Visualizing jumping off a burning platform

Here’s what a platform jump looks like:

The devil is in the details. Although there was great excitement among investors at the prospect of platform agnosticism, the reality of the press releases shows that Nokia may have some significant short term pain.

First problem is that Symbian phones have become feature phones. They have zero platform value and will therefore have no opportunity for premium pricing. This is a risk to the bottom line.

Second problem is that we don’t have any indication when any competitive WP7 phones will ship. It could be years for the “catalytic” effect of a new ecosystem. As observers of Microsoft press-release-ware will note, these types of “strategic relationships” don’t pan out half the time.

Third problem is that the organization does not look all that different. One or two executives changed seats and one is gone, but this is not a new dream team.

Fourth problem is that there is no clarity on any long term win for Nokia. Maps licensing seems like the only possible new source of revenue and a minor one at that. What competitive advantage did Nokia just gain? Is there any advantage Nokia has over any other licensee of Windows Phone?

Perhaps management will address these issues, but strategy takes a long time to bear fruit and the new announcement doesn’t have any short term wins.

  • arv_leo

    The most interesting for me is the Bing deal …Microsoft get bing on all Nokia future mobile devices & services!! If they crack another deal with facebook they will start seriously hurting google as even a small share of the search market hits google's revenue(93% being from search) pretty hard!

    • asymco

      Perhaps, but Microsoft could have bought access for Bing on Nokia phones independent of the OS. They've done deals like this before. Bing, like Navteq Maps, was a bargaining chip.

    • Bing was already one of the two search providers on Symbian^3 anyway. They gained nothing there.

  • I think MS will just drop ties with all the other manufactures (the new 'mac clones')
    and go solo with Nokia.
    Going in that direction why won't that 2 companies just merge?

    • asymco

      That would be huge and would imply that this new relationship is not purely "modular" and may in fact be integrated. I would watch this detail carefully.

    • FalKirk

      I'm not sure that makes too much sense. Microsoft licenses their OS. The more partners they have, the better it is for them. What can they get from an exclusive arrangement that would outweigh the value of multiple partners?

      • I think in the mobile OS wars, Microsoft will look towards taking a position other than licensing. While licensing has been the Microsoft way for the desktop OS model, on the mobile side of things selling a license for a mere $8-$15 will not generate enough revenue, or profit for Microsoft. Rather if they were to take a step similar to Apple, and build hardware (through Nokia) they can generate a lot more.

        It could be asked why does Microsoft not do the same model on the desktop OS side of things, the answer is simply they are well entrenched in this space with OEMs. In the mobile space, Microsoft is yet to make a dent, thus building their own hardware similar to the Xbox/Zune is still possible.

        Just a thought.

      • Matthew

        To add fuel to the fire of this theory Microsoft are recruiting a new Hardware team, a sub-group in the Mobile Communication Business:

      • bigpics

        MS has been taking notes on Apple's software for decades. Now that AAPL has surpassed MS in market cap, I suspect they've been taking notes on their business model as well (witness the MS stores offering fairly carefully selected PC's which can be delivered free of bloat- and crapware).

        And seeing some fragmentation in the Android rollout, and their own loong experience in the headaches involved in supporting hundreds of thousands of configs and parts bins – much of it crufted with legacy issues – and which has slowed their OS development – maybe they're seeing the strategic advantage in controlling both the software and hardware on a much smaller number of SKU's – at least in their ongoing push into mobile.

        After all, it's worked fairly well for Cupertino…. …and they also see HP heading down the same road.

        Also, not insignificantly, they have a history of taking things they've done with partners and then turning on a dime and making them proprietary. Remember "Plays for Sure" being supplanted by the Zune store?

        Just sayin'…..

      • Joe_Winfield_IL

        I think they would gain any of the benefits of integration. They would only need to design to their own hardware, and their hardware would be designed to maximize the utility of their own software.

