Nokia and Microsoft to partner on WP7

[99semaj]

From CNN:

Nokia is going to have to do the unthinkable in the coming weeks and months and align itself with one of the other two OS platforms out there. They are going to have to either join up with Microsoft (MSFT) Windows 7 or Google's (GOOG) Android. With (Nokia CEO) Elop's background and familiarity with Microsoft, it is likely to be the frontrunner, though from an outsider's perspective, Nokia would have more long term creative control of its destiny with Android.

Nokia's fortunes have turned sour to be sure (see their CEO's rather bleak assessment), but are they so desparate that they need to team up with the industry's other prominent loser and offer WP7 on Nokia hardware?

Microsoft is probably desparate to find a friend in the smartphone world, even one that's down on its luck. I'm sure there's a lucrative offer on the table.

I actually test drove a WP7 phone a couple of weeks ago, and it didn't make me throw up bile like I expected. It's functional in the space it plays in, but that space is probably more downmarket than Nokia is looking for.

[TorontoColin]

Microsoft actually has a pretty impressive list of hardware partners as it is (Samsung, HTC, Dell, LG), though I'm sure they'd always love to add more. I think making some high-end WP7 devices would be a nice way to tide Nokia over until they can get MeeGo going.

The problem with Android for them is that they would be playing big-time catchup to the various established Android device makers. The WP7 market is still fresh enough that they could quickly make up ground.

That said, if they want a whole scale change to becoming a hardware only company, Android is much better set to scale across their potential device lineups.

[jvincent]

But if they go with Android they have a big installed base of apps that are immediately available.

The "problem" with either strategy is it turns Nokia into a H/W only player.

[audacity]

The "problem" with either strategy is it turns Nokia into a H/W only player.

I think Nokia's immediate needs would be better served by adopting a modern smartphone OS from another software vendor (Microsoft or Google). Right now Symbian is costing them sales of their (apparently) excellent handset hardware. Shipping phones with WP7 or Andriod doesn't prevent them from continuing their work on Meego and transitioning to it when it's ready.

It also allows them to hedge their bets if Meego doesn't work out (Copland-style). The Smartphone market is moving too fast for Nokia to wait for Meego.

In hindsight, maybe it would have made sense for Nokia to buy webOS. At least it is market ready.

[robsaw]

My reading of the Nokia CEO's comments is not so much that he wants to jump off the Symbian ship but that he has a problem with his management team not being able to execute and get product (HW and OS) to market. More like a warning that timeliness is critical and executive level heads are going to roll. Some comments suggest that he wants more effort put into Symbian put that other OS ventures might be dropped (or replaced).

[stampeder]

The upheaval within Nokia is starting to happen big time, to the point that the proudly Finnish company may even move it's headquarters from just outside Helsinki to Silicon Valley, with a board of directors made up of Elop's people. This seems to me to be a seismic shift in progress, and some are referring to it as the "deFinnistration" of the company. Here's another sample of what the press is saying:

http://www.thestreet.com/story/11002...ven=tsc247wall

BTW Nokia once contemplated buying Apple when rumours about a mobile phone from that company first started popping up years ago. My hope is that a potential team-up with Microsoft does not do to Nokia what such deals have done previously to companies like Silicon Graphics and others.

[audacity]

My hope is that a potential team-up with Microsoft does not do to Nokia what such deals have done previously to companies like Silicon Graphics and others.

There is a long list of companies that over the years have had much success and built shareholder value by teaming up with Microsoft. Citrix, Dell, HP, Compaq, Intel, AMD, NVIDIA, etc.

And I'd argue that SGI's fate had very little to do with the failure of their NT workstation line. It was because companies like NVIDIA did a "good enough" job with 3D rendering hardware that engineers/3D artists didn't need SGI "big iron" to drive their applications anymore.

I'd say that Nokia is at a greater risk of "pulling a SGI" if they were to continue down their current path.

[stampeder]

That was an aside on my part about corporate risks, not successes, so I suggest that we not go over old history for the sake of this thread.

The question facing Nokia now is which of the various risks has the most likely payoff. It would seem that the powers that be determined that maintaining the status quo or even doing nothing was too risky. If things are indeed changing so rapidly at Nokia HQ then they are now being exposed to risk at a mind-bending rate, sort of like having opened Pandora's box.

[99semaj]

Well, now its official...

A big win for Microsoft, but a dark day for Nokia. CEO Elop must have felt so humiliated having to stand on stage with Ballmer.

The markets are punishing Nokia, down 12% on the news.

[TorontoColin]

Definitely a huge change for Nokia.

However, this could work out nicely for both of them in the end. Microsoft has crafted a potentially excellent smartphone OS that needed help getting into markets and Nokia needed an OS built for the future. This has the potential to eventually return both companies to global prominence.

[jvincent]

This has the potential to eventually return both companies to global prominence.

I only did a quick read of the announcement but IIRC the first Nokdoze phones won't be out until 2012.

That's an eternity in the smartphone market.

[TorontoColin]

Late 2011, likely using existing hardware. 2012 for entirely new devices.

[g011um]

Originally Posted by 99semaj

CEO Elop must have felt so humiliated having to stand on stage with Ballmer.

Na, Elop is an former Microsoft exec. They probably went for a beer after and talked about old times.

Which makes this decision not much of a surprise, really. Well, I guess I'm a little surprised that they didn't go with Android as it, like the MeeGo OS they just dumped, is based on Linux, so their previous development might not have been a total write-off. Given Elop's ties to MS though, it makes sense. More risky I think, but it makes sense.

[audacity]

The key risk for Nokia's WP7 move is Nokia will not own the OS that their platform is based on. Most companies would want to be like Apple or RIM and own their operating system and market it as proprietary selling point of their platform.

Had Nokia selected Android then the smartphone OS wars would have been over, and Android would have ascended to the throne of being the Windows of the smartphone world. Everyone wants to be the Windows of the smartphone world, and nobody wants to be the IBM of the smartphone world. By that I mean nobody wants to be a hardware vendor when the hardware becomes a commodity; which is what will happen once there is a winner in the smartphone OS space.

I imagine that Nokia didn't want to crown Google king of the smartphone. Instead, by selecting WP7 (a minor player up to this point) it makes for a three-horse race where the software still matters, and it's not (yet) a commodity market of hardware all running the same software stack.

Personally, I'm glad Nokia selected WP7 because as far as I've seen, it's a wonderful smartphone OS. On pure technical merit, I prefer webOS, but I'd give 2nd prize to WP7 because I like the concept of frames displaying your data rather than just presenting a grid of applications where you need to load your app before you get to see your data. It's a step in the right direction.

[jvincent]

On pure technical merit, I prefer webOS, but I'd give 2nd prize to WP7 because I like the concept of frames displaying your data rather than just presenting a grid of applications where you need to load your app before you get to see your data.

Android widgets have been doing that for over two years.