Spanish whispers on Microsoft and Nokia Once the condition of offspring has been established, and the second round is on the table, conversation in Barcelona quickly turns to what everyone expects of Nokia's deal with Redmond. And the MWC attendees are surprisingly positive, once the sense of betrayal has been exorcised. The feeling among them is that Nokia has …
With Google activating another 1m smartphones every 3 days, they can't wait till late 2011 for something, and even then consumers don't want an inferior WindowsMobile based "smart"phone.
Nokia didn't choose WinMo7, it was the other way round, Microsoft infiltrated Nokia and then pulled the strings to suit their game.
Had there been no Microsoft influence at Nokia, clearly Android would have been the perfect fit.
2 years from now we will be talking about the suicidal decision to put a ex-Microsoft bod as the CEO of Nokia, and how Microsoft drained them of anything worthwhile and then discarded them in a Finish lake outside Oulu.
If they can tackle the first major problem, that is the lack of developer support and free apps available on the microshaft app store. They should pump their millions in to paying developers to write/port decent apps...
Secondly, how the heck are they gonna differentiate in terms of hardware? are flexible roll up screens ready for mass production yet? :-) they'll need something of that magnitude...imho
A lot of fandroids trot out the numbers on Google activations as though it is comparable to other OSs, but it isn't, for the simple reason that Microsoft, Apple, RIM, HP, etc. all make money on each copy of their OS that gets activated, whereas Google loses money on each copy (because the OS is free to the manufacturer, and the cost of the servers etc. - as well as the R&D on the OS - is definitely not free to Google).
"clearly Android would have been the perfect fit" - this statement betrays the fact that you really don't understand market economics at all. Android on Nokia would probably have been a good thing from the consumer's perspective. But it would be a disaster from Nokia's perspective, because it would force them to fight Samsung and HTC on territory in which both of those manufacturers already have an entrenched user-base. If you think it through, carriers would have a hard time pricing an Android Nokia and differently from an Android Samsung. Sure, the build quality, camera, etc. on the Nokia might be better, but phones that do essentially the same thing tend to cost the same amount, and it would be difficult for Nokia to persuade consumers to think otherwise. Hence, entering into the Android market inevitably becomes a race to the bottom, and margins get squeezed.
WP7 offers Nokia a way out. Certainly it's not a perfect way out from the perspective of either the customer or Nokia, but it offers them a very good OS (compare the numbers on customer satisfaction between WP7 and Android & you'll see WP7 is way higher). The fact that no other manufacturer dominates the WP7 landscape means Nokia can (if it acts fast) differentiate itself on the basis of the things it is good at (hardware design, top-notch cameras).
This explains why (as the article states), when the dust settles and the sense of betrayal subsides, analysts accept that WP7 was really the only viable option that Nokia really had.
And how does this bloody differs from a stable of manufacturers producing hadnsets to an IDENTICAL spec defined by Microsoft?
In fact, in that case unless Microsoft relaxes its grip on WP7 definition Nokia is clearly _WORSE_ off. It now not just has to compete with LG, HTC and Samsung on price but it is not allowed to have a different phone to do so.
If Microsoft relaxes the definition that will make the platform identical in terms of competitive environment - Nokia will have to compete in the shark pool against LG, HTC and Samsung on price yet again with the platform promptly balkanized into an Android look alike, just a .Net/C# based one.
So going with WP7 is in the realm of Dumb, Dumber, the Dumbest.
When you are the size of Nokia using an own platform or at least a huge chunk of own customisation on top on an existing platform is not a choice, it is a necessity. That is the laser on the frikkin' shark head which makes it different from the common dogfish in the shark pool.
Choosing a platform that explicitly disallows you to customise and differentiate and build that frikking' laser is not just stupid. It is criminally stupid.
I think you don't know what you're talking about.
Don't blame Elop or think that because he came from Microsoft that it influenced his decision.
I'm not trying to defend Elop, but trying to say that it wasn't Elop who put Nokia in a bad situation where they had very little options.
If you knew anything about Nokia and or Microsoft, you would understand the decision more if you knew the answer to the following question:
"Outside of a handset maker, what other value does a Nokia partnership bring to Microsoft?"
