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In memoriam: Microsoft’s previous strategic mobile partners

Feb 11, ’11 2:28 PM
Author Categories Industry, Nostalgia

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.

Newer Comments →
  • http://poppe.ratata.fi/ Peter Sjoholm

    Shouldn't Sendo be added to that list?

    • asymco

      Ericsson too. Will update. My memory is not as good as I'd like.

    • asymco

      Then there was SPOT technology and MIRA displays, but who really remembers those?

  • 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.

  • http://standardimagination.com StdImagination

    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.

    • Steve Smith

      Citrix

      • 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.

      • http://standardimagination.com StdImagination

        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).

  • MSFT

    Google buys Nokia and stop free OS model!!!

    • http://maczter.com maczter

      You were close.

  • 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.

    • http://twitter.com/fteoOpty64 @fteoOpty64

      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)

  • 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.

      • http://twitter.com/n13 @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?

      • http://twitter.com/ctown_myth @ctown_myth

        Yes! Good job! Make sure that the top exces and shareholders know that the company is in the soul and sweat of it's workers!

      • http://twitter.com/n13 @n13

        Epic!

      • trzykroki

        Isn't Symbian a lot worse than WM7 from a smartphone perspective? I'm not sure anyone should spend much time listening to Symbian developers.

      • Isa Rahim

        Symbian offers a far more robust and prudent kernel for smartphones. The mistake was instead to use the seriously limited Avkon UI/DE. The Symbian/Qt combo would have overcome this.

      • http://twitter.com/Niilolainen @Niilolainen

        Good luck dude. Go found a startup. Take those MeeGo skills and get into automotive, home connectivity etc

        Finland needs you

    • 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

    • http://twitter.com/JessiDarko @JessiDarko

      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.

      • nordicnurse

        Not nonsense, an oxymoron.

    • 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?

      • http://twitter.com/Niilolainen @Niilolainen

        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.

      • http://twitter.com/Niilolainen @Niilolainen

        I would say Claire started it by insulting Asymco readers' intelligence!

    • 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?

      • http://twitter.com/Niilolainen @Niilolainen

        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.

      • http://twitter.com/jkuss @jkuss

        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.

      • http://twitter.com/aegisdesign @aegisdesign

        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.)

      • http://twitter.com/Niilolainen @Niilolainen

        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.

  • 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?

    • asymco

      HP would be a good example. They licensed WM as well but then bought Palm. Are you suggesting that they had success with WP7?

    • maddoguk69

      Here's an idea: why don't *you* include something that actually worked?

      It's Ok, I'll wait.

  • http://jeftek.com 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.

    • Jonni

      Well, Bing gets (some of) its results from Google. And it's not the only scam they did for Bing..

  • hoomy

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

  • 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.

    • Rafael

      I think your stockholders don't are as optimistic as you with the future of this partnership? 14% down after the announcement.

    • http://twitter.com/Niilolainen @Niilolainen

      I think also the Suarez-Carroll acquisition should make for a robustly competitive ecosystem vs. the Gerrard just off Torres alliance that has waned significantly in the last 18 months…

      (Hope you are well, old pal!)

  • 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,

  • 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.

    • Iosweeky

      Because it was crippled with a smartphone mandatory contract. Verizons fault?

  • 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.

  • http://twitter.com/aegisdesign @aegisdesign

    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.

      • http://twitter.com/Niilolainen @Niilolainen

        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…

  • 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!

    • http://twitter.com/rurikbradbury @rurikbradbury

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

      • http://twitter.com/Niilolainen @Niilolainen

        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…

  • jehrler

    oops – meant iOS-like combination

  • 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).

      • http://twitter.com/a_cross @a_cross

        > "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.

  • 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… ;-)

    • http://twitter.com/rurikbradbury @rurikbradbury

      HTC were so smart — they rode the Microsoft train from 0-60, then switched to the Android train with perfect timing, before the WinMo train wreck. Gotta hand it to them.

      • asymco

        There was a year when they were having very slow sales growth as they transitioned, but agree that they were the sharpest of the WinMo lot.

  • The Crypticum Keeper

    words fail me.

  • 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…

    • http://www.produktiv.com/ramble.html PJ at the bridge

      One way or another, if the relationship doesn't work out, they're both f***ed

  • 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/

      • http://twitter.com/n13 @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

  • 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.

      • http://twitter.com/aegisdesign @aegisdesign

        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…

      • http://twitter.com/aegisdesign @aegisdesign

        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 !!!

  • 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.

  • 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.

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  • 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!

  • 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!

  • 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

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  • 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.

  • Synth

    Two dinosaurs mating.

    • TheOtherGeoff

      as a 5km meteor plummets towards the Yucatan Peninsula.

  • 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 :-)

  • 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.

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  • Steko

    They could have a cute little dinosaur mascot.

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  • 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 :-)

    • noogie60

      I'm inclined to think that this is a hoax. A reply from the real Tomi would be MUCH longer.

  • John Fro

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

  • 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.

  • 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".

  • hawkeyeaz1

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

  • http://twitter.com/gregorysean @gregorysean

    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.

      • http://twitter.com/gregorysean @gregorysean

        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.

  • 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.

  • Joseph

    Brilliant.

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  • 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.

    • asymco

      I can't include all the Windows Mobile licensees as there were hundreds. I tried to keep this list to only the “strategic relationships”.Sent from my iPad

  • 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).

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  • Faye

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

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