        However, I think the NOK shares are going to continue to fall precipitously. There will be a few quarters of continuing share erosion, and no catalyst to reverse the trend until the first integrated WP7 phones are released. MSFT would be wise to wait 6 months or a year before putting forth a formal bid for NOK, because at today's market cap it would be a very expensive deal. They could swoop in well before the first joint products are released and get the company for considerably less than today's price.

    • KenC

      Well, this may just happen naturally, as Microsoft's other "partners" have more of their eggs in the Android camp. And, Microsoft has shown in the past that they will PlayTheirPartnersForSure.

    • It might depend on which of Nokia's assets are used in exchange. For instance, is Nokia going to give away Navteq's mapping to Samsung phones running WP7?

      It's a little like when Symbian was available on Samsung or Sony phones. Why would you buy those when most of the extra stuff like Ovi maps and the store were Nokia only. Eventually Samsung and Sony went with Android to get the Google services available to all.

    • Absolutely! It's the ONLY way this announcement makes sense on Nokia's part.

      Otherwise, why would Nokia one-sidedly promise monogamy with WP7 – why not do both Android and WP7 phones? The answer is either Microsoft really took over Nokia for $0Bn – or Nokia gets exclusivity in return, and that's exactly what I think is going to happen.

      The other manufacturers are already turning their back on MS and WP7 – Samsung, LG, HTC, Moto, all see Android as the future and have already invested a lot in that. HP has Palm. Dell has no phones, at least not ones that sell.

      For MS gaining Nokia while kicking all others to the curb is a huge net win in platform adoption.

      Nevertheless, even with exclusive access, this move is a huge win for Microsoft and yet another misstep in strategy for Nokia. It would have been so easy – make Android phones out the wazoo, throw in the odd WP7 in case it suddenly gets popular, work on MeeGoo in the background and use your Android and WP7 expertise to make it good enough to turn into a contender at some point. But Nokia has gone the other way, and now two Nokia execs are ex-Microsoft people. Nokia is foolishly betting the whole company on Microsoft.

  • I thought Elop no longer worked at Microsoft?

    • rattyuk

      I think this was the plan all along. But I am cynical.

      • Not cynical. It was obviously the plan all along. Elop did't invent this strategy – he was hired as the best man to implement it.

    • kevin

      The decision was likely made by the Nokia Board by the time they fired OPK. Elop may have been hired precisely because he presented the best opportunity to get a good deal with MS (or having worked in Silicon Valley, even with Google). So Elop's first task was to implement the decision in the best way possible.

      Also, the fact Anssi Vanjoki was quoted about "peeing in the pants for warmth" way back last year likely indicated it was being debated internally at Nokia at the time. And that he left immediately on the day Elop was hired means the writing was already on the wall.

  • Next tookover Apple, could MS be trying to do the same to another tech company that’s lost it’s way?
    Only difference might be that Next had a proven OS, WP7 still isn’t ready for prime time and the competition is much sharper than Apple faced in the nineties.

    • Marcos El Malo

      I'm glad that you are one of the few that realize that NeXT acquired Apple (for negative 400 million), and not the other way around. 😀

    • Steven Noyes

      People look at me in a strange way when I tell them NeXT acquired Apple. Good to see other people recognizing that as well.

    • stoth

      Do you not remember how LONG it took apple to get out a version of Next that was good?,-Jobs/21

      Apple and next merged in the end of 1996 but it wasn't until OSX 10.2/10.3 that you could call OSX usable and only really in 10.4 has is really been successful. 10.2 came out in August 2002 so it took them 5 years of hard work to make Next a good OS (for consumers). Next was great for academics in 1996, but it took them 5 years to make it work for normal people.

    • arvleo

      well the Strategy(if there is one) seems to be working…Elop is doing a great job tanking Nokia's Market Cap and making an acquisition bid that much probable 🙂

  • Nortob

    Horace, I don’t think you’ll be on Elop’s Christmas card list.

  • rattyuk

    So. Is Microsoft now suing Apple (by Proxy)?

