Nokia ditches Symbian, embraces Microsoft Windows Phone for new handsets - Page 3

Nokia!

You have entered the dojo of fail!

Prepare to fight!

People seem to think that Android is the greatest thing since sliced bread when it bared existed on one carrier 2 years ago. When you look at the rate the market is growing, trying to predict the next 2 years is foolish.

Nokia would have a much better relationship with Microsoft than being amongst the sea of OEMs using Android with Google. Plus, Microsoft has much more coherent control of Windows Phone 7 than Google does of Android (just see all the rogue crappy tablets revealed at CES before Honeycomb was announced).

Lastly, Nokia needs to attempt to make major inroads into the North American high end market again. Continuing with Symbian is rather silly. Android has tons of OEMs already. With NA being Microsoft's home market, they can spent a lot of marketing money on showcasing quality Nokia hardware.

That'll really piss Intel off.

MeeGo is the child of Moblin and Maemo. It was the only mobile OS that would run on x86. Now that it's days look numbered, Intel are without a mobile platform for its Atom chips. At least until Windows 8 comes out.

This really was bad news for Intel.

Nokia didn't really have a choice.

This is not about market share. Nokia has market-share coming out of their wazoo.
This was about profitability.

Every useful device starts out with healthy profits and then starts a decline towards being a commodity. Once it's a commodity, the profit margin is a 5% or so. The manufacturer can't add any more value. The value add is simply derived from putting the parts together.

See Dell and HPs profits on Windows PCs.

Nokia's mobile phones arrived at the commodity stop before anyone else. So where now?

Android is a non-starter. because it too is headed for commodity status.
Yes, it's cheap and massively popular. but phone manufacturers have simply no way to add value. The value add is being done by Google. And Google are not motivated to assist individual manufacturers. Any device HTC can ship, can be matched by Motorola. Or worse, matched by some no-name Chinese manufacturer.

All such open platforms accelerate the decline to commodity.

Window is also a licensed platform, but Nokia may be able to slow the decline, if Nokia can outperform the other Microsoft licensees.

The move will allow Nokia to slash billions off its annual R&D budget. If that cash goes back on the balance sheet, it will allow several more years of survival. It might buy enough time for Nokia to properly develop its own technology.

Is this going to work for Nokia? Actually I doubt it. I don't think there is the will to make this work. In all likelihood, their profit per handset will go up, but their sales will go down.

Is this going to work for Microsoft? Actually I doubt if they care very much. But with Nokia's carrier relationship they will certainly be able to ship more WP7 handsets.

C.

Don't ever forget, though, that we are talking about Microsoft. I honestly believe that this deal will go nowhere for Nokia... not until Ballmer is removed... but with M$ still getting billions in profits I can't see that day coming any time soon. Ballmer is stuck in the past... imo the man doesn't have an innovative bone in his body. Nokia needs innovation in hardware and in software... and they need to be able to trust their partner to help them move forward. Do the words Microsoft and trust go together?

[ on edit - as far as Google is concerned... give it another year or two and I believe that the fragmentation issue will actually begin to come back and bite the oem's who use the system... I also beleive that even if the Android system continues to grow it will be in name only... again (imo) the fragmentation issue will make each oem appear to have a separate system on their phones]

IMO, this is a win on some scale for everyone except for Android.

Microsoft benefits most, then Nokia, then Apple, RIM and HP indirectly.

MS will buy Nokia eventually.

They need to control the ecosystem and the way to do it is to control all the steps.

Trying to replicate the pc model with smart phones is what got MS in the position they are in now. They seem to realize that a new model is needed.

Wow, so that is even worse. A custom non compatible version of Windows Phone OS.

Outsourcing the most critical part of your core business, to a competitor no less, is an absolutely brilliant decision.

The world worst CEO (but best dancing monkey, though) joins an ex-employee of his to make their M$ shares more valuable through the sacrifice of a finnish company.
Just joking, it's illegal

Apple has always said that if you are serious about making software, you need to make your own hardware. Developing the two together gives much more opportunity for adding value.

