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Nokia rumored to shift toward Silicon Valley, Windows Phone 7

post #1 of 108
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The world's top mobile vendor is reportedly considering plans to move its executive decision making from headquarters in Espoo, Finland to Silicon Valley in California, and is potentially eyeing an alliance with Microsoft in a bid to compete against Apple and Google in smartphones.

Once the only significant smartphone platform worldwide outside of North America's bubble of Windows Mobile, BlackBerry and Palm OS, Nokia's Symbian has been pummeled by the launch of Apple' high end iPhone, then by mass market Android models, and thirdly by low end sales of Chinese phones, according to a report by TechCrunch detailing the company's fears as expressed in an internal memo.

Standing on a burning platform

The note, titled "standing on a burning platform" and written by Stephen Elop, the former head of Microsoft's Office division who was recruited by Nokia to turn the company around as its new chief executive last fall, reportedly depicts Symbian and MeeGo as competitive failures.

Update:Engadget reports the 1300 word internal memo compares Nokia's position to the story of a man on a burning oil platform and faced with the decision to die in a fire or plunge into the icy sea.

"After he was rescued, he noted that a 'burning platform' caused a radical change in his behavior," the memo reportedly says. "We too, are standing on a 'burning platform,' and we must decide how we are going to change our behavior."

It adds, "we have more than one explosion - we have multiple points of scorching heat that are fuelling a blazing fire around us. For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem."

"In 2008, Apple's market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.

"And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under 100. Google has become a gravitational force, drawing much of the industry's innovation to its core."

The memo also notes, "the first iPhone shipped in 2007, and we still don't have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable."

The memo concludes saying, "we are working on a path forward -- a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But, I believe that together, we can face the challenges ahead of us. Together, we can choose to define our future."

Symbian is Nokia's mainstream smartphone OS, recently converted into an open source platform. It has been unable to recapture the attention of users and developers distracted by Apple's iOS in recent years.

MeeGo is Nokia's parallel, Linux-based project aimed at delivering netbooks, tablets, smart TVs and smartphones, similar to Android. It is the merger of Nokia's own Maemo project (which powered its iPod touch-like Internet Tablet and N900 handheld computer) with Intel's Moblin effort (intended to to create a netbook OS capable of running on Atom chips independent of Microsoft's Windows 7), a partnership that was revealed just a year ago.

Last week in Nokia's last earnings conference call, Elop told analysts "we must build, catalyze and or join a competitive ecosystem" in order to adapt in the fast moving mobile space.

That prompted speculation that Nokia may either license Microsoft's Windows Phone 7 or Google's Android. Berenberg Bank analyst Adnaan Ahmad subsequently wrote that "Nokia is no longer in denial," while recommending that the company scrap MeeGo, saying "its the biggest joke in the tech industry right now, and will put you even further behind Apple and Google."

Out of the frying pan

In recent years, Nokia has become a staunch proponent of open source development, launching Maemo Linux on its Internet Tablet in 2005, and then buying out its Symbian partners in late 2008 to convert the platform into a open source project known as the Symbian Foundation, in a model similar to Netscape's conversion into the open source Mozilla Foundation. Last year, Nokia announced Maemo's merger with Moblin.

At the same time, in late 2009 Nokia began selling a new netbook powered by Microsoft Windows, named the Nokia Booklet 3G. The replacement of its chief executive last fall with a former division head of Microsoft has only added fuel to the flames of rumors surrounding a series of partnerships between Nokia and Microsoft.

In late 2008, bloggers began anticipating that Nokia would install Zune Marketplace software on its phones, boosting the prospects for Microsoft's Zune music player. A year later, Microsoft actually announced plans to bring mobile editions of its Office mobile apps to Symbian. That project does not appear to have materialized, although Microsoft has brought its Office OneNote app to Apple's iOS.

Despite its open source efforts, Nokia's Scandinavian home has historically been heavily tilted toward Microsoft, even as Apple's iOS devices began to invade, followed by rapid uptake of Android smartphones. Were Nokia to shift into an alliance with Microsoft, and in particular one that moved its center of gravity to California, its base audience of open source advocates and European and especially Scandinavian loyalists might lose some of their enthusiasm for the brand.

Apple faced similar issues when Steve Jobs attempted to quickly transition the company's Macintosh platform to his own Unix-based NeXTSTEP after becoming the company's new chief executive in 1997. Resistance from Mac users and development partners derailed those high speed plans and replaced them with a milk run strategy that slowly evolved in a glacial transition to Mac OS X that didn't fully materialize for another half decade.