If you are referring to the hopes in some of the parts of Nokia that MSFT will successfully contract the IMS bug as a result of this liason and improve Nokia chances as a carrier kit maker - yes I know about that one...
As far as crazy ideas go this one belongs in the dot bomb days along with a pet shop getting a multimillion valuation. It is not even worth commenting on it..
"In fact, in that case unless Microsoft relaxes its grip on WP7 definition Nokia is clearly _WORSE_ off. It now not just has to compete with LG, HTC and Samsung on price but it is not allowed to have a different phone to do so."
OK, you clearly don't understand how MS released WP7 to the OEMs. They allowed the OEMs to make phones however they saw fit, subject to *MINIMUM* specs. They did not prevent OEMs from differentiating to make a better phone, they just prevented them from using crappy parts. How is that a bad thing? The only reason that the phones use largely similar hardware is that MS wrote hardware drivers for what it considered to be the most feasible hardware setup, and no OEM bothered to write its own drivers for anything else (which is understandable, given the fact that WP7 was entirely unreleased when the current crop of phones were being designed). So if Nokia can be bothered to write its own drivers (and given that WP7 is going to be its primary smartphone OS, it had better be prepared to do that) then your assertion that they would be worse off is utterly without foundation.
I agree with your second point - that Nokia are going to end up in a WP7 shark pool, rather than an Android one, but the point is that the WP7 pool is still defining itself. If Nokia had picked Android, it would have YEARS of Android development to catch up on, whereas by picking WP7, it has less than 6 months of development to catch up on... and yet, your argument appears to be that Nokia would be better off joining a market where the competition has an R&D lead of several years, rather than several months... seriously?
"So going with WP7 is in the realm of Dumb, Dumber, the Dumbest."
Right, 'cos Ballmer and Elop (both millionaires in their own right who made their fortunes through their own work) are "dumber" than you, a commenter on an internet forum. Brilliant deduction.
"Choosing a platform that explicitly disallows you to customise..."
As noted aove, you have clearly misunderstood MS's arrangement with the OEMs. The only thing stopping an OEM from customizing and going above & beyond the minimum hardware spec is its willingness to write its own drivers. In any case, we've seen a fair amount of customization already - there are WP7 phones with massive screens (HD7) and smaller ones (Trophy), ones with standard cameras (Omnia 7) and ones with 8mp & Xenon flash (Mozart - which also has Dolby surround speakers) phones with no keyboards (all of the above) phones with landscape keyboards (HTC 7 Pro) and phones with portrait keyboards (Dell Venue Pro). That's a lot of customization for the fist release of any platform. Sure, it's less customization than Android *currently* has, but how much customization did the first iteration of Android have? None. One model. How much does Apple have? None. One model.
Next time it might be an idea to, you know, actually have some facts at your disposal before you post.
>> Google loses money on each copy
FFS! google is a public, for-profit company. It is not a charity. Its officers have statutory duty to protect the interests of the company's shareholders. google must be making money from Android somehow even if they are giving away "free" licences.
BTW, WP7 wasn't Nokia's only viable option. They had Symbian and Meego. Although these have serious problems, they are or were fixable with proper supervision. It would be painful for Nokia to do that and it would take longer than getting a WP7 phone out. However sorting those OS problems would have left Nokia master of its own destiny instead of becoming yet another Microsoft-dependent box-shifter.
You seem to have the bizarre idea that we give a rat's arse if Google make money or not on Android activations. You don't need to be a fan to understand every Android activation is a potential lost WP7/IOS/Symbian etc. activation - you know, 'the competition', the thing wiping out Nokia. If you insist on thinking Google are in effect subsidising Android activations what benefit does Nokia get by not accepting that 'subsidy'?
Is WP7 the lesser of 2 evils? We'll never know. What is certain is Nokia will just become another commodity phone producer, albeit at the quality end fighting with HTC but with NO USP. They've chosen a short term advantage over the direct competition but abandoned any chance of escape later. Shutting down their R&D seals Nokias fate as 'just another phone maker'.