After their experience with Windows PCs, HP seems like a convert to this point of view. But in their case they are brewing their own software.

I guess MS could buy Nokia and get into hardware.

I am just frightened that the offspring of two such engineering-led companies will be horrible looking babies.

C.

Nokia's assets:
-Symbian, an old but solid OS that requires an UI overhaul
-Meego, a good OS that's almost ready for prime time
-an impressive reputation for amazing device lifetime and solidity

What works in the middle of the Sahara? 70 years old Jeeps and 15 years old Nokias...

Let's have fun, and trash the three assets, it will probably yield interesting results...

I think I'm fit to be CEO for a major company, looks like the job's easy enough

One important thing you have to factor. Even in its current decline Nokia still sells as many phones as everyone else combined.

If they can make this work. WP would actually be the number one OS in the world.

Android is quickly going commodity. Android manufacturers are eventually going to either consolidate or run each other out of business.

I see your point. Nokia has to make some radical changes and don't have a great track record with that. This is something that could be a great success or a great disaster.


I think they do care. They have to care. The personal computer is about to entire its decline. Mobile devices are the next frontier. I think MS just does not have the corporate culture needed to change with the times. They will need to figure something out or get left behind.

Nokia isn't a software company. Hardware is the most critical part of their core business.

When you are the largest phone manufacturer in the world, who do you have to be compatible with?

I think if they cared, they'd go all-in, and do an exclusive deal with Nokia.

Currently, it looks like just another licensing deal, which fits into their "Well it worked for Windows" mantra.

C.

Nokia should use that money to implement the new Windows keys on their phone: Ctrl, Alt, and Del keys at least for the beginning. :-)

I agree. Nokia and MS should have done an exclusive agreement.

MS not doing an exclusive is more fear than apathy. The conservative corporate culture afraid of radical change.

Yeskia is perfect name for Steve Bummer's new product

Former Nokia exec Tomi Ahonen thinks this move is insane.

knew this was coming the day Elop got the Nokia job last September. but i didn't expect such a complete sellout to MS.

first, there was no word about Ovi, but if Nokia dumps Ovi and uses only Windows Marketplace and other MS sales fronts for content and services, then it becomes totally dependent on MS for its "ecosystem." and that would be irreversible, leaving Nokia essentially a permanent MS captive.

second, going "open source" with MeeGo is a joke. look what happened to the "open source" Symbian foundation - death. this was probably just a face saving token move demanded by Nokia's board of directors, to maintain a pretense Nokia still has some potential future OS independence from MS. but it doesn't.

third, while it sounds great, combining the efforts of two badly screwed-up corporate cultures to develop a merged hardware/OS design process is going to be a fiasco. there will be turf battles at every level up and down the ladder - because everyone on each side in MS and Nokia is fighting to save their jobs/power.

so the new line of Nokia WP7+ products that will finally launch (how soon?) with great hype will be a mish mash - not bad, but not compelling and remaining an also-ran in a crowded marketplace (just like WP7 now). Nokia's smartphone sales will stay flat while its Symbian sales wind down. resulting in a downward spiral of growing annual losses and dropping stock prices.

however, the Euro regulators will never allow MS and or any US company to outright take over Nokia. so in 4 or 5 years, the sucked-dry husk that will be left will probably "merge" with one of the growing Asian OEM's.

not necessarily. most of nokia's phones are also not smartphones.

Couldn't have said it better myself

Microsoft Buys Nokia for $0B

Nokia's whole announcement is around how they have failed at software and are losing market share and relevance because of it. Low end phones are commodity...there is little money there. Nokia is not going to grow by selling commodity hardware.

All the money is with smartphones and tablets. Hardware is commodity until Apple innovates again...look at all the iPhone hardware clones now. Alls clone makers can do is pad spec sheets. Hey i have a camera that is .1 megapixel more! I have two hdmi outputs! I give you 1MB more RAM!