A fresh injection of boring, Android on the side

Microsoft has admitted that its Windows Phone 7 strategy similarly expects to take years to achieve the sales of iOS or Android. Initial demand for WP7 phones has proven disappointing to Microsoft's partners, including flagship partner LG, which referred to the new platform as being "a bit boring" but potentially attractive to low end smartphone buyers with simple needs.

While LG continues to support WP7, it is also promoting new Android phones, holding out the prospect that Nokia could have its WP7 and eat Android, too. Samsung is similarly pursuing dual strategies with its own Bada and Android, and HTC already sells both WP7 and Android devices, with plans to deliver its own BREW-based low end smartphones as well.

By aligning WP7 with Nokia, which still makes most of the world's mobiles and, according to IDC, sold 28 percent of global smartphones in Q4 2010, Microsoft could finally find traction for WP7, if Nokia buyers and the market in general responded positively to new Nokia WP7 phones.

A partnership with Microsoft could also help Nokia to enter the North American market that Symbian has never been able to penetrate. So far however, retailers in both the US and Europe report that customers have largely opted for Android over WP7, as both typically ship on identical hardware from the same vendor.

Nokia is expected to reveal more about its future plans for Symbian and MeeGo, and potentially WP7 and Android, this Friday at the company's annual Capital Markets Day event.
post #2 of 108
dam, and I just sold all my Microsoft stock
post #3 of 108
If there was a stronger WP7 presence I wonder whose share percentage would drop the most, iOS or Android? (I'm guessing Android)

RIM would be in even bigger trouble than they are now, imo.
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post #4 of 108
Wow, a smartphone software failure and a smartphone hardware failure team up!!

Nokia would be smart to just swallow its pride and license Android. They're capable of making decent phones, but they're about 5 years behind in the OS department. But I live in North America so what do I know?
post #5 of 108
I am actually surprised that they are not going with android.

I suppose the competition will help Apple stay on it's toes and remain innovative.
post #6 of 108
Said it before -- WP7 is a very smooth, elegant and modern OS. No bs skins and fragmentation like Android and doesn't suffer quite the same closed atmosphere as iOS. Very wise move by Nokia and Microsoft.
post #7 of 108
How many of you techies like me remember drooling over them awesome yet expensive Nokia phones in the early 2000s? But guess what... The iPhone and the Android stuff have pawned any high end Nokia from back in the day. Nokia's business model has met it's end.
And let them pimp the Windows 7 OS, with it's offing licensing fee. That ain't going to help them. It boils down to hardware sells and the market is as competitive as ever.
IMHO, there is no way Nokia is going to be able to bring back the good old days with iPhone and Android tearing sh** up.
post #8 of 108
Quote:
Originally Posted by euler View Post

I am actually surprised that they are not going with android.

It doesn't sound like the European carriers would allow Nokia to go with Android.
post #9 of 108
So . . . the blind leading the blind.
post #10 of 108
Quote:
Originally Posted by acslater017 View Post

Wow, a smartphone software failure and a smartphone hardware failure team up!!

That's my first impression too. But which software failure will they pick WP7 or Android?
post #11 of 108
Quote:
Originally Posted by euler View Post

I am actually surprised that they are not going with android.

I figured they'd move to WP& when it was announced that Elop was going to be CEO.
post #12 of 108
Why aren't they moving their offices to Redmond, WA, then?
post #13 of 108
Sounds more like Nokia wants in on the tablet market using Windows 7 not cellphones.
post #14 of 108
Quote:
Originally Posted by iLiver View Post

Sounds more like Nokia wants in on the tablet market using Windows 7 not cellphones.

Bingo!
post #15 of 108
The assumption seems to be if they do exactly what Apple and Google did then they are bound to succeed. There may just be a flaw in that logic.
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post #16 of 108
Quote:
Originally Posted by quinney View Post

Why aren't they moving their offices to Redmond, WA, then?

Too far for the spies to travel from Cupertino?
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post #17 of 108
Quote:
Originally Posted by iLiver View Post

Sounds more like Nokia wants in on the tablet market using Windows 7 not cellphones.

Or perhaps we are looking at this backwards, maybe MS has made them an offer they can't refuse?