Tying up with Microsoft does nothing to help, it's just the laziest decision an incompetent Microsoft trained CEO could make. A CEO who must be wondering why the M$ shares he needs to sell aren't rocketing up on the news. That will have been the moment he realised there was a problem.
your point of view is very narrow.
wm7 gives nokia a chance to become the very big fish, in a very small pond, so what benefit is there, when you're numbers are a tiny percentage of the overall market, you're going from a dwindling market share, to a tiny market share.
is it possible that nokia can expand that market, sure, but only if people are willing to buy them, which seems they are not.
so what benefit is there? nobody is really running out and buying the handsets showing wm7, so nokia is just reducing it's market share, but doing it deliberately.
if they became "just another android handset maker" they could enter the market, be the small fish, in a HUGE EFFING MARKET, then over time, produce amazing phones like they used to do and drive HTC back to it's tiny market share it used to have, I remember 5 years ago when seeing a HTC phone running windows ce was almost a once in a lifetime experience, now they are everywhere, probably due to android.
once the android market was tiny, HTC entered, no competition, had to improve, iphone drove up the quality bar and HTC met that challenge, the latest HTC phones are amazing.
nokia COULD have done the same with android and I'm sorry, but the android market is NOT going to get smaller, only bigger, Windows Mobile market? pfff it'll be what windows ce used to be, something you see on a couple of people's phones, but not everywhere like android will be.
I like windows mobile 7, I used it and I thought it was really nice and fast to use, but blimey, what a narrow point of view......
Saying things like "your point of view is very narrow" is a dangerous accusation mate. There's a few things maybe you should consider too, that might widen your own view:
1) Smartphones have yet to saturate the market. Of course Android is only going to get bigger, but it's not a zero sum game yet so WP7 has room to grow too. (Why might it grow? See point 6)
2) Smartphones is the main growth sector in mobile, and intersection of internet and mobility in general is encroaching everywhere. (Just ask TomTom, or any other large company now under threat). Basically, if you make mobiles but you're not near the top of the smartphone game, you will have serious trouble in several years regardless of how important you used to be. Nokia are not near the top.
3) Given that WP7 does have room to grow (see point 1 and 6), being the big fish in that pond is very very valuable, for reasons that are pretty obvious but include being the dominant brand partner when your product is on the shelf (differentiation from Samsung/HTC et al right there) as well as having more say in R&D matters
4) Both Nokia and Microsoft need a turnaround, otherwise they are going to lose their significance in markets they used to dominate (note, this is not "death" - anyone who says Microsoft or Nokia are "dead" has such a narrow point of view that you could well consider them an idiot). So, there is shared goal here. The whole Nokia-Microsoft announcement needs to be viewed in this context. It's not a perfect outlook for either of them - that's not news, hey? But they can now concentrate on what they supposedly do best, hardware and software, and meet the joint Apple/Android threats
5) Software and hardware constantly get mixed up when talking about all this. You do it yourself: "once the android market was tiny, HTC entered, no competition, had to improve, iphone drove up the quality bar and HTC met that challenge, the latest HTC phones are amazing" The iPhone was not an amazing phone, but it offered an amazing experience. HTC might have raised the hardware to match the iPhone, but Google matched that with ratcheting up the Android experience. Hence, an HTC-Android became a viable competitor.
6) The take-up of OS in the smartphone market is based entirely on meeting the experiential minimum standard first (bye bye Symbian) and then things like number of apps and future flexibility and the intangibles like whether your mates are on the same OS. As per point 5, the WP7 experience is on Microsoft's side of the bargain, and while they have work to do to catch up Android and iOS you can't just call fail because they are "Microsoft" and people therefore don't like them. My friend has an Xbox, let's ask him whether Microsoft are crap. MS just need the WP7 to be as fun and useful as the others. Whether they can do this is the gamble, but there's still time. WP7 is not Windows CE.
7) When huge companies work together, it helps to have leadership who understands both companies. Having a Microsoft man at Nokia is an advantage, not a trojan horse. The man *knows* the people he has to deal with. You can't ignore that advantage and just label him some kind of spy, as some people on here have
Basically, there are huge holes in the thinking of the majority of people who have been posting about Nokia-Microsoft - this is what makes a narrow point of view. WP7 is not "inevitably" dead. It's a gamble for Nokia to so firmly put their colours on the WP7 mast sure, but it's still too early to call "inevitable death" for Nokia or Microsoft. Ignore the falling share price for now, and look at the future. Nokia didn't have one before.