The only real differentiator is the software stack. HP saw this and bought Palm. That is why RIM is never going to use Android. Software is the most important part.

Who has ever enjoyed a sucessful partnership with Microsoft in the mobile space? Anyone?

I smell a possible merger or takeover down the road if this "strategic alliance" demonstrates potential, tho' Finnish pride and other factors could make this less likely. And many such alliances "come a cropper."

MS has been taking notes on Apple's software for decades. Now that AAPL has surpassed MS in market cap, I suspect they've been taking notes on their business model as well (witness the MS stores offering fairly carefully selected PC's which can be delivered free of bloat- and crapware).

And seeing some emerging fragmentation in the Android rollout, and their own loong experience in the headaches involved in supporting hundreds of thousands of configs and parts bins - much of it crufted with legacy issues - and which has slowed their OS development - maybe they're seeing the strategic advantage in controlling both the software and hardware on a much smaller number of SKU's - at least in their ongoing push into mobile.

After all, it's worked fairly well for Cupertino.... ...and they can see HP heading down the same road in their rear-view mirror.

Also, not insignificantly, they have a history of taking things they've done with partners and then turning on a dime and making them proprietary. Remember "Plays for Sure" being supplanted by the Zune store? So if an acquisition happens, it could be "buh-bye" to other Win 7 phone makers.

Just sayin'.....


RIM just announced that Android apps will be running on its tab, so whether you'd also heard this, you get a gold star!

Master move. First infiltrate Nokia, then turn it into an assembly factory.

J.

Good thing most of you only invest and don't have a hand in running the company you worship. If you've had any real world experience w/ WP7 or possess an iota of objectiveness/ foresight, you'd understand not only why Nokia and MSoft merged but why it will be a worldwide success in the face of Android's fragmented ubiquitousness and IOS's linear, all-for-one approach. Regardless, they will be the big three. Good luck RIM and HP

Intel entered into MeeGo knowing that all the previous Maemo devices, and a tonne of other Nokia phones ran ARM, they weren't going to get their chips on the phones, they were going to get leverage off Nokias sales.

Nokia is losing market share faster than IE! Its share of smartphones dropped from 47% to 38% just in the last year. And remember that Symbian had +80% share just a few years ago.


Microsoft always took the majority of profits from Dell and HPs Windows PCs. It still does.

And right, when have you scheduled iPod to become a profitless commodity device? It's now ten years old. Apparently, your world view doesn't fit the facts.


Non sensical rubbish. Nokia can't make high end phones that people want. Neither can MS, which couldn't launch a phone for kids tied to an expensive plan KIN, and couldn't launch an iPhone-class device WP7. That's not a matter of timing, it's a matter of not knowing what they're doing.


No, it's simply designed to serve as an ad platform rather than a good product.


Yeah that worked out so well for Palm! They didn't have to develop Palm OS anymore and got all this new businesses... oh wait- they still had to spend money to support Palm OS, had to spend more to support WiMo, and their sales remained static.

Yeah it worked out so well when Microsoft infiltrated Toshiba and turned it into a Zune factory. And the primary proponent of HD-DVD.

Or when Microsoft infiltrated Sharp and turned it into a KIN factory.

Or when Microsoft infiltrated Palm and turned it into a WiMo Treo factory.

Microsoft infiltrated LG and turned it into a WiMo 6.5/WP7 factory.

Apple partnered with Microsoft to siphon off its Exchange business and divert its good will to the iPhone, allowing it to compete against BlackBerry.

Apple also appears to have the only real MS Office app on a mobile platform.

Exactly. The whole basis for Nokia's decline, and the motivation for doing something radical, is that they failed utterly to field a competitive smart phone. They could have kept on selling cheap dumb and feature phones to the world forever, but there's not much money in that, and there will ever less as smart phones move down the food chain to become tomorrow's feature phones, and the day after tomorrow's dumb phones. Presently, the "just a phone" will seem as quaint and pointless as a dedicated email device.