BTW You put solipism on your ignore list? Oh I am lysdexic it's 'slopsism'.
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post #18 of 108
i really dont like Windows 7 tablets, they need to make a version of WP7 for tablets similar to what android is doing with honeycomb. Maybe Nokia wants that?
post #19 of 108
Wow, it really seems Nokia, RIM and MS are floundering about. Sounds like they are going thru a very tough period.
post #20 of 108
Nokia is a take over target, palm taken by HP, who wants them RIM is also a take over target
now if you are MS and want to sell more w7's you could by the company or just pay them to use your OS, cheaper, MS wins because they get the huge numbers that nokia has. customer's lose because is MS, and well w7 and not great.
BUT ms gets more penetration and left less behind, and balmer looks like he is growing his brand
remember is also about balmer saving his own arse
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post #21 of 108
No faster way to die than join the ranks of the cloners. And Nokia could die even faster by using the horribly failed Windows Phone OS. Not only would they have to send boat loads of money to Microsoft for the pleasure, they would have nothing to set them apart from the pack of clones. A sure way to fail.

It would be great for Apple, they could snatch up Nokia and all its patents to sue all the cloners into oblivion.
post #22 of 108
Actually I think this would be a great move for both Nokia and Microsoft. I would take it even further and suggest Microsoft exclusively license Windows Phone 7 to Nokia.

Nokia already has the hardware expertise and reach to successfully get WP 7 out into the world.

Together they can grow a much more congruent platform than fragmenting WP 7 across many different manufacturers. The way Android is now.
post #23 of 108
I see no reason for Nokia to throw in with the mess that is Android at this point.



Quote:
Originally Posted by island hermit View Post

If there was a stronger WP7 presence I wonder whose share percentage would drop the most, iOS or Android? (I'm guessing Android)

RIM would be in even bigger trouble than they are now, imo.

Quote:
Originally Posted by acslater017 View Post

Wow, a smartphone software failure and a smartphone hardware failure team up!!

Nokia would be smart to just swallow its pride and license Android. They're capable of making decent phones, but they're about 5 years behind in the OS department. But I live in North America so what do I know?
post #24 of 108
It isn't horribly failed. MS just has no direction for it. MS would do better to exclusively license to one partner and build a stable platform.

Quote:
Originally Posted by bullhead View Post

No faster way to die than join the ranks of the cloners. And Nokia could die even faster by using the horribly failed Windows Phone.
post #25 of 108
LG, HTC and Samsung are already making WP7 hardware, its too late to have an exclusive deal with Nokia
post #26 of 108
LG, HTC, and Samsung care much more about Android than they do WP 7. Microsoft could buy out their contracts or exclusively license WP8 to Nokia. Either they do something radical or watch all of their effort go down in failure.

Quote:
Originally Posted by pit5000 View Post

LG, HTC and Samsung are already making WP7 hardware, its too late to have an exclusive deal with Nokia
post #27 of 108
I can actually see the logic of Nokia teaming up with MS, especially if there were inducements to sweeten the pot.

MS desperately needs some market penetration to get WP7 in front of consumers, and to get past the "also ran" perception. My impression is that it's actually a pretty cool OS (although it certainly needs some improvements), but without any kind of adoption MS may never get the chance to make its case.

Nokia has a ton of name recognition and hardware chops, but desperately needs a functional, modern OS. At the rate they're going they'll be completely irrelevant by the time they get something made, if they even have the talent to do that.

Both companies are up against a wall, time wise. If WP7 is slow to catch on, there might not be any room left in the market. If Nokia goes another year without a competitive smart phone, they might be done in that space.

But a Nokia WP7 phone could happen right away. It could be "Nokia-fied", maybe with exclusive features. Hell, MS could make Nokia the sole hardware partner (although that would of course be highly out of character) and declare the MS Nokia Phone 7 some kind of match made in heaven. They could work it out along the lines of the Sony-Ericsson partnership.

I think Android takes all the air out of the hardware licensee model and MS would be smart to do an exclusive hardware partner deal. It would mean they could do tighter coupling of software, with more control over the final user experience (which I believe even MS has noticed isn't entirely a bad thing).

I kind of hope that's how it goes down, I'd like to see WP7 have a chance as another player in the market.
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post #28 of 108
Quote:
Originally Posted by TenoBell View Post

It isn't horribly failed. MS just has no direction for it. MS would do better to exclusively license to one partner and build a stable platform.

submit to failblog.org

nokia is looking to jump off the burning platform, which is what they should call their OS,
we've heard of burning monkey solitaire well you have now
standing on burning platform, oh ya symbiam, meego meewent, meeweewee
nokia is in a world of hurt even more so than rim, no loyalty at all
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post #29 of 108
Quote:
Originally Posted by island hermit View Post

If there was a stronger WP7 presence I wonder whose share percentage would drop the most, iOS or Android? (I'm guessing Android)

RIM would be in even bigger trouble than they are now, imo.