1) you must live in a backwater, everyone I know and practically everyone I see has a smartphone now. apart from my girlfriend who has my old E65 and even that has wifi on it
2) not significant to what I said
3) yes, being number 1 in a pond which holds 5% of the market is a very valuable thing to own, what a joke
4) two losers don't make a leader, they make a bigger loser, then read (7)
5) the iphone was an amazing piece of hardware which totally changed the market, but I fail to see how your point has any significance to what I said
6) and?
7) read (4) again
you basically you completely missed the point, so I'll have to explain it
entering the wp7 market only gives you a potentially smal total market share of whatever tiny percent it is unless it starts to take share away from the others, which is practically impossible because the other juggernauts are not going to stand around and let that happen.
also, now that samsung, htc, lg all are serious competitors as opposed to copy-cats like they were 10 years ago, you have to be dammed good to beat them, android has made it possible for everyone to sit on nokia because nokia didnt react fast enough.
but joining with a loser in the market is not going to help them, just drag them down with the loser....I don't see many people agreeing with you on this one.
get it now?
"unless it starts to take share away from the others, which is practically impossible because the other juggernauts are not going to stand around and let that happen."
...err, mate, that's illogical: one of those "juggernauts" (Apple/iOS) was powerless to stop the other (Google/Android) from entering the market and taking significant market share. A company can't stop others from entering the market (particularly in the EU, owing to Art. 82 EC). At best, Apple and Google (and their OEMs) can make better phones/OSs and hope that MS/Nokia can't keep up. In 2-3 years, we will know whether they were successful, but at this point it is waaaay too early to tell.
I agree with some of the things that you are saying.
However its important to point out that Google isn't 'losing' money on Android. Rather they are making a strategic 'loss leading' investment in to a platform where they can recoup their investment on the back end.
People just don't realize how much money is made from LBS, and data capture. Why do you think Google is required to ask your permission to track your information when you use Google Maps on your phone?
Yeah, you might have forgotten that because you can set up that permission rights once and forget about it. ;-)
Posted Anon because I happen to know more about LBS than I'm allowed to talk about.
I don't think you understand the 'smart phone' market or its players.
Nor do you know the facts behind Elop's decision.
I'm afraid I'd have concur with another poster that you are a Google fanboi. Sorry, but Android offers risk as well as a trap where Nokia would have to compete against the HTCs of the world. Moto is finding that out too.
And lets not forget the fact that Oracle is suing Google over Android.
... is if I walk into a phone shop next year with my N8 for an upgrade and they offer me a WP7 replacement, will the WP7 have HDMI out, USB OTG and all the rest (because at the moment it doesn't).
So will an upgrade, involve a "better" UI but removal of (what are for me) key features?
Android, iOS, WP7 don't really have the "converged device" thing going on but Symbian did. Meego had the promise of Android style flashiness with Symbian like feature set. In fact, progress for Android involves just doing the same stuff but faster and with bigger screens. Apps just don't cut it.
I am disappointed at the prospect that any phone I buy next year will be less useful to me than the one I already have.
The perfect phone for me is 4" screen with best quality available, HDMI out with a big screen interface. Bluetooth mouse and keyboard support. Built in keyboard. And also the ability to run full linux apps.
E7 comes close (all but linux apps). I was hoping the N9 would be the one.
And yes, I would like to use my phone as a netbook, media player and possibly even games console (someone please turn a phone into an Onlive microconsole)
Meego was really the only game in town for my particular needs.
Pretty much my feelings. I want proper convergence, devices that can make calls and do phone stuff, store gps maps offline, have an fm transmitter and USB OTG, can connect to a monitor/tv and use a proper keyboard and mouse, have a proper filesystem (i.e. don't need some stupid itunes/zune software to move my data over - that's not a smartphone, that's a toy), and have the ability to readily run applications (not toy apps) on various differing formfactors (laptop/netbook/tablet/phone).
QT and Meego were all that I could see enabling this and now that Nokia has pretty much dumped all over it. Unless Intel really surprise me and come up with the goods with their Meego phone etc, I can't see anything with as much potential in the near future and I can't believe I'm so depressed over it.
