Breath in, breath out. There you go, you can do it! If you really think about it, you knew this was inevitable. Nokia has the hardware, but needs software. Microsoft has the software, but needs hardware. Both of these companies have been outperforming in the mobile market during the past years. So maybe, like krystof_k wrote on Twitter, nothing + nothing = something.
Nokia and Microsoft announced today that they would partner up in order to create a competing ecosystem to counter Apple and Google’s Android.
Nokia plans to form a strategic partnership with Microsoft to build a global mobile ecosystem based on highly complementary assets. The Nokia-Microsoft ecosystem targets to deliver differentiated and innovative products and have unrivalled scale, product breadth, geographical reach, and brand identity.
Like I said in part 1 “Microsoft was in a seriously bad situation with Windows Mobile. Microsoft’s mobile strategy had no credibility and no future. Until Windows Phone 7 that is.”
Windows Phone 7 is interesting in that it is a really good product made by one of the biggest companies in the world. Yet, it has had hard time getting hardware partners and developers interested. Samsung (Nokia’s biggest rival), HTC, LG and Dell have released devices running WP7, but not one of them has been that good. It feels more like all of them just felt obligated to release a WP7 product but aren’t really taking it that seriously. Which is understandable, Samsung and HTC have both chosen Google’s Android as their main strategy.
Today’s press release mentioned, “Nokia wouldn’t be just another Windows Phone OEM. Nokia plans to help drive and define the future of the platform.” Will this drive all the other WP7 manufactures even more towards Android remains to be seen.
On part 2 I wrote: “Nokia is an engineering company build and run by engineers. This has been a great recipe for success until Apple’s iPhone changed the industry. Nowadays, if you want to succeed, your main priority needs to be in software, which needs to be easy to use and attractive. Unfortunately for Nokia its operating systems are nether.”
Nokia’s strategy before today was Symbian and MeeGo. It is evident that when it comes to usability and the overall design of the OS, Symbian is lacking behind. Yet, Symbian has the biggest market share and is still bigger than Android. However, its market share in the USA is practically zero. Nokia has not been able to revive Symbian and now they find themselves in a position where they desperately need something else. This else was suppose to be MeeGo. A Linux based operating system that Nokia is developing together with Intel. Evidently MeeGo is not yet ready. Nokia was rumoured to introduce a device called Nokia N9 already last year. It was rumoured to run a Harmattan a “half” MeeGo, a sort of renamed Maemo 6 (a MeeGo predecessor). This project is now terminated. However, Nokia still plans to ship a MeeGo-related product later this year. Whether this is a smartphone or something else remains to be seen. Even though Nokia will be using WP7 as its primary smartphone platform, it will remain committed to Symbian and MeeGo as well. According to Nokia MeeGo will place increased emphasis on longer-term market exploration and the company still expects to sell approximately 150 million more Symbian devices in the years to come.
In that same article I also talked about search, browser and navigation. And that “By combining navigation services with its own search engine, Nokia could enter mobile advertising market with new and better tools.” Microsoft will from now on provide search (Bing) and browser (Internet Explorer). Nokia will provide navigation (Navteq). Together they will enter the unexplored field of mobile advertising to fight Apple and Google. Unless of course it’s already too late.
In part 3 I mentioned that: “Operators will advertise and push whatever device or platform that gives them the best profits, this is a fact! In order for this strategy to be effective, Nokia should increase (not decrease) their product portfolio. Offer a device for every segment and at every price point.”
With Symbian Nokia was not able to compete against iPhone and Android devices. WP7 will fix this at least in the short term and give operators a credible alternative. Thus, this new strategy should be pleasing to mobile operators, who according to Finnish Kauppalehti (financial newspaper) asked Nokia not to use Android or iOS, but rather to stick with MeeGo or Windows Phone 7. They clearly got their wish.
Nokia needed something radical, partnering with Microsoft clearly is just that. However, I cannot stop feeling that Microsoft got the better deal here. Their mobile strategy was going no-where, Nokia was building its future on Symbian and MeeGo. Then out of the blue comes this ex Microsoft executive who hands Microsoft a helping hand. Suddenly Microsoft is back in the game and stronger than ever. Maybe it is just me being cynical but I really believed that Symbian+MeeGo+Qt+Ovi was the best strategy for Nokia. Today, Nokia empowered Microsoft to become the biggest player in mobile devices market.
On February 2 I wrote on Twitter that “Forget everything I have ever said about Nokia’s future strategy.” Most of you panicked, even though you didn’t know whether it was good or bad. Well, now you know.
So, what do you think?
Nokia talks strategy – Part 1: Possibilities
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