Analyst: Apple could benefit from Nokia, Microsoft partnership

Posted:
in iPhone edited January 2014
Commenting on Nokia's recent announcement that it will abandon its Symbian mobile operating system on smartphones in favor of Microsoft's Windows Phone OS, one analyst claimed that Apple could stand to benefit from the transition.



In a note to investors Friday, analyst Mike Abramsky of RBC Capital Markets said that the new partnership between Nokia and Microsoft may "inadvertently help" its competitors, namely Apple and Google Android, and possibly BlackBerry maker Research in Motion.



Nokia Chief Executive Stephen Elop, who formerly served as Microsoft's Business Division head, and Microsoft CEO Steve Ballmer issued a joint open letter Friday announcing the strategic alliance.



"Today, developers, operators and consumers want compelling mobile products, which include not only the device, but the software, services, applications and customer support that make a great experience," Elop said at a joint news conference in London. "Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivaled global reach and scale. It's now a three-horse race."



The announcement came just days after Elop had issued a surprisingly candid internal memo comparing Nokia's situation to "standing on a burning platform." Elop compared competition from Apple to an "intense heat," admitting that the iPhone maker had "disrupted the market by redefining the smartphone."



According to Abramsky, the deal between Nokia and Microsoft "could produce a stronger combined platform" on paper, but may instead result in gains for rival smartphone platforms.



The analyst notes that if successful, Microsoft could see its share of the global smartphone market rise from less than 5 percent to 30-35 percent. On the other hand, "the partnership may accelerate competitor share gains to Android, Apple and RIM," Abramsky said.



Apple, Android and RIM could present "possible disruptions to Nokia and Microsoft while making it work," though Microsoft has promised priority and customization to Nokia. Also, "possible carrier and Enterprise caution on adopting Nokia/Microsoft pending roadmap/product visibility" could affect early sales of Nokia's forthcoming Windows Phone 7 handsets.



Abramsky also speculated that existing Microsoft OEMs may further favor Android because of the increased competition. Finally, "developer hesitation, pending visibility to traction for the platform" could result in a boost for Apple and its rivals.



The analyst concluded by noting that the Nokia/Microsoft partnership could cause "ripple effects" to the smartphone industry and along the supply chain, "including setting up bigger battles between Nokia/Microsoft and Android/Apple/RIM for platform dominance at carriers, emerging markets, content and developers."
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Comments

  • Reply 1 of 31
    docno42docno42 Posts: 3,755member
    Quote:
    Originally Posted by AppleInsider View Post


    Abramsky also speculated that existing Microsoft OEMs may further favor Android because of the increased competition. Finally, "developer hesitation, pending visibility to traction for the platform" could result in a boost for Apple and its rivals.



    Meh - manufacturers weren't exactly flocking to MS anyway. The allure of "free" Android that they can molest at will combined with a probably justified fear of being "zuned" at some future point had already done WP7 in.
  • Reply 2 of 31
    Nokia does not have any pull with customers as far as smartphones are concerned. Their market share is based solely on cheap phones and psuedo-smartphones.



    Teaming up with M$ will achieve them nothing. The phones won't be any better than Apple's or Android.



    If they pull the Symbian phones off and replace them with more costly M$ phones then their market share will plummet.
  • Reply 3 of 31
    Quote:
    Originally Posted by DocNo42 View Post


    Meh - manufacturers weren't exactly flocking to MS anyway. The allure of "free" Android that they can molest at will combined with a probably justified fear of being "zuned" at some future point had already done WP7 in.



    Yeah. Don't see a noticeable impact on Apple here. Also I don't see the kind of leadership taking hold that the MS/Nokia tandem would need. Who's in charge of this effort? Ballmer? Nokia execs? Nobody in particular? Then you look at the so-called 'independent' efforts of various sorts cooked up within MS in the past - they've all failed. Victims of corporate politics, ennui, whatever.



    When Jobs came back to Apple, one of the first things he did was 'clean out the deadwood' there. He had to install, or re-install if you like, Apple's core culture. That's not happening at either MS or Nokia. They want to change their destinies, but they don't want to muss their hair doing it.



    Fail.
  • Reply 4 of 31
    Now Nokia is on board wil WP7, LG, Samsung, HTC will need to weigh their resources. Perhaps they will divert more R&D efforts on WP too, sort of intensified internal turf war. In the long run I think the future of Android is in the hands of cheap makers in China, Samsung, Mot will find it is hard to compete with every other guy who can throw out an Android in a couple month. WP on the other hand weeds out small players, so it may maintain a higher end product.
  • Reply 5 of 31
    Boy, if this in-depth analysis I should have this guys job. If it works, MicroNokia could pick-up 30%-35% of the market. (Obviously no help to Google/Apple). But, if it doesn't - it will help Google/Apple. Well, duh.
  • Reply 6 of 31
    melgrossmelgross Posts: 33,510member
    Obviously, this move will benefit Nokia's competitors. android makers will benefit the most, but so will everyone else. Apple more so than RIM, I would imagine.



