lost all of us. So please – allow us to discuss it w/o chipping in with marketing tripe – because we've heard it all before.

    Could I suggest that your time might be better spent updating your resume?

  63. DaveMingChang,

    Reminds me of the infamous "powered by windows CE" that adorned the SEGA Dreamcast :P

  64. O B Server,

    Can't think of any other company (in any industry) with 30+% GLOBAL market share voluntarily giving up their own, albeit ailing systems (Symbian, Meego) and switching to just make hardware for someone else.

  65. Omar,

    This partnership will be something to keep an eye on for the next 3 years or so. I’m interested to see the outcome, let’s give them a chance.

  66. JoeHTH,

    Who knew Horace Dediu had such a hatred and disdain for Microsoft. You learn something new every day.

    • asymco,

      I don't have hatred or disdain for Microsoft. What makes you think I do?

      • Walt French,

        Not to fan the flames of intolerance or anything, but Microsoft seems the prototypical firm that has failed to respond to disruptive innovations for at least 5 years. Why *NOT* disdain?

        Their existing partnership approach seems to have worked extremely well as long as Microsoft had total control of sustaining innovation, but they have now switched models to address the Apple threat. Yes, you don’t panic instantly just because a competitor has a new wrinkle, but failure to innovate rapidly looks to be a major threat to Microsoft’s business.

  67. Daniel Glazman,

    Spring 2003: AOL and Microsoft signed a $750M deal allowing AOL to include IE in their products for 7 years IIRC. Just a few months later, they shut down Netscape, refusing Firefox. AOL has been in limbos ever since.

  68. Nokia can demonstrate successful partnerships, i.e. for networks with Siemens. Also they have shown turn-arounds in very challenging times in the past.

    Nokia´s mobile phone division though has some serious problems:

    (1) The product portfolio and product marketing is chaos. Customers do not easily find their way through all these different product names with strange descriptions. Times have been changing and simplicity becomes key. Nokia still does not seem to be aware of it.

    (2) Nokia´s Hardware is exzellent. I still have the E61 in constant use since 2006! A great smartphone for office work, phone calls, SMS and taking notes in talks (although without camera which I need for taking photos from flipcharts; in parallel i am using the N95, which is of course much better for multimedia, but with bluetooth issues and not good at typing).

    (3) The Symbian Software is not so good. The are two main reasons I think:

    — For years, some bugs have not been resolved, although the issues have been brought up on the web
    i.e. an issue with E61 SMTP authentication to send emails, brought up in 2007, and not yet resolved: http://discussions.europe.nokia.com/t5/Messaging-
    11-May-2009 08:29 PM: Still no fix for this problem, looks like! NOKIA WHERE ARE YOU?
    This seems to be an attitude problem, to respect the customer expectations and fix sofware problems.

    — There are serveral separate software developments for the different product categories, rather than focusing all resources on one powerful software development with constant upgrades and a consequent software life cycle management. So all the resources and efforts dissolve.

    Let´s see. Nokia can beneti from MCST strengths with (1) and (3). But the corporate cultures of Nokia and MCST are very different. They are very late in the game. The risk of missing the future is high. I wish them the best, but it will be very challenging.

    Regards,

    Oliver

  69. syned,

    In 80s Microsoft had made a partnership with Apple. Just before stealing Apple's OS and launching Windows. I know it's not mobile but anyway…

  70. Having had a plethora of HTC WinMo 'phones I can see that you are right – Microsoft platform destroy mobile brands.

  71. Jddavidar,

    Good idea. I hope you succeed. I own a Nokia E62 and was eagerly awaiting the E7 but with the phasing out of Symbian announced, I have second thoughts. Whatever Elop says, it is deceitful to customers who have invested in N8, E7, and the N900. If Nokia does this, who will trust the brand again, especially since it is known for its robust, solid engineering and mature Symbian OS. Of course, it needs polish and pizzazz but it does not deserve to be thrown out to be replaced by Windows! All the best

  72. Volodya,

    I think Nokia should have started by announcing a Windows phone alongside their lineup. Not more not less. But announcing that Symbian is a burning platform (which it is not), some Windows vaporware at an undisclosed horizon, and in the process disenfranchising developers and engineers was imbecile and criminal. At least we now know that they know it was imbecile since they backtracked two days later. Some communication.

  73. smartphones rock,

    don't forget about Danger. add them to the list.

    Meanwhile, Microsoft Buys Danger For $500 Million
    Feb 11, 2008 http://techcrunch.com/2008/02/11/meanwhile-micros

  74. Youri,

    To Symbian nostalgics…
    I own a Nokia Nuron phone. Symbian is not a good OS.
    Sometimes in vibrate mode it does not vibrate. It turns off on its own. Sometimes it does not change orientation when I flip it over. The newest OS update (with no release not) added lag to Doodle Jump. Another update broke mail for exchange; the only fix (from the community) was to reinitialize the phone completely. Customer support on Nokia forums is inexistent.
    The phone is smaller and cheaper than a WIndows Phone and the data plan is $10/month. That's the only thing it has going for it, but I think I'm getting a WP7 anyway.
    Windows Phone is shipping now; Nokia would need months to get Meego ready for shipping. And then it would be a V1 product.
    The whole list is a joke. How many companies did *not* partner with Microsoft and go bust?
    Why does it have to always be Microsoft's fault? I remember in the Pocket PC days, Pocket PC devices suched until HP released the superb IPaq. I am sure the partnership worked well for them. Play for Sure improved interoperability with Windows, but it was hardware vendors' job to build exciting devices. Did they?

