When Stephen Elop said that Nokia and Microsoft sought to create a “three horse race” he implied that there were only two viable mobile ecosystems today. With that statement he sought to deprecate or declare “end of life” two platforms: Symbian and MeeGo, implying that Nokia’s efforts at being the third way failed.
However, he also implicitly declared irrelevant a larger set of market participants. In fact, the market is awash with platforms. Far more than the three or five that Stephen considered.
The Windows Phone platform currently has hardware specifications that imply a cellular phone device. What is interesting in light of the new WebOS TouchPad, the newly announced Android tablets, the RIM Playbook and the iPad is that this supposed “third horse” of Windows Phone has no hint of present or future presence in the tablet form factor.
That might have something to do with the plans to move Windows to the tablet form factor. Perhaps Microsoft thinks that pocket size devices deserve a separate operating system, platform and ecosystem than portable mobile computers. Perhaps Microsoft plans to have two separate interfaces for these tablets (slates vs. tablets?) Then again, Ballmer held up a Windows Phone and said “This is Windows too.”
In the last quarter Nokia sold 28.3 million Symbian phones. The average selling price was €156 or approximately $210. That price was down 17% year-on-year.
According to the company,
The 17% year-on-year decline in our converged mobile devices ASPs was mainly driven by general price erosion and an increase in the proportion of lower-priced converged mobile devices sales.
ASP erosion has been a fact of life across all of Nokia’s products for quite some time, checked only by the increasing mix of smartphones. However the smartphones it sells have been consistently positioned for lower price points. This is consistent with Nokia’s long-term goal of serving “billions” of users.
The trouble with the new strategy is that the Windows Phone product lines currently in the market are not likely to be priced in the $200 range. The reason is that the minimum specifications for Windows Phone 7 are:
While a low-end 3G Android smartphone could be sold currently at U$80 (wholesale price) and the adoption of ARM’s Cortex A5 should allow smartphone costs to fall to around US$50, they’ll still have some way to fall to catch up with the cost of 3G feature phones that are already reaching price points of below $30.
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The ubiquity of smartphones is inevitable.