The door to the promised land has been slammed closed, thanks a million Elop and the Nokia board of shortsighted twats. If I am ever so lucky as to meet any of you I won't tell what I'd say or do but rest assured you wouldn't find it pleasant.
Nokia has gone from a producer of handsets with multiple differentiating features, to a producer of one which has few, if any. And they're now competing in a stable of other manufacturers who also have few differentiating factors. The difference is their stablemates like HTC, LG, Samsung, Dell haven't bet the farm on WP7 like Nokia has. I really don't see why anyone in Nokia considers that a good idea. They've just lobotomised their company.
It may well be that neither Symbian nor MeeGo had any substantial chance of long term recovery and their strategy needed some correction. But this is just nuts. They may as well licence the Nokia brand out to HTC or some no-name OEM for all the difference it would make to the phones they'll be making from now on.
I strongly feel that either webOS or Android would have been far better choice. Both would offer that differentiating factor while allowing Nokia to compete with other smart phone manufactures. Oh well, so long Nokia.
"Nokia has gone from a producer of handsets with multiple differentiating features, to a producer of one which has few, if any."
I would rewrite this as: "Nokia has gone from a producer of handsets with multiple differentiating features but no customers to a producer of handsets that now at least might interest somebody"
These Nokia-Microsoft posts are now completely pointless. Explain to me, exactly, how you are able to conclude the the largest single handset supplier on the planet, has "no cusomers"?
The patent stupidity of that statement speaks for itself, like many of the others here. Lack of visibility in a specific segment of an individual market != no customers.
Get a life and learn to read.
Dwwb
Pretty much the same feeling about a converged Meego device. That's really what I wanted.
But it seems clear to me that Nokia has convergence in mind alright, just based on Windows. Think about it:
1) MS announced support for ARM in W8. Everyone thought about low power server, but this also opens the door to using the same core for their handset offering;
2) WP7 is a new UI on top of an old (and poor) embedded OS. They want anyone (but them, when it suits them of course. That's how MS likes competition as we all know ;) to use the .Net VM as they don't want any dependency on this poor OS. Why? Because they know they'll have to change the foundation for a modern kernel as soon as they can.
So it's pretty clear to me that MS, in the time frame of W8, will be like Apple: the same foundation for phones, PC and server OS. And all .Net phone applications will be able to run unchanged in phone mode.
But then, when docked to a larger screen and keyboard, the phone will be able to be used as a computer. And support any regular PC applications, for ARM.
Yes, for ARM so all current x86 applications will need to be ported to ARM. I'm sure it's not so complex and MS will do it for Office and Outlook. And if it works, others will follow.
They could also stay with x86 (future Atoms) but I'm not sure they care. Getting rid of Intel and moving to a more dynamic ecosystem with so many CPU provider is better. A smaller part of the cake for the chip vendors, so possibly a bigger for the software and service providers. And recompiling for an ARM W8 shouldn't be too difficult.
On the other hand, if the OS changes there's little interest in keeping the same instruction set. It's Intel who gets the shaft here.
So you read it here: Nokia will help to re-establish MS monopoly in the new converged era. By using all those lazy people eager to find the Office and Outlook they know (for biz people at least). And with the trend of using the same device for personal use and work, this office addiction could help in the consumer space.
Aaaaargh! Hopefully a linux based alternative will emerge. But the champion is Android, and Android is too short for a converged solution (see the Moto Atrix, nice idea but too limited). And Google only care about getting you to their service. So will they make the effort (and spending) to offer you a proper local OS too?
I would be very depressed to see the same kind of crap in the next coming generation. But it seems that's what Nokia has in store for us.
"The consensus is that Nokia will have to get a Windows handset out this year, alongside some sort of MeeGo device that the company is obliged to launch as a toy to mollify the hackers and geeks."
How is it that after all is said and done that you don't get it yet? Elop needs a phone OS NOW!
MeeGo isn't ready for prime time yet. So Elop's options are limited.
I have to glame El Reg because while the author is reporting what people are saying, its a well known and ugly truth.
The sad fact which has been reported by El Reg and some comments on other Nokia articles, is how Nokia put itself in the position where they had to pick the 'lesser of two evils'.
And outside of the OS, there is some synergy with Microsoft.