  75. GlobalMobulMoghul,

    Hey – what about Dell ? – they had PDA's called "Axim" running Windows CE (I think) – I had one for a while, seemed to work o.k. as long as I didn't try to do any actual work on it – at which point it would choke !

  76. steffen_jobs,

    microkia is d.o.a.

  77. Michael,

    Sidekick? So strategic that Microsoft acquired them.

  78. Ziad Fazel,

    I wonder how much Microsoft paid for the access to RIM Blackberry devices, and how Nokia feels about Microsoft collaborating with RIM at the OS level, deeper than providing apps.
    http://news.cnet.com/8301-30686_3-20059271-266.ht

  79. Skeptic,

    Generally speaking, it’s very interesting how a powerful dominant company can suck in everything it wants from a captive business partner without having to go through a costly acquisition that may be too difficult or impossible due to various regulatory hurdles. This captive disabling “blood sucking” business strategy seems to work well in practice.

  80. Elop is the 7th largest individual microsoft shareholder (according to Finnish newspaper today)

    Seriously, they announced EOL for Symbian, who is going to start development now? Those 150M new sales (dreaming imho) are just there to be switched to WP7, Nokias position is very clear, they are not a partner, but a Microsoft division now. Qt stands for cross platform, you’re a means to an end to convert Symbian users to WP7 but they’d like nothing more than for Qt to go away.

    The whole show with Balmer and the vomit worthy “Steve and Stephen” was a disgrace. I’d like to be optimistic, but I remember the “Qt all the way” chanting not too long ago all too well.

    I am so sorry for what is happening. Qt is such an awesome codebase and its people are the best.

    • lol symbian doesn’t even allow i-app video playback. my company made an app and actually had to wait for symbian to get a new version (waited for several months) and it still didn’t work.

      symbian was a crappy platform. If you don’t believe me, take a symbian device with a 1ghz processor (more then decent for a symbian device) and see how it works compared with a windows phone 7.x device running same hardware.

  81. berult,

    In Memoriam: Microsoft’s old strategic nemesis: Steve Jobs;

    Entre mille poètes du dit et de l’écrit, du rêve et de l’ennui, s’ingère le rare poète de la forme du non-dit.
    Je ne suis qu’un prétendu poète entre mille,  il fut …toujours que dis-je, l’ascète du mille contre un pour le pari…

  82. Walt French,

    Maybe more of a curiosity than a real partnership, but there’s also,

    REDMOND, Wash — Sept. 28, 2011 — Microsoft announced today that it has signed a definitive agreement with Samsung Electronics Co. Ltd., to cross-license the patent portfolios of both companies … Under the terms of the agreement, Microsoft will receive royalties for Samsung’s mobile phones and tablets running the Android mobile platform. In addition, the companies agreed to cooperate in the development and marketing of Windows Phone.

    (Emphasis added.)

  83. JohnJohnson1,

    Symbian is old and crappy but I don’t see how WP7/8 is better. Nokia can’t even customize it and implement all UI goodies they traditionally had in other systems. In fact I consider WP7/8 a complete crapwreck.

  84. wazmo,

    Samsung saw the writing on the wall and decided to cover all of their bases-the ATIV series of WP8 smartphones are non-existant in the US and barely have any penetration in their other markets. Even the Samsung exec’s downplayed the WP8 platform just a few months after they released their flagshsip WP8 device.

  85. William,

    Moral of the story.

    Microsoft has grown complacent with it’s 95% monopoly, thus fooling themselves that everyone loves windows, otherwise why would 95% of global OS’s be based on Windows.

    Then came iOS and Android.

    And now Windows accounts for 35% of the worlds OS’s.

    Ballmer still doesn’t understand, and worst of all, he proceeds to make Windows 8 like the failed Windows phone, in some insane belief that’s going to make Microsoft into the next Apple/Samsung because hey, everyone just LOVES windows, right?

  86. mistermysteryguest,

    The Nokia/Microsoft partnership is the walking dead.

  87. Market has Spoken.

    People hate Tiles.

  88. tuipveus,

    And now Microsoft bought Nokia

  89. John Fro,

    The general problem with this argument is that these companies make strategic decisions w/ everyone else in the business, even their competitors, so there’s nothing unusual about them making deals with MS. The main issue is that MS deals go nowhere, but even that is nothing unusual. These deals are mostly for quarterly investor reports and free publicity. LG also made deals with Verizon and Motorola, but you don’t hear about them in relationship to their business success.

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