    And if it's true that Apple is coming out with a $200 phone, they could benefit widely.
  • Reply 7 of 31
    So...



    Microsoft has been seeing the regular departure of senior managers over the last year.



    Next they turn up with senior jobs at competitors



    And now Nokia chooses Microsoft





    You got to wonder about that. Got to wonder....





    After all, what better strategy than to send your generals into the field intentionally so that you can get passed trying to negotiate with your competitor, now you just call up old mate.



    Elop were you the greek gift?



    I'm trying to think if this can be related to a law or something.. any ideas?
  • Reply 8 of 31
    Quote:
    Originally Posted by tbsteph View Post


    Boy, if this in-depth analysis I should have this guys job. If it works, MicroNokia could pick-up 30%-35% of the market. (Obviously no help to Google/Apple). But, if it doesn't - it will help Google/Apple. Well, duh.



    How I interpreted it-

    Abramsky: There's going to be some winners and some losers.
  • Reply 9 of 31
    bagmanbagman Posts: 349member
    Quote:
    Originally Posted by cy_starkman View Post


    So...



    Microsoft has been seeing the regular departure of senior managers over the last year.



    Next they turn up with senior jobs at competitors



    And now Nokia chooses Microsoft





    You got to wonder about that. Got to wonder....





    After all, what better strategy than to send your generals into the field intentionally so that you can get passed trying to negotiate with your competitor, now you just call up old mate.



    Elop were you the greek gift?



    I'm trying to think if this can be related to a law or something.. any ideas?



    I think it was obviously in the mind of Nokia awhile back that they needed to get in bed with MS, so hiring Elop made the most sense. Who knows, they may have been more interested in Hurd, but they knew that HP had already bought their way into software with the Palm purchase, so they looked to Redmond finally. I wouldn't be surprised to find out MS had approached Nokia with the idea in the first place. This has more of the ring of marrying heads of state to form strategic alliances against common enemies (Apple, Android, and now HP) than the idea of a Trojan Horse being planted by MS in the form of Elop, IMHO.



    Just goes to prove that sitting in scandinavian saunas all day long in can cook your brain big time.
  • Reply 10 of 31
    .



    (just hope most of you understand metaphors)

    .





    Partnering of Nokia and Microsoft



    Is the same as Stanley Steamer



    Joining up with a Coal Fuel Company



    .



    (dig my drift daddy-o)







    .
  • Reply 11 of 31
    Elop spelled backwards is "pole"



    "lope" is an anagram of Elop, as is "pe-ol," which could be construed as slang for meatus (pronounced "pee-'ole")



    Elop is pronounced "ell ope" in Finnish.
  • Reply 12 of 31
    jmmxjmmx Posts: 341member
    IMHO



    They should have stock to MeeGo and brought RIMM into the partnership there. That would have presented a formidable partnership. They were faced with 3 devils:



    1- Android - the Google centric OS. Ruled by Google to serve Google's interest. NOt a good choice.



    2- Windows - In some senses this seems like a good choice. MS needs them as much as they need Windows, However - if they are successful, then that will change and they will be serving a very greedy, and ever more powerful master.



    3- MeeGo - The devil here is in the details. Creating an OS is no trivial affair. One can never be sure if one has it right until it is in the field. MS has not been particularly good at this, but their dominance has made it "acceptable" in the past. Now they are in different waters. With Nokia combined with their economic weight, they have the ability to forge ahead. With MeeGo, any serious error could have led to total rejection of the platform - a complete disaster.



    So Nokia capitulated and went with the easy way out. To my mind, this does not look good for their long term future.
  • Reply 13 of 31
    I think that may have potential. In some ways, the announcements almost sounded like some kind of "pre-merger". It certainly sounds as if Nokia may be getting preferential treatment as far as Windows Phone goes.



    The big downside is the lack of a tablet using the same technology as the phone for who knows how long.
  • Reply 14 of 31
    Quote:
    Originally Posted by AppleInsider View Post


    "Today, developers, operators and consumers want compelling mobile products, which include not only the device, but the software, services, applications and customer support that make a great experience ... "



    The group think that produced the above press statement is just bone-headed. They figure out why Apple has been so successful lately and then they go and get it backwards. It's just a tiny thing, but the fact that "great experience" is tacked on to the end like an after thought shows how off course they are already. Nobody gives a crap about the rest of the B.S. sandwich they served up. The fact that Elop and Ballmer signed off on it show they really don't get it.