    • Bill

      If by "suing by Proxy" you mean "doing a business deal with another organization which is suing", then yes, I suppose they are now. They were before, too, but they are now.

  • Steko

    "long term … Maps licensing seems like the only possible new source of revenue"

    Increased US sales?

    "What competitive advantage did Nokia just gain? Is there any advantage Nokia has over any other licensee of Windows Phone?"

    I'm guessing the enhanced Office and X-box integration might be exclusive to Nokia. These are the markets (gaming and corporate) that built Windows and it looks like MS is still counting on that playbook to work 20 years later in a wildly different market.

    • asymco

      Elop at the Q&A said: "priority is success of the ecosystem, which includes work done by competitors". Would *love* to see the way Nokia shareholders will benefit from the work of competitors.

      • addicted

        Is it just me, or does Elop look like a complete Trojan Horse?

        He has basically given away the keys to the kingdom (Nokia's tremendous distribution, manufacturing capabilities, and branding in Europe and Asia) for literally nothing.

        I've gotta thing somebody (Nokia shareholders, or even the Finnish govt.) will prevent this farce from happening.

      • Steko

        (1) Google had the keys of the kingdom copied. Apple changed the locks.
        (2) what's announced today doesn't look like the best move, but it's a better move then what inertia would have brought.
        (3) it's likely that Nokia hasn't completely tipped it's hand with the announcements today.

        Following up on #3, if Nokia comes out in 2012 with phones that run Windows desktop apps natively, e.g. World of Warcraft, people are going to look back and say this was a great decision.

  • Mikey

    Asymco: "Is there any advantage Nokia has over any other licensee of Windows Phone?"
    Sound like Nokia is Microsoft's premium partner for Windows Phone 7 and they get special treatment in terms of differentiation. Samsung, HTC, LG etc. must feel really let down by Microsoft right now and look even harder at Android as their primary smartphone OS.

    "Ballmer said that the partnership is "not exclusive" but some things that Microsoft is doing with Nokia are "unique" allowing Nokia to differentiate itself in the market. Elop added that it's important for the Windows Phone 7 ecosystem to thrive, which means that multiple vendors must succeed."

    • Mikey

      Nokia will be able to customize 'everything' in Windows Phone 7, but likely won't

      Looks like on the one side there's Nokia who can customize everything in Windows Phone 7 and on the other side there are all the other manufacturers who can basically customize nothing in WP7. HTC especially must love this 😉

      • kevin

        I bet HTC is only hooked up with Microsoft so as to avoid any more lawsuits from Apple.

      • Re HTC… well… any company partnering with MS must know that it will be dropped like a hot potato as soon as convenient. PlaysForSure, anyone?

        Microsoft is a big stumbling giant, and doing many things that make no sense, constantly introducing new platforms and systems that are then shelved a year later – they've been doing it for next to a decade. It should surprise no-one. HTC is already going Android full steam.

        In that sense – watch out Nokia. I sincerely hope they have a plan B in the works. Unlikely as that may be…

    • Bill

      If I was Microsoft, I'd promise lots of "unique" things to Nokia. We don't know any details, but my guess is the kinds of things they're offering are probably relatively cheap for Microsoft to provide.

      Microsoft knows they've got all the power here: there's only a few modern smartphone OSs, and Nokia can't exactly be running to Apple/iOS if Microsoft says no.

      Being a "premium partner" is an advantage, but probably a minor one. In the end, it's still a Windows Phone. We've seen different levels of partnering with Microsoft regarding Windows, over the past 25 years, and yet I've not seen any Windows PC that was particularly memorable, in a good way. At the end of the day, you're still fundamentally a Windows PC, which means for 95% of consumers you're competing on price, and for 5% of consumers you're competing on raw hardware performance, and for 0% of consumers you're competing on OS partnership crap. I've not seen anyone buy a particular brand of Windows PC because of what the PC maker (and Microsoft partner) did with Windows, and I would be surprised at this point if Nokia was the first to make it work.

