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Nokia + MS: two failures do not make a success

Posted by Graeme in Business & Investment at 11:34 am on Friday, 11 February 2011

There are two things that strike me about the alliance agreed between Nokia and Microsoft:

  1. Combining Nokia’s failed smartphone strategy, with Microsoft’s failed smartphone operating system, is not a receipe for success.
  2. Nokia will now have three smartphone platforms, possibly falling back to two. This continued fragmentation is hardly a great way to get the critical mass then need.

Windows Phone will be Nokia’s primary smartphone platform, but Nokia will be launching more Meego devices, and it looks like Nokia will continue to invest in Meego:

Under the new strategy, MeeGo becomes an open-source, mobile operating system project. MeeGo will place increased emphasis on longer-term market exploration of next-generation devices, platforms and user experiences. Nokia still plans to ship a MeeGo-related product later this year.

Meego (Nokia’s Linux distribution) already is an open-source mobile operating system, so no change there. One of the worst of Nokia’s many missed opportunities over the years was to fail to make a Meego based tablet that people wanted to buy (a bigger N800) or to actually sell many Meego based phones (N900). Now that everyone is making tablets, the Market is a lot tougher.

What is the plan now? To make Windows Phone their main platform permanently? In that case why not drop Meego altogether? Is Meego just a fall back plan in case Windows Phone continues to fail even with Nokia’s backing — but in that case will Nokia have the resources to make Meego succeed? Is Nokia sneakily planning to use Windows Phone as a stop-gap until it can develop Meego further — but by the time it gets there Meego will be too far behind Android and Apple to catch up.

It is also interesting that the only major phone company to make Windows Phone their main platform is one that has a CEO who used to work for Microsoft. Is this more of a strategic decision or a personal one?

The new company structure does not make sense either. The more high end Smart Devices division will make Windows phone, Meego computers, and Symbian phones. Is that Nokia’s idea of tightly focused? The description of Meego devices as computers suggests that Meego will be aimed at the tablet market: not a bad idea, if it were not for the division of resources across three platforms.

The Mobile Phones division will concentrate on the cheaper phones, but it is very clear that many of these will be smart phones running one or more of the same platforms as the products of Smart Devices. How does this fit with:

Each unit will have profit-and-loss responsibility and end-to-end accountability for the full consumer experience, including product development, product management and product marketing.

Both divisions will have end-to-end accountability for everything from development to marketing of (Nokia’s version of) the same platform?

Nokia,s strategy seems to be “divide our forces, and keep dividing them”.

I do not buy the strength of the brand Nokia claims. Nokia is no longer the name it was: it is as much associated with cheap phones as smart-phones (I have a cheap Nokia. Its is great, tough hardware for next to nothing, but too cheap to be profitable).

The Windows brand is not strong either. Hardly anyone actually likes Windows. People use it because its what they use and work and they (mistakenly) think it would be difficult to learn to use MacOS or Linux at home, or because its what is easy to find in the shops, or because its what their IT people, or because there is some vital but of software their business needs that is only available for Windows. None of these are important factors for mobile phones. Do you really want a mobile phone that is as clunky as a Windows PC? I am not saying that Windows Phone will be as bad as the PC version, just that is the association the brand has.

Nokia should either have thrown itself behind either Symbian or Meego, possibly phasing out one, or it should have Android like everyone else (at least Android would not have left them at MS’s mercy — its open source).

As it is Nokia is now going to be a maker of good, but cheap and low margin phones, at the bottom end, and a box builder for MS at the high end. Good-bye to the Nokia we knew.

Comments (2)


Comment by john at 3:11 pm on 11 February 2011 at

I don’t get you all seem not very smart. You keep trying to compare Msft to a movil device cia. it is a corporate cia. most of its profits come from corp. but still the street buss keeps yaking about cell phones.

Comment by Graeme at 4:07 am on 12 February 2011 at

John, I suggest you read what I said, and make sure you understand it, before commenting. That is assuming I understand you correctly: your English and spelling are so bad that I cannot be sure what you mean (what is cia? or buss?).

Sorry, comments are closed