    Maybe I'm being nit-picky, but Apple would have just said "great experience" ... meant it ... and left it at that.
  • Reply 15 of 31
    Quote:
    Originally Posted by penchanted View Post


    I think that may have potential. In some ways, the announcements almost sounded like some kind of "pre-merger". It certainly sounds as if Nokia may be getting preferential treatment as far as Windows Phone goes.



    The big downside is the lack of a tablet using the same technology as the phone for who knows how long.



    Or a marriage of boat anchors? The real problem it seems to me, is that Microsoft can't afford to get too chummy with any of their OEMs. If it looks to any of Microsoft's partners like they're not in the same place in the food chain as Nokia, any one of them could defect to or stay with Android. Microsoft can't keep order in this house they way they could with the Windows OEMs, with lead pipe persuasion.
  • Reply 16 of 31
    They were both forced into this deal. They really had no other choice. It's do-or-die desperation time for these behemoths. Combining two dinosaurs won't produce a mammal. This deal will obviously help Apple more as it really focuses more on stemming the Android tide from Samsung, LG, SE, HTC and Motorola than the iOS devices. Sure they want Apple's action as well but their main worry is Android. This deal buys Apple some time to come up with a more comprehensive market share strategy in the midrange to low-end segments of the mobile market. Man, you just couldn't script things better for Apple. It's really amazing to observe how Apple is playing the competition like a drum.
  • Reply 17 of 31
    Quote:
    Originally Posted by Bagman View Post


    I think it was obviously in the mind of Nokia awhile back that they needed to get in bed with MS, so hiring Elop made the most sense.



    ...



    Just goes to prove that sitting in scandinavian saunas all day long in can cook your brain big time.



    Interesting.



    You know, you are probably on it. Which is even more sad. So Nokia hires the Microsoft guy cause he has Ballmer's phone number and can probably extract some more concessions.
  • Reply 18 of 31
    Apparently when you leave your job at microsoft you have a big "MORON" tattooed to your forehead as you have no real clue how to run a non-monopoly business. Why in the world would you announce this joint effort to the world up to a year before you can actually implement it in new devices, and before you've had time to effectively prepare/ transition your huge installed user base? Nothing says "abandon my brand" like "I'm going to dump the OS you are now using, because it has no future and I sold you crap, and we will not have something new to replace it for you for the next 12 months or so!



    This is why Apple has such tight security on info leaks on new products et al. (Remember the intel switch that went so smoothly after it wasn't announced until products were ready.) It is a competitive advantage to keep secrets and protect the existing business - sell what you have. Now all loyal Nokia users have been told / given permission to look for something else that is better because what they are using has no future. And that something new and better most certainly won't be MSFT/Nokia handsets. ROFLOL at this one.
  • Reply 19 of 31
    richlrichl Posts: 2,213member
    I think could work in the long term.



    However, I agree that this is an oppotunity for Apple, HTC, RIM, etc. Who is going to buy the 150 million Symbian phones that Nokia thinks it's going to sell over the next two years? Who is going to develop apps for an operating system on death row? I could see their smartphone marketshare plummet dramatically by the time that WP7 comes in.
  • Reply 20 of 31
    Quote:
    Originally Posted by RichL View Post


    I think could work in the long term.



    However, I agree that this is an oppotunity for Apple, HTC, RIM, etc. Who is going to buy the 150 million Symbian phones that Nokia thinks it's going to sell over the next two years? Who is going to develop apps for an operating system on death row? I could see their smartphone marketshare plummet dramatically by the time that WP7 comes in.



    Agreed.



    - Either they're looking for a buyout (M$ 's deep pockets could buy Nokia... and make them a hardware producer with huge experience suddenly)

    - or they have a Trojan in (I'd be surprised if Elop had no more shares from M$)...

    I hope, really, it's reason 1, since reason 2 would be so sad, business wise.



    However, from a developer's point of view, Android is a great system to program for (it's easy, Java which means 5 million programmers on board, and they'll own the bottom of the sales pyramid for years on, imho), and the iPhone owns the top of the pyramid. Both are moneymakers, though of course the top of the pyramid has the best time&effort to success ratio.

    WP7 means C#, which has a lot of developers, but it's annoying to code for, it has a very uncertain future and Nokia just sent a message to developers that it doesn't care about their time investment.

    If you've spent time learning Symbian, you're f****d, if you spent time learning MeeGo, you're so f***d. WP7? No, thanks. I'll join the bandwagon if it ever proves its worth, and during that time I'll be making money with iOS.
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