  • James Katt

    What competitive advantage does Nokia gain by going Android???? Nothing. It would brand Nokia as a loser.

    At the very least, Nokia plus Windows Phone 7 becomes prominent and unique among the smartphone vendors. It won't look like any other generic Android.

    With Nokia's hardware muscle, I see this partnership powering the success of Windows Phone 7 – unlike the weakly anemic and selling other Windows Phone 7 smartphones.

    And, it will make Nokia relevant as a platform/ecosystem – allowing Nokia to catch up to Android and RIM to become the 4th platform for smartphones.

    Nokia will become synonymous with WIndows Phone 7 since every other Windows Phone 7 licensee sucks and sells few if any Windows Phone 7s.

    This is probably the best decision that Nokia can make given the circumstances.

    • That shows a fundamental misunderstanding of how open source ecosystems work. The value with going with Android should be obvious. Nokia can build a Nokia-flavored version of Android that is compatible with all Android applications and rides the Android feature curve, but has their own spin on it. It may even be possible to strike a more strategic deal with Google.

      Why would you plug into the most anemic ecosystem out there in the hope that it suddenly becomes relevant? What would cause this? Nokia has zero power in their relationship with Microsoft. Given Microsoft's recent execution problems, it's hard to believe that WP7 will stay relevant in the future. MSFT has not and probably never will be at the same pace as Google and Apple.

      • Bill

        Nokia can build a Nokia-flavored version of Android, but does that have any value to any consumers?

        If I had to list the top 100 things that would make me buy a particular cell phone, "Nokia-flavored Android" would not make the list. It's that pointless. Google has the most (and probably the best) Android developers in the world. From what I've seen (in person and in aggregate on the web), people think most highly of Google's Android, not a "flavored" Android. There's even been one or two phones that *advertise* they have "pure Android". That's a feature!

        Why would anyone think that someone outside Google could provide a better Android? Only if there was some way that being platform-agnostic slows them down, but I can't think of any ways in which, as a developer, being able to make an Android that only runs on Nokia hardware would let me add any features that any users would value.

        To turn it around and go back to the original question: what would Nokia gain by going Windows Phone 7? The possibility of exclusivity. If they do it right, they could be the first with access to new features, or something like that. Android being open-source pretty much eliminates the possibility of that. Nokia may have *near* zero power in their relationship with Microsoft, but it can't be quite zero because that's the relationship they currently have with Google. 🙂

        Now, do I think Nokia is both powerful and smart enough to get any kind of exclusivity now? No, I think they're pretty much boned either way. We're seeing that when the market gets beyond "software plus hardware", and demands that you deliver a complete product, you need control of both. Nokia has hardware, but using any OS whose primary developers are not on their payroll is trouble, sooner or later.

        I've been an open-source developer since before the term existed. You may not like the WP7 decision because it furthers a proprietary OS (I don't, really), but in terms of saving the company, if you assume that Nokia can't build their own competitive smartphone OS quickly, it's the only real solution available. James is right: it's a pretty lousy decision, but probably the best one they have left.

      • I think Nokia should have gone with Android because it's the best mobile OS available (as iOS is not available). And it runs on tablets.

        Choosing Android, Nokia would admit first and foremost that they are not a software company – and they're not. They can differentiate themselves by killing on the hardware side – it's Nokia's core strength to build and make the best hardware out there. They're still the volume leader, they sell their stuff everywhere, and they have a very strong brand name. If they come out with killer Android phones, they'll stop the bleeding, while they figure out how to build their own software stack on top of Android. They could even make non-Google Android phones _once they have better solutions than Google_.

        I see WP7 as a dead end. It's a smart phone OS that came too late, and that can't run on tablets. Being "almost" as good as the two market leaders isn't good enough. By the time WP7 gets meaningful Windows/XBOX integration the world will have moved on. As I see it Apple is doing an amazing job out-inventing and out-running the competition, and Google is doing a fairly good job running after – Google can do this because they have great software people working there. They've even passed iOS in some ways (maps, notifications). Microsoft… everything Microsoft has been doing for Windows over the last 15 years is not good enough to compete in a new era.