Long term, RIM. WP7 has enormous potential in enterprise market with combination (and capability do do what they are pleased to) of in-house technologies like SharePoint, Exchange, W7 and WP7.
post #30 of 108
I totally disagree. Nokia can still succeed if they make some seriously radical changes.

Quote:
Originally Posted by NOFEER View Post

submit to failblog.org

nokia is looking to jump off the burning platform, which is what they should call their OS,
we've heard of burning monkey solitaire well you have now
standing on burning platform, oh ya symbiam, meego meewent, meeweewee
nokia is in a world of hurt even more so than rim, no loyalty at all
post #31 of 108
Yes I want to see Nokia and Windows Phone succeed. Less competition helps no one.

Quote:
Originally Posted by addabox View Post

I kind of hope that's how it goes down, I'd like to see WP7 have a chance as another player in the market.

You can't beat free.

Quote:
I think Android takes all the air out of the hardware licensee model and MS would be smart to do an exclusive hardware partner deal.
post #32 of 108
Quote:
Originally Posted by TenoBell View Post

LG, HTC, and Samsung care much more about Android than they do WP 7. Microsoft could buy out their contracts or exclusively license WP8 to Nokia. Either they do something radical or watch all of their effort go down in failure.

While I agree with that, think about those being 1st generation of WP7 phones. I think they look much better than first commercial gen of Androids (relative to their time), back in 1.5 and 1.6 days.

But regardless, I'd like to see Nokia with WP7.
post #33 of 108
Remember how well it worked out for Palm when they licensed Windows Mobile?

They instantly diverted half of their OS market share to Microsoft, didn't grow at all, Palm OS had even less reason/revenue to get updated, Microsoft delivered crap that was equally as bad as the failing Palm OS, and now Palm got to compete with every other WiMo licensee.

Nokia already has 3 phone OSs, a Linux distro for mini-puters, and Windows on a mini laptop. Adding WP7 would be a rather drastic experiment, but could result in giving Microsoft a way to stay in the game. Of course, it could also hasten Nokia's demise as a smartphone vendor to take a dump on its existing customers who clearly do not want WP7 phones or they'd be buying them.

Maybe they could borrow New Coke as a strategy and release New Nokia phones running WP7, and then after everyone freaks out they can say, oh you all wanted Nokia Classic! Here's the crap we used to sell before making that huge blunder!
post #34 of 108
I think both Nokia and RIM will be at death's door in less than 5 years unless Microsquishy buys them.

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post #35 of 108
Not at all the same situation.

WP 7 is a far better OS than the old Windows Mobile.

Quote:
Originally Posted by Archos View Post

Remember how well it worked out for Palm when they licensed Windows Mobile?
post #36 of 108
Elop symbian maemo moblin zune meego from Espoo to ms7cali, maybeeee.
post #37 of 108
Good thing that they identified their problems. Now, let's hope that they don't jump from a burning platform to a sinking ship.
post #38 of 108
What an absolutely awful memo. This guy is in over his head.

A memo like that will do two things:
1) Alienate all the employees who are passionate about Nokia and its products
2) Terrify employees and cause a mass exodus of people who are talented and employable because they now know with certainty that they are on a sinking ship

Much of what he says in the memo is true, but that doesn't mean he should ever say it and especially not in that way. He just made every employee feel ashamed and didn't tell them why they should be proud.

I give this guy less than a year.
post #39 of 108
everyone should read the full memo:

http://www.engadget.com/2011/02/08/n...honest-burnin/

great take on the market by someone who is not an Apple or Android fan, but instead is getting whipped by both. as he points out repeatedly, it's really all about the ecosystems.

combined, Nokia and MS do have plenty of ecosystem pieces. MS always has. and its enterprise ecosystem is still tops. but it has never been able to put it all together seamlessly - unless your XBox is the center of your life (and if it is and you're over 18, you're in real trouble). WP7 should have been aimed at RIM, which is also dead in the water and could be taken down now, but MS opted for the "youth/social market" instead, to leverage its self-perceved XBox success i guess. except XBox Live can never be more than a niche market - just ask Zune.

i don't know how adding Nokia's undoubted hardware skills to the mix solves that problem. but Nokia does have superior global marketing ID, while MS would help it in the USA. maybe that is a start ...

and what do they have to lose? they are both desperate.
post #40 of 108
even if Nokia + MS works, i dont see their market share getting pass single digits vs iOS and android
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