Between the Lines

Larry Dignan, Andrew Nusca and Rachel King

Nokia chief outlines Windows Phone strategy; warns of Android 'uncertainty'

By | September 9, 2011, 11:00am PDT

Summary: Nokia’s Stephen Elop discussed at an event in China the possible difficulties for Android that the Motorola-Google deal may bring, while defending Microsoft’s Windows Phone 7.

Nokia chief Stephen Elop, in a speech in China, outlined the release strategy for the upcoming Windows Phone-powered Nokia smartphones.

Elop, who shortly after he was appointed soon after leaving Microsoft, steered the Nokia smartphone ship from Symbian to Microsoft’s next-generation mobile operating system, discussed the rumours that Microsoft would eventually acquire Nokia.

It would not come as a shock to many, since Google acquired the handset-making arm of Motorola, but appears to have been ruled out — for now.

But Elop said that Nokia would make its own way “independently”, as the phone giant is set to release its first Windows Phone 7-powered phone before the end of year.

Microsoft’s relationship with Nokia is unique, in that the software and operating system giant gave Nokia complete access to Windows Phone 7 source code; something that other Microsoft partners, such as HTC and Samsung, which have not been given the keys.

Nokia is also sharing a great deal with Microsoft for the Windows Phone project to go ahead, including key services and “innovations” to help differentiate Windows Phone running Nokia devices from the other Windows Phone devices on the market.

But as Elop was keen to point out the advantages of Windows Phone over Android, he warned that the Motorola-Google deal, announced last month, could cause difficulties in the forward strategy of the Android ecosystem.

He said that for other manufacturers, such as HTC and Samsung, there will be considerations to take into account as to how the Motorola-Google deal will affect Android allegiances.

Also, Nokia’s overall ethos is changing, with a reported higher sense of urgency and “more aggressive decision making” to enable better innovation.

“It creates a great deal of uncertainty for the Android ecosystem. I’m sure it is of great concern for many of the Android participants”, he said in the speech.

The problem of the dilution of phones was also highlighted — with seemingly every phone for every available segment of all markets it pitches toward — the balance needs to set to enable phones for all kinds of customer, without flooding the market with forgettable phones.

Bets are on that Nokia Maps will be ported to Nokia Windows Phone devices, perhaps with some ‘Bing-ification’ to go with it. It just wouldn’t be right if Microsoft would not insist on throwing Bing in with something; whether it fits or not.

And, as seen with other Windows Phone devices, such as those from HTC, Nokia is also moving towards a “form factor” model with “distinct designs”.

Though there was no mention of a tablet, the phone giant is “aware of the need” and opportunity to meet consumer demands. With Microsoft’s cosy relationship with Nokia, I would not put it past either of them to consider a Windows 8 ’slate’ device — if a tablet were to come to fruition next year.

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Zack Whittaker, a criminologist who studied at the University of Kent, Canterbury, is a journalist, writer and broadcaster.

Disclosure

Zack Whittaker

I worked briefly with Microsoft UK in 2006 but no longer have any connection with the company. Regardless, I remain impartial and unbiased in my views.

I don't hold any stock or shares, investments or industrial secrets in any company, but have signed confidentiality agreements with a number of UK and U.S. organisations, whose names I am not at liberty to disclose.

I was involved with Kent Union, the University of Kent's student union, undertaking voluntary, non-salaried, elected positions between early 2009 and mid-2010.

No other company, body, government department, non-governmental organisation or third sector organisation employs me or pays me a salary in any capacity whatsoever.

As a freelance journalist, whenever expenses are given and taken by a company that is not CBS Interactive, these will be disclosed in each relevant post to ensure transparency.

I currently work with a UK law enforcement unit, but this is an entirely separate position which bears no connection to other work.

(Updated: 23rd October 2011)

Biography

Zack Whittaker

Zack Whittaker, criminologist who studied at the University of Kent, UK, is a journalist, writer and broadcaster.

After studying criminology at university, though still in his early-20's, he has already had a series unconventional work and voluntary positions. He has worked with researchers studying neurological illnesses like Tourette's syndrome (which he suffers from), has given lectures on the nature of disabilities in the public community, and occasionally ends up speaking on television and radio discussing the events of the day.

He first had academic work published at the age of 22, then still an undergraduate, and has been cited by a wide range of publications: from CNN, the Huffington Post, AllThingsDigital, The Atlantic Wire and CBS News.

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RE: Nokia chief outlines Windows Phone strategy; warns of Android 'uncertainty'
bobhyde 20th Sep
@LoverockDavidson_

A good CEO can spot when his own company is in danger . . .

The more Elop goes on pushing WP7 the more it seems like his in trouble.

If WP7 was so good why didn't it sell before?