      • Simon

        "Why would anyone think that someone outside Google could provide a better Android?"

        Exactly the problem that no Android advocate can answer. They love to flaunt the open source bit and claim "anybody" can improve Android or even fork, but when pressed as to who can do Android better than Google, they cannot answer that question. Who will give you better Google maps than Google? Who will give you a better GMail integration than Google? Who will give you a better Google Voice than Google?

        At the end, it's Google who does all the important bits for Android and Google is the driver of revolution. We cannot trust the phone makers to implement the available updates in time, and some seriously expect them to make their own, better, version of Android?

      • Simon

        "open source ecosystem" is one of most over used and meaningless term when it comes to Android. When you buy a respectable Android phone, you buy a phone using Google's OS, Google's proprietary apps with Google's proprietary services hooked up by Google's log-in, and Google's market.

        Yes some people at XDA can put together a ROM package including a different launcher, different task switcher, etc, but at the end it's a Google phone through and through. Ironic thing is, usually the custom ROMs are often targeted at getting rid of non-Google stuff and putting back plain Google back to Android. Whatever "open" means, the Android ecosystem is nothing if not Google's sandbox. OK so you can sideload APKs. Good for you. Will you give up the Google market?

  • PatrickG

    There is a certain amount of survivalist mentality here – Microsoft is alert to the fact that they are seeing a subtle erosion of the desktop space, they have HP threatening to springboard another competing OS into the mix with WebOS, and well, Nokia is seeing its market share compromised while they stare in impotent horror at the slow immolation of their platform (thanks for the visual Mr. Elop!). This works to their favor in the short-term, and expect Nokia to be crash-developing the first wave of WP7Nokes within a year or sooner. Direct pressure to stop the arterial spurts for both Nokia and WP7. Redmond can quickly scale WP7 to move down into some of the upper-end feature phones, making them "smarter" and gives them a willing benchmarker in Nokia. They will continue to partner with the rest in order to try and slow down Android, either through leveraged licensing, or through threat of lawsuit. And they will keep pointing at Apple to distract the pundits and analysts as to their intent. IN the end they perceive a win/win here – Microsoft gets a dedicated (and desperate) platform partner for the slow-to-market WP7, and expansion of the Bing franchise. Nokia gets a sea-rescue for their products, a ready-built OS with potential in the market and the backing of a company with deep pockets and long on denial. Long term? Microsoft has not been proven to be very successful at partnering with other companies on the whole so that is not a future I can envision at this point.

    • philday

      pretty close to hitting the nail on the head

  • Jake d

    To answer your question: they gain selling phones with a not poo software… Actually a when you look at it realisticly a bit unpolished but Real Nice phone software.

    With the build quality and Real Nice hardware that Nokia brings to the table combined with Real good maps and the ovi market developers imo the is a match made in heaven.

    The stock drop is imho cause this seachange would only happen if the last ditch effort of the symbian team ( ie the N8) had failed. The Got their chance but the sales must have tanked badly…

    Cause from what i have seen wp7 Will be a serious contender. Especially in the bizz space where Nokia and Nokia devs are strong in a great deal of markets…

    But time Will tell

    • Don't know who you're referring to with ovi market developers, but ALL developers that have been targeting Nokia platform are absolutely enraged. I'm sure as the dust settles some of them will calm down, but Nokia/Ms better not expect any support from them before they have a similar install base as Symbian (~50m touch enabled handsets).

      • Simon

        The question is, is that install base worth anything? Do they purchase apps? Do they attract more quality devs than other platforms do? Do they utilize the power of their smartphones to full extent? Do they pay a lot for your smartphones? Do they attract enterprise uses? Somehow I'm not convinced that much of those "~50m touch enabled handsets aren't being used much more than as glorified featurephones.

