Nokia Windows Phone 7 deal. Taking a deep breath, counting to ten and rethinking it

When Eldar’s bombshell about Microsoft Nokia Windows Phone talks came online, at about 4AM here, I was about to go to sleep.Well, after reading his op-ed all the sleep was gone.

Still shaking my head and almost refusing to believe this was happening, I went on and shared it here on UV. In a rather emotional way :)

Now that I had some time to sleep on it and ponder what might be happening if these news about Nokia Microsoft alliance are true, I think it might not be as bad as it seemed at first glance.

So here are some random thoughts about this possible Microsoft/Nokia Windows Phone 7 deal, in no particular order.

  • It’s not a short term project. Even if Windows Phone OS is much easier to port to the phone hardware then Symbian or Android, it takes some time. A smartphone is not a PC , and you can’t just slap a ready made OS on a standard component hardware and expect it to run out of the box. It will be at least 6 months  after the deal is struck for the first Nokia Windows Phone 7 device to ship. And having spent 6 months of company time, a significant amount of money and resources getting new hardware to run the  new Windows Phone 7 platform, Nokia will not stop making WP7 devices soon. Unless they completely fail in the market. Which is unlikely – in it’s first iteration, Windows Phone 7  is a really good OS already, and by the time the first Nokia WP7  device ships, technically WP7 will be more or less on par with competing Android and iOS platforms. So we are looking at a full line of Nokia WP7 devices in the next few years.
  • Unless Nokia completely outsources the whole WP7 smartphone line to some ODM, and only provides minor tweaks, Nokia name and it’s distribution channels for the device. Which is a possibility – Nokia already tried exactly this approach with Microsoft Windows 7 on Booklet 3G. But that was testing a completely new, pretty hot market on the cheap with non-core product. The probability that Nokia will take the same approach for it’s core smartphone offering is pretty low for now. Though I must admit, just yesterday I considered the whole Nokia WP7 device idea simply ridiculous. So you never know what might happen
  • Nokia/WP7 device is not a strategic project for Nokia. It’s a tactical approach, solving Nokia’s immediate problems, most likely – the access to the U.S. market. With Windows Phone 7 devices and Microsoft backing, Nokia may finally get a foothold with the main U.S. carriers. And, with WP7 smartphones Nokia can start  rebuilding it’s brand in the lucrative high-end U.S. smartphone market, where it was completely obliterated these last few years. Then, building on the success of Nokia WP7 devices, Nokia can start pushing their main Meego and Symbian offerings, when/if they are finally able to make them competitive to high end Android and iOS devices.
  • Nokia OVI services. Not sure how feasible it is for OVI to be ported to WP7 before the launch of first Nokia device, but if the cooperation is successful and continues, I think Microsoft and Nokia can find synergies here. App store will most likely stay with Microsoft, but OVI mail is already outsourced to Yahoo and with the dire straights Yahoo is currently in, migrating OVI mail to Hotmail platform  may actually be a good idea. Bing Maps is currently the weakest part of Windows Phone 7, while OVI maps in many ways except local search is still superior to Google Maps. Allowing Nokia to take over maps&navigation will allow Microsoft concentrate on a much more strategic search&local stuff. Then there’s the whole possibility of porting Nokia’s QT to Windows Phone OS, which opens a bunch of new opportunities for them.
  • If Nokia Windows Phone 7 deal happens, Microsoft is a big winner here, gaining a new huge distribution channel for it’s new OS, that is not available to it’s main competitors – Android and iOS. I know that Microsoft is very strict and limiting on what it allows OEM’s to do with it’s WP7 OS. But getting the worlds #1 smartphone vendor on-board, might be enough of an enticement for Microsoft to relax it’s OEM requirements and allow Nokia’s WP7  devices to stand out from the crowd.
  • Nokia is definitely having big problems with developing it’s core Symbian/Meego/QT software platforms. Buggy software, huge delays, restructurings, layoffs, etc; are probably only the surface things that we are able to see. But I do not think that these problems are the main reason for the rumored deal. As I said before – I don’t expect first Nokia WP7 device to ship before late summer or fall. And it’s really hard to believe that Nokia will not have it’s first Meego device and significantly updated Symbian devices shipping by then.
  • Looks like Stephen Elop is really in charge at Nokia. When he took over as CEO, many observers wondered whether he will be able to accomplish much. With unique Finnish Culture, consensus based decision making, entrenched bureaucracies and power groups with direct ties to a largely Finnish board, Nokia is indeed very hard to turn around even for a person in CEO position. There  were some signs that the new CEO is already strongly in charge when Nokia announced it’s new streamlined “All QT”strategy. At that reorg one power group that was pushing the next generation Orbit UI Framework and hampering the progress of  QT was slapped down hard, and Orbit cancelled, most likely at the insistence of the new management.  Now, if Microsoft Nokia deal happens – we won’t have  to wonder anymore. It’s such a radical departure from previous Nokia path,  it will be obvious that at least for next year or two, Elop has strong support of the board and the power to remake the company as he deems necessary.