Why does MS need to spend millions training sellers how to use it?

Why does Elop plan to lower the price point and try and flood the market?

Nokia choice of WP7 was right for MS.
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Choice
facebook@... 9th Sep
Brought to you by Microsoft
@facebook@...
Microsoft rocks!
@LoverockDavidsonn
Umm. Let's see.... This guy WAS a microsoft employee, right? (x) check.
NOW works for NOKIA, right (x) check. So we EXPECT genuine openness about him, in favor of WHOM?? Android??
@facebook@...
Apparently paying off hardware manufacturers so they only use your software rather than use WP7 and android = choice.
@anono I believe you missed the point. According to many on here, the more Windows Phone only OEMs the better. THey could care less about your choice, as long as they get their choice.
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RE: Nokia chief outlines Windows Phone strategy; warns of Android 'uncertainty'
LoverockDavidson_-24231404894599612871915491754222 9th Sep
A good CEO can spot when its competition is in danger and take advantage of the situation. That is what we have here. Elop sees android is in trouble with both the legal aspect and with Google isolating themselves to just Motorola. There is no second guessing as to why WP7 was the right choice for Nokia. Prepare for more stories about android getting dumped and WP7 getting picked up.
@LoverockDavidson_ And the FUD machine keeps on churning...
@chipbeef
True that. But this FUD may be more justified than some others.

Google will work out the Android kinks eventually. But over the near term, there is undoubtedly reason to be fearful, uncertain, and doubtful about how much money there is to be made there.
@chipbeef LD is correct. I predicted from the get-go that someday there would be a life-size, solid gold statue of Stephen Elop in Nokia HQ, and my prediction is looking to be right on track.
@jgm@

If there will be one it will not be pure gold. It will be not revered. It wll be for shaming Nokia for bringing it from a Telephone giant to MS stooge status.
@jgm@...
We can all pretend to know the future about whether Elop's strategy will succeed or not. Given Nokia's share price though, investors have spoken.
@LoverockDavidson_

Do you have a new handle with the underline character?
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RE: Nokia chief outlines Windows Phone strategy; warns of Android 'uncertainty'
LoverockDavidson_-24231404894599612871915491754222 9th Sep
@DonRupertBitByte
Yep.
@DonRupertBitByte
What???
@LoverockDavidson_

LOL! That's ridiculously funny. Ahem...Google just gave HTC a bunch of patents to counter-sue Apple.

That reaction by Elop, curiously a repeated attempt at FUD from the day they announced the Microsoft-Nokia partnership, is probably all bravado. Nothing could make Nokia more afraid, than Google giving out patents in which to force Microsoft, Nokia, Apple and others to cross-patent.

Suddenly, Nokia's perceived advantage is just a footnote...HTC, Samsung and others who are developing for Android and WP7 are at a strong advantage over Nokia. With the newest US JD Power and Associates smartphone satisfaction rankings showing Nokia dead last, who do you think should be running scared?

I think Elop is running scared as hell right now.
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@gork platter is that there is nothing compelling to hold users to the Android platform.

My guess is that Google will end up settling with Oracle and license any relevant technology. Android will then just continue on. There is no uncertainty.
@LoverockDavidson_

A good CEO can spot when his own company is in danger . . .

The more Elop goes on pushing WP7 the more it seems like his in trouble.

If WP7 was so good why didn't it sell before?

Why does MS need to spend millions training sellers how to use it?

Why does Elop plan to lower the price point and try and flood the market?

Nokia choice of WP7 was right for MS.
It's much easier to talk about uncertainty of your competitor than it is to talk about certainty of your company/product. The latter he can't do.

@Return_of_the_jedi

"Android Nears 50% Market Share," and still no one is reaping all that much in the way of profits from it. Enough to be a major force, sure, but not, maybe, enough to support another giant like Nokia entering the game.

Nokia is set to be the preeminent supplier of a product backed by the preeminent software company in the world. They could well go down in a fireball -- but that was going to happen anyway.

Motorola "bet the company" on Android and did okay for a stint. Nokia is making a similar bet. I don't have a crystal ball and I don't know that they are likely to succeed. But the opportunity is there if the stars align. If this bet just so much as stops the bleeding, I think it will be considered a great move by the punditocracy.

If you are a betting man, now might be the time to buy Nokia.
@jdakula

I think fear comes from the smaller profits. It's easier to fight legal battles if you're raking in the money, if that profit margin isn't there and you start paying licensing fees, and Google services fees, that adds up. Not leaving a whole lot of meat on the bones. In comparison it seems WP7 is cheap compared to the free Android.
@jdakula

And that's why US JD Power and Associates' latest smartphone satisfaction survey shows Nokia dead last.
@jdakula
So you are saying Nokia came to WP7 to be different than the other manufacturers and that they can have their own niche. That makes sense.