      • That install base (and it's nearer 150m) is worth nothing. Nokia have just chucked that away.

    • The 'last ditch effort' of the Symbian Team sold 4m N8s last quarter and 1m C7s with a few C6-01s too. They sold another 24m of the older Symbian OS too.

      Windows Phone 7 shipped (not sold) 2 million.

      So, which one tanked?

  • Rowan

    Microsoft will use Nokia’s market and mindshare, especially in Euorpe, to expand it’s Windows Phone 7 distribution. But once that takes hold, how long will it take for the back stabbing to begin, Microsoft releases Xbox Phone, without Nokia, Mocrosoft’s first hardware. Nokia releases AN1, first Android phone. Anything is possible long term.

  • Albsure75

    Ask yourselves "what is nokia's real problem?". They sell more phones than anyone else. They make a lot more money than any of their competitors, so where's the beef?

    Answer: in 5 years time all the phones out there will be smart phones, not feature phones. Not just in the US but all over the world. Smart phones have one key difference compared with feature phones. They are extended by new software, not new hardware. That is totally anti Nokia at the moment and Elop knows it. 

    The reality is they need a software Eco system like super fast. They have tried but they are so big and bloated and ultimately schizophrenic that they've ended up with 3 platforms. Worse still you need a physics degree to do anything decent in them because their all based in some variant of c++ (officially the most complex language of all). 

    The wp7 move is a no brainer. You get a mature platform (.net is rock solid) that's easy to develop for combined with the fact you can flood the Market with phones because you are Nokia! Who is seriously going to bet that Nokia on a .Net platform will not have a bigger world Market share than android in 3 years? 

    If it were me I think Nokia should have at least one phone out by Summer time. Google will be freaked out completely. Just imagine 50% of phones sold all defaulting to Bing! Apple could turn around and stab google in the heart while MS and Nokia stab google in the back. It's almost poetic… 

    That's why vic tweeter about the turkeys. He knows this is seriously bad news for android. On top of that, the speed at which MS operates nowadays with SCott Guthrie etc.. I can imagine a version of WP7 that runs on low cost hardware by next year, covering all of Nokia's low cost phones in the developing world. 

    At the end of the day all a WP7 phone has to do is run Silverlight apps. It doesn't even have to look like WP7 from the front. Silverlight has extensive theming built in so I wouldn't be surprised if NOKIA WP7 don't look much like Microsoft super trendy version of WP7. But that doesn't really matter, all that matters is that your phone can run Angry Birds 5!!

    • keath

      > The reality is they need a software Eco system like super fast. They have tried
      > but they are so big and bloated and ultimately schizophrenic that they've ended up with 3 platforms.

      Do you mean Microsoft, or Nokia?

    • realist

      "what is nokia's real problem?". They sell more phones than anyone else. They make a lot more money than any of their competitors, so where's the beef?

      Uh, no, they don't. last I saw, Apple rakes in more PROFIT with iPhones than all other competitors COMBINED.

    • I guess you've not actually used Qt and in particular QML which is (was?) Nokia's development platform prior to assimilation.

    • Matthew

      I agree with you. Nokia is selling horses, and their competitors are selling cars. When everybody gets a car, nobody's going to buy horses anymore, so being the leading seller of horses won't be worth much.

    • I agree with you in that Nokia needs a new ecosystem super fast. I just don't see how they gain from MS.

      Spot on that MS is going to be benefiting from this hugely, while Google is losing. But what does it have to do with Nokia?

      Is WP7 in any way better than Android? How? If anything I see the unproven WP7 as a huge risk by Nokia – Nokia could do Android, and could, as you've said, put it everywhere. They could put their own UI on top just as you've said they could do on WP7. Everything you've said above about WP7 – could be done with Android.

      I think Nokia might gain exclusive WP7 access – it will be like MS and Intel, only MS and Nokia. But WP7 is still unproven, and exclusive access to something that's worse than the competition isn't worth squat. Hence the tweet about how two turkeys don't make an eagle is rather accurate.