Well, now that I had time to think about it and process my first impressions and knee jerk reaction, I’m starting to actually like this  new Nokia/Microsoft development. Of course, the devil will be in the execution and they can always screw that up. It’s Nokia after all.

Still, things might be finally changing for the best under the new regime. I hope they really do

Author: Stasys Bielinis

While I like to play with the latest gadgets, I am even more interested in broad technology trends. With mobile now taking over the world - following the latest technology news, looking for insights, sharing and discussing them with passionate audience - it's hard to imagine a better place for me to be. You can find me on Twitter as @UVStaska'

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  • Anonymous

    Finally someone has come to his senses.. Thanks Staska.. And dont believe Eldar, he is total BS

  • http://www.staska.net Staska

    Well, I do believe Eldar in that the talks with Microsoft for Nokia WP7
    device are real and ongoing.

    But now that I had time to think about it, I think such deal has quite a
    few positive opportunities for Nokia

  • Observer

    Not a word makes sense.

  • Anonymous

    Eldar is smoking crack or…

    … this is a nightmare.

    Think it from revenue and control POV :

    1) Microsoft will never allow any revenue sharing
    2) MS will control the OS 100%
    = Nokia will be a commodity hardware manufacturer with very little differentation. It will die off in 5-10 years, along with WP series

    3) Nokia will try and hack WP7, greating incompatibilities, platform fragmentation and oddities
    4) Nokia will use WP as a gap-over until they can get MeeGo or whatever off the ground – something that they can control themselves
    = Customers will be short changed and dumped for short-term profit with rush-to-market phones

    In any case – it will not work.

    Two companies stumbling badly on the mobile market do not make one great joint-venture, but a disaster with all likelihood.

    I really hope Eldar is wrong and in all probability he is.

  • http://www.youtube.com/iamtrinyd Triny D

    This is a prelude to a merger, if Microsoft can’t stop iPhone and Android

  • Jimbo

    That’s what I suspect too; I wouldn’t doubt if the two companies reveal merger talks in 2011.

  • Guest

    First of all, Windows Phone 7 is a great OS. It is here to stay. Microsoft has proved again (XBox) and again (Bing) and again (Azure), that they are long distance runners. They may not always succeed in the first try, but they keep improving and eventually win.

    Nokia understands their core competencies are in hardware and scale, they need a counterpart in software. Microsoft owns the enterprise. They have the best messaging and communications software, the best office suite, the best collaboration tools, the best development tools. And all of that free of any patent issues and fragmented platforms.

    Nokia is just being realistic. They are in severe risk of going out of business because their software platform is irrelevant. They would be fools not to consider all their alternatives, WP7 being the primary.

  • Shyampd

    Would rather like Nokia to make a “niche” Android Device rather than WP7.

  • Spartacus979

    Ha !
    This is bullshit !
    This guy Eldar is an anti-Nokia spammer. There are personnal reasons for that. He has just chosen the wrong news that would be the most harmfull to Nokia, just when people are on vacation and won’t answer.
    Like anything he announced lately was wrong about new Nokias, including N8.

    I know for sure Nokia is in talk with Windows about supporting software. Nokia would like to have MS Office on Symbian and some crossplateform developpement exchange like for Qt.

    Furthermore Nokia is very underestimated for its real value and there is no way it’s going to be sold to MS or merge with it.
    I also think Symbian is much better than Windows Phone 7 for smartphones. WP7 is very limited when you use Symbian to its full potential. Alos have in mind Symbian ^3 is running great, fluently with full multitasking with a CPU one third the power of any WP7 and half or a quarter the memory size, and while WP7 has no multitasking support and lacks many standard features like copy/paste.
    Also most of the user base of Nokia smartphones is made of people that like to be in control of their phone, and WP7 (on the contrary of the previous OS from Microsoft up to WM6.5) is closed and controlled by Microsoft and linked only to their own Market Applications just like Apple does with the iPhone. Ovi let people free to buy and install applications at Nokia on Ovi or anywhere else.
    Nokia main Market applications is not especially on Ovi but on the entire web.
    I can’t understand how they would believe people who are the main user base in the world are going to stay at Nokia if they change that.