The question is why is Nokia now trying to woe other handset manufacturers to use WP7? If they succeed, doesn't that mean they is now more competition, thus thinner margins, amongst WP7 manufacturers. Elop's relation with MS needs to be investigated. I'm particularly interested in knowing if he sold off his MS stocks yet. I know he didn't when he announced the partnership, which raised MS shares and sent Nokia shares crashing.
@jdakula
you do understand where Google is making money on Android right? I can tell you it is not from selling it because it is free. Give you a hint - it started out as their primary business.
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Seems a little...
cabdriverjim 9th Sep
Premature to call the death of Android. But the Nokia dude is doing what he should. Proclaim the death of Android for it makes him look like a genius for betting his entire company on a proprietary single vendor OS with almost no users, almost no developers and practically non-existent hardware. I know, I know, Windows Phone is getting more and more software and users and vendors every day. There's no doubt that plenty of people will buy into it. But betting the entire company on a single vendor seems unwise. Even Samsung, HTC, and other major phone makers have diversified their OS support. It makes sense to hedge their bets across the board. It's bound to be a win-win for those who do diversify their systems. Some users want Android, period. Some users want WP7, period. Some users want iOS, period. There are 6 _billion_ handsets in the wild and more of them every day are being traded for smart phones. Plenty of room for everyone to be wildly successful.
@cabdriverjim It wasn't unwise at all. If Nokia went with Android they'd be just another Android vendor. They'd need Goggle, but Goggle wouldn't need them. Microsoft afforded Nokia to be in a much better bargaining position and to be allowed to both customize the OS and steer future development of the platform. What Mr. Elop did was the only realistic option for Nokia.
@jgm@... Given the situation Nokia is in I'm sure you're right. Nokia bankrupted themselves to the point they couldn't properly diversify the business going forward. They chugged along believing that people would continue to buy Nokia's own in-house software until they looked around and their market share had turned to quicksand. Good hardware means diddly if the software is a disaster.

The difference between being "just another Android vendor" vs "just another WP7 vendor" is entirely academic. Nokia is no less "just another WP7 vendor" than they would have been with Android. They would have had input on the design of Android just as well. There are other reasons Nokia went solely with WP7. For example, Nokia Ovi is a strategic asset for them and it competes directly with Google. Microsoft needed a Google Maps killer and Nokia has the closest thing to it. So Nokia got special treatment....for now. The very instant Ovi is irreversibly wound around everything in WP7 you'll see that special treatment vaporize. Nokia will lose out on the phone side but they'll have to keep playing along because Ovi will become their only real source of revenue.

Most phone OEMs are building devices running Android, WP7 and in some cases other operating systems. Had Nokia acted sooner they could have branched development in several directions like other OEMs. Samsung, for example, has their own internal Linux-based phone OS in addition to the ones that actually make them money.

Microsoft giving Nokia access to the source code is irrelevant. All Android and nearly every other phone OS provides access to the source code. Restricting access to the source in the first place is ridiculous and paranoid and encumbers hardware development efforts.
@jgm@...

Get a life. Calling Google Goggle does not make your point any wiser. If that is the case M$Soft; WinBlows etc. Elop has brought Nokia from a large company to a MS stooge.
@cabdriverjim
Premature to call the death of Android.
Death of Android? Did I miss something in the article I've read it twice and still looking for that statement. Android started out, we have no favorites. Now that all the kids in the playground look to see that there is a privileged one , there will be fallout. Does this mean the death of Android, no. Android biggest enemy could be itself.
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I'm not certain ...
Return_of_the_jedi Updated - 9th Sep
... they'll get a second chance to make a first impression. Yes really.
Allmost all the Andorid OEMs will eventually sign patent deals with MS. Motoralla will be forced to do so and Oracle will make google pay dearly for stealing java.

The fact is that MS will be making some smart money from android and WP7.

Google has payed 12B for some useless motorola patents and will be paying few billions to settle with Oracle. There are more that 30 lawsuits against android. So google is lierally screwed in the near term. Crome books are already dead and android tablets will be swept aside by windows 8.
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@owlnet

Everyone else is going after the handset makers. They don't make the money or have the resources Google does. When you count the MS license and the Google services payment it adds up to more than WP7. Without the threat of legal actions as Microsoft is covering the OS IP and not putting that responsibility on the OEMs. Google could be the knife in HTC's back, which sucks as I'm a big fan of HTC.
@owlnet
You could have saved yourself many words in expressing what you've expressed and everything else you wish to express by just saying.