      • Simon

        "Is WP7 in any way better than Android? How? If anything I see the unproven WP7 as a huge risk "

        That's the risk and the appeal. The Android market is getting to be cut throat. There are many established players such as HTC who put years of work into customizing and developing their phones and have royal followings. As good as Nokia is, they are merely another player in the big Android pond. In WP7, because it's unproven Nokia can get Microsoft to cooperate more enthusiastically at a deeper level and try to become the first company with an earnest effort to push WP7 phones. The risk is what to do when others try to follow the same path if this succeeds, but that's another story and still more enticing than the Android scenario methinks

  • Steve

    If only they'd purchased Palm, things could have been so so different for Nokia.

    • Matthew

      By different you mean better?

      With Nokia WebOS they would be very much in control of their own destiny and ecosystem. It was very costly for them to miss out on that.

      • They just weren't ready to handle that.
        Their corporate shenigans would have probably made a mess of Palm assets and focus.

        HP was just a much better mating for Palm.
        They were ready to be "NeXT-ed" by Palm on their mobile startegy just like Apple was back then on their desktop strategy.
        Nokia surely wasn't

    • The way I see it it was just yet another misstep on the path to irrelevance. The Microsoft deal – yet another one.

  • Guest

    "They sell more phones than anyone else. They make a lot more money than any of their competitors, so where's the beef?"

    Yes, they sell the most phones. They don't make a lot more money. Apple makes all the money. If I remember right, they make more than #2 and #3 in profits COMBINED.

    "Smart phones have one key difference compared with feature phones. They are extended by new software, not new hardware."

    This, I agree with. This, and even before third party software, the iPhone had elegant and easy to use features. These are the success of the iPhone.

  • xenon10

    Is there any advantage Nokia has over any other licensee of Windows Phone?

    The right question would be "Is there any advantage Nokia has over any other licensee of Android"? At least WP7 is not yet crowded and a big player like Nokia can keep competitors at bay in this space unlike in the Android space where top phones for a plethora of vendors are already crowding it. Financially it gains by reducing significantly the R&D budget in the short term and getting access to an ecosystem that grows leaps and bounds faster than Android did in their first 3 months.

    • " At least WP7 is not yet crowded and a big player like Nokia can keep competitors at bay in this space unlike in the Android space where top phones for a plethora of vendors are already crowding it. "


      The only way this would make sense is if WP7 was vastly superior to Android. As it is though, it's not. Having exclusive access to something that's inferior is worth nothing.

  • James

    this will go head-to-head with Android, if they can get products out the door quickly, since Nokia has the widest distribution channel of anyone – bar none. WP7 and Android will compete with each other on price and they descend to razor thin margin status, like HP and DELL in the PC market, while Apple mops up the profit.

    Unlike the PC market, Apple will retain a 25-30% market-share but with 50+% of the profits. If the iPhone-Nano comes true, well see a $99 iPod/feature/candy-bar phone will have an iPod like effect on the mid-range, pushing Apple into mainstream phones and even more profit.

  • John

    Micrsoft can easily absorb the losses if/when WP7 fails in the marketplace (Xbox anyone?) but — with this move — that same scenario would cripple Nokia. A pretty big gamble, IMO.

  • ben

    Android or WP7 which burning platform do you want?

    They waited too long to action, now they don't really have any option.

  • You should probably update the graph. It's looking even more dire now. Down 14%+

  • Pingback: The Constant — Nokia, our new platform is Windows Phone 7()

  • Todd

    What does Nokia have to gain?! Hungry developers keen to take advantage of Microsoft's nearly unparalleled development environment (next only to XCode).

    The same software development spidey sense in me is tingling on this one, just like it did when I started iPhone development. The possibilities were mouth-wateringly obvious as a developer, and this partnership combines two major companies who each need the expertise of the other to fully maximize what each alone envisions for their products. The sum of the whole will be greater than either of their parts.