So the ubiquity of their current handset lineup doesn't really have any bearing on the likely success of new WP7 phones, outside of name recognition and carrier alliances (which are nothing to sneeze at, but not the same things as being able to just pop a smart phone OS on all those cheap little candybars and clamshells).

But Nokia can't rely on their dumb and feature phone sales to prop them up as the world's largest handset maker for much longer, so this is a make or break moment. It they can't make this work, they're staring down the barrel of complete irrelevancy in the phone industry. I'm assuming the direness of the situation is what made such a radical move (particularly for such a prideful, autonomous organization as Nokia) even worth considering, much less actually implementing.

Man, if you're going to start out by belittling people who don't see this as a slam dunk as being deluded fanboys, you might want to tone down the blind faith.

First of all, the two companies aren't "merging", Nokia is merely going to become a licensee of WP7, with some reciprocal technology thrown in to sweeten the deal.

Secondly, WP7 hasn't done much in the market to date. Is that because of lackluster hardware, relatively few distribution channels, poor marketing, or does the OS not appeal to consumers (or at least not enough to sway them from the obvious choices)? Hard to say, but on the hardware front, at least, WP7 is running on the same kit as some pretty successful Android phones, so it doesn't seem likely that that's a huge problem.

So Nokia brings distribution channels, name recognition, and at least competitive hardware to the table. And maps, I guess. But against that you have two extremely set-in-their-ways companies who are famously stubborn about their products, one of which has the added bonus of being extremely nationalistic not to say xenophobic.

So if there is going to be any actual synergy, where elements of each company's strengths blend to make something greater than the parts, there's going to have to be an unprecedented level of cooperation. Given their relative status as going concerns, it looks like Nokia is going to have to do most of the compromising. Will they be able to manage that? Will there be mass defections of key players? Foot dragging by middle management that only shows up as mysteriously poor execution? Certainly likely enough to make any rosy talk of inevitable competitiveness pretty unpersuasive, and that's before we even get to the desirability of the product, which by no means is a given.

It seems to me that the only way this works for Nokia is for them to become the sole manufacturer of WP7 phones, becoming the Ericsson to Microsoft's Sony. Otherwise, they're just another WP7 phone vendor, with a piece of what appears to be (so far) a pretty small pie.

I guess the hope is that they'll use their name recognition and channel access to grow the platform sharply, and that their hardware expertise will make them first among equals. But that's a pretty long shot, and if they do manage to accomplish the former, they'll have manufacturers with a proven track record like HTC happy to move in and ride their coattails.

A MS-Nokia Mobile, however, is a different thing entirely, and would afford at least the opportunity to do very tight hardware/software coupling. Not as integrated as Apple, HP/Palm or RIM, but far more integrated than Android and its all comers model. Is it possible that MS has concluded that the OS licensing model that served them so well during the PC era isn't going to work for mobile?

Of course, you can always point to Android, but it's not a instructive example, since Google doesn't make their money selling software.

So, instead of bringing Meego to market within the year they will bring WP7 for Nokia devices as 2011-12 serve as 'transitional periods' i.e. we'll see these devices late next year. Sounds like garbage. At least Meego works on both phones and tablets - which is the next big thing.

Colour me a tad pessimistic. Although, definitely a better choice than Android.

Will HTC et al. even bother making WP7 phones following this announcement? I doubt it.

More like calling in the Hindenburg to escape a burning oil rig.

Maybe not now, but the best case scenario for Nokia (baring some kind of exclusivity deal) is that their phone mojo turns WP7 into a big seller. At which point of course HTC commences making WP7 phones, as does Samsung, Motorola, et al. Which is why I think an exclusive deal is the only way this actually works for Nokia. As it stands, even if they win, they lose.

I posted about a full merger or takeover, but your possibility could accomplish much the same thing with fewer "corporate culture" and other obstacles....