Nokia the OEM

I’ve been tracking all the Nokia news the past days and while it’s impossible to argue that change was required, it seems that Nokia has actually folded considerably more than we’d all expected.  In exchange for access to Microsoft Windows Phone, Nokia is essentially closing up shop outside of manufacturing and some bits of maps.  Near term Symbian will be supported, but that has a pretty clear path to death.

If you read the open letter, everything is spelled out in plain English. My thoughts in italics …

• Nokia will adopt Windows Phone as its primary smartphone strategy, innovating on top of the platform in areas such as imaging, where Nokia is a market leader. (symbian and meego are done)

• Nokia will help drive and define the future of Windows Phone. Nokia will contribute its expertise on hardware design, language support, and help bring Windows Phone to a larger range of price points, market segments and geographies. (Nokia gets a say for some features, probably driven by hardware opportunities)

• Nokia and Microsoft will closely collaborate on development, joint marketing initiatives and a shared development roadmap to align on the future evolution of mobile products. (Nokia earns the right to co-marketing and will probably have some devices featured as core Windows Phone products in direct MS marketing)

• Bing will power Nokia’s search services across Nokia devices and services, giving customers access to Bing’s next generation search capabilities. Microsoft adCenter will provide search advertising services on Nokia’s line of devices and services. (Bing and you’re done, just like Nokia’s ad business)

• Nokia Maps will be a core part of Microsoft’s mapping services. For example, Maps would be integrated with Microsoft’s Bing search engine and adCenter advertising platform to form a unique local search and advertising experience. (Fortunately for MS, Nokia paid Billions for Navteq and we’ll put that to good use in our core products)

• Nokia’s extensive operator billing agreements will make it easier for consumers to purchase Nokia Windows Phone services in countries where credit-card use is low. (Nokia will help MS get operator billing in place for Windows Phone which will potentially help global reach for MS.  Probably does nothing for the US Smartphone market opp)

• Microsoft development tools will be used to create applications to run on Nokia Windows Phones, allowing developers to easily leverage the ecosystem’s global reach. (QT is dead.  An excellent acquisition for Nokia)

• Microsoft will continue to invest in the development of Windows Phone and cloud services so customers can do more with their phone, across their work and personal lives. (More MS for Nokia owners running Windows Phone)

• Nokia’s content and application store will be integrated with Microsoft Marketplace for a more compelling consumer experience. (Ovi is dead)

The best post that sums this up described the transition as a coup and frankly that’s not too far off. Microsoft has a new leader in place at Nokia who owns a massive amount of stock and naturally wants things to work out … for Microsoft.    Microsoft gets a new hero manufacturer to abuse.  If Nokia enables Windows Phone sales he wins – on both sides of the equation. Nokia as a company and brand has some major issues to resolve.

The real issues facing Nokia are remain the same. They still need to attract developers and require some major assistance still in the US, the largest smartphone market. Microsoft has barely made a dent and it seems their sales are in the channel rather than end user. Windows Phone is a fresh start in a race that’s been active for years. Android while more competitive for Nokia as an OEM would have been an easy option for developers to work with given the stratospheric growth and sales of Android products over the past two years.   Windows Phone is certainly nice, but that’s all it is.  There are no standout applications yet even though the growth has been reasonable.  Time will tell, but I’m not feeling this at all.

5 thoughts on “Nokia the OEM”

  1. Nokia is certainly going to pickup on smartphones as the real battle
    lies there. iPhone, Htc and Samsung are seriously giving tough
    competition to Nokia and on other hand Microsoft is eager to jump into
    the smartphone war and they could not get any better with brands like
    Nokia, this merger is certainly going to produce some good results.
    Nokia is still going to keep producing low budget phones in Pakistan and
    other less developed countries.

  2. Nokia is certainly going to pickup on smartphones as the real battle
    lies there. iPhone, Htc and Samsung are seriously giving tough
    competition to Nokia and on other hand Microsoft is eager to jump into
    the smartphone war and they could not get any better with brands like
    Nokia, this merger is certainly going to produce some good results.
    Nokia is still going to keep producing low budget phones in Pakistan and
    other less developed countries.

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