    Microsoft brings Nokia a triple-a OS with a triple-a development platform. Nokia brings Microsoft experience and assets in the domain that Microsoft has struggled mightily – the mobile industry. Together, success for both is success for all parties – consumers, shareholders, and never forget the key – the developer. Give the developer a platform akin to xcode or visual studio, and you have a true contender.

    • "Microsoft brings Nokia a triple-a OS with a triple-a development platform"

      Windows? A triple-A OS? Visual Studio? What planet are you living on?!

      I'm a Windows developer btw. This platform is dying a slow death.

  • David S.

    It's the same mentality that has brought Dell (and HP) to their knees, the idea that you can outsource the core software for your platform to a 3rd party like MS (or Google) and "just" be a hardware vendor. Didn't work in PCs and it won't work with smartphones and tablets either. HP realise their PC mistake and have bought their own OS, not going to be indebted to MS (or Google) again, no more razor thin profit margins. The question is if it's too late for HP or not. Nokia haven't learned the lesson and are determined to repeat the mistakes of others. Everyone who gets into bed with Microsoft gets screwed, and so will Nokia.

    The thing Apple realised years ago that almost no one else has yet woken up to is that you have to own the software as well as the hardware, particularly the OS which is the core of the whole exercise. You can't let this vital component be owned and directed by a 3rd party if you are to avoid commoditization and intend to make (decent) money. Nokia, HTC, Moto and the rest see software as a cost they want to outsource instead of their core business that they need to have control of.

  • Dave Barnes

    What about the carriers?
    Only one phone company (Apple) has managed to prevent the carriers from screwing up/with the phone experience.
    Can the MSNokia duo duplicate this?

    • There, I don't see any issues. After Apple strong-armed the carriers into accepting previously unthinkable things (outside app store and unlimited data!), everyone else gets the same deals now. They must as if only Apple got these deals, Apple would dominate even more, and gain power to get even more concessions – they only way to keep Apple down is to give everyone the same or better deals. Apple knows how to play this game, they did the same with the iTunes store and the music industry.

      Android is just following in Apple's path, and so will WP7.

  • Thomas

    It's not Nokia in the place of Dell or HP. Perhaps it's Nokia in the place of Intel, in terms of a partnership as tight as Wintel once was.

  • I wonder how much trading automation was responsible for this drop. We all see lot of "Nokia suicide", "Nokia disaster" phrases floating over the web.

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  • Steve White

    I'm afraid I don't see how WP7 turns into a big win for Nokia. Yes, .Net and Silverlight are technologies that developers CAN use to develop for WP7, and thus for a Nokia WP7 phone.

    But will they?

    Developers have been burned by MS and their phone software. The various flavors of Windows Phone (whatever you want to call it today or in the past) through 6.5 have been abandoned. There is no guarantee at all that WP7 will hang in there if it doesn't get traction in the next year. In that case, look for "Windows Phone Eight!!!!" and an abandonment of WP7. How will users and developers feel then?

    A fragmented market and development is only part of the problem. Look how MS treated Danger and the Sidekick. Look how they treated the KIN. Look at how they treated their music maker partners with the back-stabbing abandonment of "Plays-for-Sure" in favor of the Zune. And look how the Zune is always two years behind the iPod. Microsoft simply can't stay with anything in the consumer space for the long haul. That can't be comforting to developers, and shouldn't be comforting to Nokia.

    But the worst part of the deal for Nokia is that they trade their crappy phone operating systems for a system that they won't control. At precisely the same moment HP is building WebOS and planning to use that OS on computers as well as tablets and phones, Nokia is abandoning any hope of controlling the integration of OS, software and hardware on their phones. That is NOT a recipe for success.

    This may be a good deal for MS if they can consolidate their coup over Nokia. But it's a terrible deal for Nokia shareholders, and one that more and more of them are going to realize in the coming months.

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