Commentary - With all the negative buzz floating around about Microsoft & Nokia, it’s hard to figure out what the benefits might be, not just to the companies themselves, but the consumer and enterprise markets, as well as the mobile industry in general. Looking down the road here’s how things could shape up if everything works out for the Nokia and Microsoft partnership.
More for consumers
Nokia excels in making affordable smart phones and this allowed the company to maintain high sales volume in the midst of iOS, Blackberry and Android overtaking their high-end devices. Their supply chain is on-par with any other company in the world and better than many other phone manufactures. What the company has lacked is a compelling OS and popular developer ecosystem.
At the same time, Microsoft is a great consumer brand with the name recognition to convince feature phone users to make the leap to a data driven smart phone. Consumers are familiar with computers running Windows and most reviews have been positive about Windows Phone as competitor to the other mobile operating systems. Bringing the familiarity with existing Microsoft consumer products together with a strong mobile platform will drive feature phone users to a new platform they already know.
Assuming Nokia & Microsoft stay competitive with their pricing, this new ecosystem provides consumers as much value as Apple and the same type of differentiation as Android devices, and could provide the solution for people still leery about jumping on the smart phone wagon, in a variety of niches.
Microsoft has a huge opportunity to jump ahead of Apple's MobileMe offering by successfully leveraging productivity tools such as their office suite. This would give consumers better functionality without having to pay for the Apple premium or buy into the Apple way of computing. Furthermore, Nokia can use their partnership as a differentiator and MS gains the benefits a having Nokia as a true dyed-in-the-wool OEM partner. Rather than existing OEMs who want to modify the Windows Phone 7 experience to stand out with their device (as they do with Android today) consumers get a device that’s designed for the OS from top-to-bottom.
What’s in store for the enterprise?
Nokia has a strong tradition of enterprise-ready mobile technology, through the sales of their e-series line of devices. The company also has partnerships with companies like Cisco that give them a great technology foundation to build deeper integration into enterprise systems. Now the phones will be able to leverage capabilities through Microsoft-branded technologies such as Business Productivity Online Services (BPOS) & software such as office communicator. Enterprises win on both ends because MS & Nokia can spend less time on the things they aren't good at, and more time on the things they excel at.
Furthermore, Microsoft continues to have an extensive .Net community, and with the added market share they’ll get by being on every smart Nokia device sold, the opportunity hasn’t ever been greater for developers to start building/porting apps to the Windows Phone 7 platform. As this partnership continues to play out, perhaps we might see Nokia building enterprise-centric features into Kinects, and Microsoft building functions and features leveraging Nokia’s vast patent library and experience into Office products that we’ve only heard talked about.
The mobile market Wins
Lets not forget that this partnership also creates a third viable ecosystem where developers can expand their product and gain additional revenue beyond Android & iOS. Though Nokia may shrink from the merger, Windows Phone 7 will grow tremendously as a result of this partnership, giving .Net developers a reason to build more apps that leverage Microsoft productivity and consumer products.
Consumers benefit from better phones built by two strong consumer companies that have strong manufacturing and distribution channels. As lower price points for smart phones are introduced, more feature phone holdouts will make the hop and embrace smart phones for the first time. As more consumers enter the market mobile operators will offer more pricing options and this growth could help bring down total costs for consumers. Furthermore, it helps bring more of the things that make mobility great in the US as Nokia’s mobile hardware gains a viable market presence in the US.
There’s no way to know if everything outlined here will play out successfully, but it takes two struggling players in the mobile industry and makes them more competitive, as well as gives consumers another strong platform which in turn makes the market stronger overall.
Crazier things have happened, and with so much of the world yet to get smart phone connectivity, the future really belongs to them, and who better than two companies that have both done so much to introduce new technology to the world?
Daniel Maycock is a consultant at Seattle-based Slalom Consulting, working on their national research and development team. He specializes in evaluating new technologies, as well as providing strategy & guidance to Fortune 500 companies.