The flame is for El Reg and not Nokia,
People who think Nokia has been duped by Elop must think very little of the Finns on the Nokia board. I suspect much more likely that they headhunted Elop because they already wanted to go Microsoft. Doesnt that make a lot more sense?
Secondly Nokia did not want to be dependent on Google. By partnering with Microsoft they had much more influence in the relationship than they did with Google, e.g. the Ovi maps will now be the default Windows Phone 7 maps for all WP7 OEMs, including HTC and Samsung, and Nokia will get royalties from them. Google refused to make that deal.
Lastly, most people who buy Symbian smartphones buy it for the Nokia brand, not because they are convergence techies (unless anyone is making the bizarre claim that until recently techies outnumbered regular users) . Those people will appreciate an upgraded user experience with Windows Phone 7.
...there's no other explanation why would someone communicate these things SOOO BADLY that he literally WIPED OFF 30% of Nokia in FEW DAYS TIME.
If that's not an incompetent idiot at the helm than I don't know what is it.
As for WP7: it's the WORST mobile OS out there as of today, lacking even basic features - I don't know anyone who tried and bought one, everybody I know simply put it back and moved on to the Android line.
R.i.P. Nokia
I think about it as a carefully staged plot. Assuming this:
- Microsoft has 1% of the phone market
- Nokia has 50% of the phone market
(figures are off the top of my head but they are just to illustrate the idea)
In a year's time, we'll see Nokia+Microsoft alliance have 5% of the phone market.
- Nokia collapses 10-fold but manages to stay alive at that level. Nokia shareholders, developers, and Finland as a country take this blow. Too bad for them.
- Microsoft now controls 5% of the phone market. 400% growth. Profit!
(mine is the one with tinfoil hat)
@whiteafrican
Android market transaction fees:
http://market.android.com/support/bin/answer.py?hl=en&answer=112622
Advertising income:
http://www.engadget.com/2010/10/05/googles-eric-schmidt-says-android-is-profitable-could-eventual/
"Are you profitable if it was broken out as a separate business?"
Rubin: "Yes."
http://www.guardian.co.uk/technology/blog/2010/dec/07/android-profitable-rubin-google
In your article you ask, "On the tablet question, the thought is that Microsoft will be able to convince Nokia to go with full Windows."
I don't understand your reasoning behind this - what part of "Elop used to work for Microsoft" don't you get? There is no convincing necessary.
Nokia should support both, just build hardware ranging from good but cheap to the best
There is a danger that windows mobile could be left behind by the speed on innovation on the android platform
No scratch that windows mobile WILL be left behind by the speed on innovation
opens source rules of that there is no doubt !
( I am sure some less informed person will disagree ;}o )
@pblakez
Yes, they knew they needed it over a year ago and it's not here yet. Yet somehow Microsoft is going to both integrate full multitasking - infinitely harder - and also port their phone OS to a diverse basket of Nokia platforms by the end of THIS year. It is to laugh. Not. Gonna. Happen.
IMHO Microsoft doesn't intend to actually deliver a working OS to Nokia. Ever. They never did deliver for Sendo, and came out of that deal well.
I remember when Symbian was the OS that drove the Psion personal organiser box.
And EVEN THEN I considered it 'better than Windows (95)' because it NEVER CRASHED (not during my 4 years using it, anyway).
What feature of Symbian was it that defeated development into an enhanced platform for smart phones? My best guess is the problem was with the developers/ designers. ;=(
Oh well - I suppose David Potter et al did OK out of Symbian, at least.....
Full forum of exciters???!!!
I rather to write epitaphs to WHPH 7.5 (this is will be Nokia Model).
J. Harlow hides the negative attitudes of developer’s Nokia stuff to this project.
Nobody trusts this bachelor of psychology. She is not ever MBA(???)
Without mobile experts support, I would bet it will fail. Do not tell me Symbian OS is rubbish. Rubbish is AVKON or S60. But, still no one mobile OS has full and working real multitasking. Hence, does not tarnish the mobile experts of Symbian until you still beat by them.
J. Harlow will use soon a “golden parachute” to MicroSoft. 25% shares down unforgivable management “dilettante” ever for MBA that she doesn’t have.
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