"MS will dominate everything; all other companies will fail in everything."
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Hopefully not
LiquidLearner 10th Sep
@anono

I absolutely love WP7, best smartphone I've ever had. Far better than my Droid 2. I've had it a month and a half and I haven't even rebooted the phone. I never went more than a few days without a reboot on my Android.

That said, I really see the potential of Android and think it's biggest flaw was the reason so many were interested in it to begin with. And that is the open platform. Google would do so much better, I think anyway, if they were to close the platform and have some control over what happens. That said Android, iOS and WP will be around for quite a while. Right now WP7 is my favorite, perhaps in two years Android will be what I think it should be. The only problem is the idea of Windows 8 on a phone sounds amazing.
"Microsoft?s relationship with Nokia is unique," in that Nokia gets lots of money from Microsoft.
Have no problems with WP7 competing against the others, but not with dumping that we have to pay later or now for other products.
Have no problems with WP7 competing if the same is true on the markets where MS has a monopoly. If MS stops with dirty tricks to protect monopoly's, if there is a correction for illegally conquered monopoly's.
Android uncertainty? Is this guys doing drugs?
No, but he hopes we are. Only someone totally drugged out could fail to notice that Microsoft's Motorola is calling the other guy's Motorola "uncertain." OK, so Microsoft hasn't actually purchased Nokia. Doesn't matter... all the same "insider dealing" issues are there.
Cannot really blame the current Nokia CEO for the problems at least he has tried to do something about it. But the leadership for the previous 5 years was a total joke they just watched the company sink and did nothing about it.
I personally find it funny that Microsoft is saying that the OEMs are going to get the shaft from Google, while they are making an in-house phone? I also find it funny that Microsoft is granting patents to a Canadian company, to sue other phone makers by proxy. IF I were one of the OEMs, I?d seriously consider getting off the Windows Phone ship, before Microsoft torpedoes it. Kind of like they torpedoed Plays for sure.
You mean like how Google is letting HTC sue Apple with its patents?
@Michael Alan Goff I do not see Google making statement like Microsoft is. You also have to remember how Microsoft backed Plays for sure, only to torpedo it, leaving the OEMs high and dry.
What does this have to do with that? This is a platform that they have thrown at least a billion dollars into, they're not going to just drop it.
@Michael Alan Goff I honestly think you?re missing the point. Microsoft has been known to screw its own partners, when it suits their needs. Plays for sure was one such situation where Microsoft tried a software only approach to harm Apple. When that did not work they stranded their partners. I feel the same will happen with Windows Phone partners.
It might.

I would say Google has been, for years, a worse partner. What did Google do for the past couple years while Microsoft has been suing the handset owners? When Apple got Samsung's products banned in certain areas?

Nothing.

Both companies suck as partners.
My message to Elop couldn't possibly be more simple and to the point:

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Elop's self serving comments are not helping Nokia in gaining market share. It's market share continues to slide while Android's rise continues despite the FUD machine. It's only a matter of time before Elop is sacked, but what a price Nokia & the Finnish people are paying for this man's intransigence.
Some people, especially Americans, need to be reminded that the global cell phone market does not revolve around North America. Nokia achieved global no. 1 maker of mobile phones without the US. Yes the US is a very important market. But looking at the work MS and Nokia are doing on WP7/WP7.5, I see Nokia finally establishing and growing its foothold in the North American market. Apple and Android can look forward to losing market share to WP devices.
@Sicebi What your are failing to see is that Nokia was losing marketshare, and Microsoft was loosing marketshare. Two burning platforms put together is not going to equal success. I honestly see Nokia continuing to slide lower until the company is nearly bankrupt, at that point Microsoft will absorb Nokia and then force the other OEMs out of the Windows Phone business.
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How do you know?
Robert Hahn 10th Sep
looking at the work MS and Nokia are doing on WP7/WP7.5Who is allowed to look at that except employees of Nokia and Microsoft? And if that's what you are, then we have no doubt that you "see Nokia finally establishing..." What else would you say?
@Sicebi
Windows Phone devices, maybe. Nokia Windows Phones, selling well in the U.S.? LMAO!!

Considering that the only brand presence Nokia phones have in the U.S. are what are known as 'burner phones' (the prepaid kind sold in bodegas, preferred by drug dealers, shown on shows like The Wire), I highly doubt that.
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Sorry, but Nokia is doomed.
Theseus 10th Sep
I'm not doubting Microsoft's Windows Phone; I've played with a couple of WP7 devices, and they were nice enough.

The doubt comes in when considering Nokia, now a largely irrelevant manufacturer of dumb phones, some laggy smart phones with Symbian and hoped for devices with WP.

To paraphrase Michael Dell, Nokia should just liquidate the company and return the money to the shareholders.

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