What will the Nokia deal mean for Microsoft's other phone-maker partners?

What will the Nokia deal mean for Microsoft's other phone-maker partners?

Summary: What does a multi-partner ecosystem look like when not all participants are deemed equal? We're about to find out in the Windows Phone world.

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What does a multi-partner ecosystem look like when not all participants are deemed equal?

Giving Windows Phone a huge shot in the arm, the number one worldwide mobile phone vendor Nokia announced a sweeping partnership with Microsoft on February 11. (Yes, I was wrong. I thought Nokia would go Android, a move Nokia CEO Stephen Elop acknowledged today that he considered. Gobble, gobble.)

Nokia didn't become just another Microsoft handset partner via today's agreement, like HTC, LG, Samsung and Dell. According to the announcement, Nokia would is going to have direct input on the future of Windows Phone, influencing key areas like maps, imaging and the marketplace. From today's Microsoft/Nokia announcement:

"Nokia will help drive and define the future of Windows Phone. Nokia will contribute its expertise on hardware design, language support, and help bring Windows Phone to a larger range of price points, market segments and geographies."

Microsoft reportedly is paying Nokia hundreds of millions of dollars to secure the deal. In exchange, Nokia has agreed to make Windows Phone its principal smartphone operating system. Nokia, in turn, becomes a key backer of Bing, adCenter, Office Mobile, Visual Studio, Silverlight and XNA.

So if you're HTC or Samsung, do you keep your eggs in the Windows Phone basket or put more in the Android one? (The smartphone market is now, for the most part, a three-horse race, with partner-free Apple being the third horse.) And what will this mean for Windows Phone customers, in terms of device choice?

The issue is already on people's minds. Here's a tweet from CNET's Stephen Shankland, covering the Nokia-Microsoft press conference this morning:

Microsoft has made much of its decision with Windows Phone 7 to "lock down" the base platform, providing OEMs with less opportunity to customize. That has been seen by most company watchers, developers and customers as a plus and a way for Microsoft to avoid the problems that plagued Windows Mobile (and Android) -- specifically too many designs with too little in common. But Microsoft is changing the rules for Nokia and allowing Nokia to customize the WP7 platform. Does that mean Microsoft is going to grant other OEMs the same concessions? (And if not, will that lead them to walk?)

Next week's Mobile World Congress should be an interesting one. Wish I could be a fly on the wall in Microsoft's meetings with its partners....

Topics: Microsoft, Mobility, Nokia, Operating Systems, Software, Telcos, Windows

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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34 comments
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  • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

    Dance of the desperates. 2 vendors spurned by the market join together to try to reclaim some of the dominance they both found so comfortable, but gave away by looking more in the mirror than at the customer. Nokia just did it again.
    rebeccaYee
    • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

      @rebeccaYee

      Not exactly. The telecoms firms are a key part of the business model, and in a sense are the primary customers, since they decide what to sell to end users. At least in Europe, the telecoms firms wanted Nokia to go with Windows Phone 7, not Android (or Symbian, or MeeGo).

      I might add that the only news I've heard about Windows Phone 7 sales in Europe is the comments from Deutsche Telekom (the biggest telecoms firms in Europe) that they've been ahead of expectations.

      If sales have been relatively low in the US (which it sounds like they may have been), all of the bizarre standards used by the various US telecoms firms may have something to do with it. I understand that the biggest telecoms firm in the US aren't even selling WP7 phones yet, because they don't use the normal GSM standard, so can't sell normal phones and have to wait for custom models?
      WilErz
      • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

        @WilErz Correct! The USA is NOT a major player in global telecoms. It totally missed GSM and as a result is still about a decade behind Asia and a few years behind Europe. The coming of 4G/LTE will wipe out the US telecoms sector since there will be no concept of 'premium' customers. Those with the largest number of subscribers will win. Simple. So say hello to Vodafone and China Mobile - the future of the USA.
        Major Plonquer
    • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

      @rebeccaYee

      rebeccaYee = DonnieBoy with a different name
      nomorebs
  • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

    It means their partners have increased competition. Not so much in the OS but in the hardware. You now have 4 hardware vendors who are able take advantage of WP7 capabilities. The main thing now will be which one of these vendors is going to produce the best hardware for WP7.
    Loverock Davidson
  • It simply means more competition

    If I were HTC, Samsung and other mobile hardware partners, I should not look at this in any envious way. The fact they have the choice of running either WP7 or Android should keep them quite. There was already competition between different hardware brands: HTC vs DELL vs Samsung. So adding Nokia to the mix is not gonna be the end of the world. Remember, its also to their advantage, since Nokia seems to be going exclusive with WP7, while DELL, Samsung, HTC still have the option of carrying their smart phones with either WP7 or Android. This is just a deal so far, so the problem for Nokia and Microsoft, the competition is still ahead.
    Mr. Dee
  • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

    The pitiful effort the other handset makers were putting into WP7 could have been one of the driving forces to make Microsoft really go after this deal. Lack of compelling handsets has been one of the biggest complaints of WP7 so far. But WP7 will be more successful now and it will take more market share away from Apple where they can?t compete so it could be good for them too but only if they put in the effort to pick up their game some.
    Mythos7
    • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

      @Mythos7
      exactly...( the lack of compelling handsets ).
      What this tells me is that Nokia has a lot more to offer to WP7 than 'just another handset'. Nokia has their own set of 'experiences' that are Nokia specific that they will integrate with WP7. HTC and Samsung doesn't have their own "mapping" system, for example.
      iceman357
    • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

      @Mythos7 Lack of compelling handsets? I'm genuinely intrigued by that statement. I have a HD7 and I'm "delighted" with it. Just out of polite interest, what would constitute a compelling handset in your opinion?
      spc1972
      • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

        @spc1972 <br><br>The HD7 is decent but it needs a better screen (its size is nice), something far better than a 1230 mAh battery and a dual core processor would be nice also.

        You're delighted with your HD7 because it has WP7 on it but it could have been better.
        Mythos7
    • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

      @Mythos7..Totally agree. HTC, Samsung, and LG basically 'phoned in' their handset designs; they made no effort to be distinctive with regards to the look of their devices. With the exception of LG, they simply repackaged their current Android OS offerings. LG's handsets had no aesthetic appeal, which I think is the primary reason their handsets did not sell very well. Dell was the only OEM, in my opinion, that bought something 'fresh' to the mix and the Dell Venue Pro compliments WP7 quite nicely. With Nokia, and their unique phone designs (among other things), Microsoft has a winner.
      1019902735
      • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

        @1019902735 <br>manufacturers only can only match Android devices hardwarewise, as we see. At their best, they can match Android effort, because for them, where is Android, is where the beacon is.<br>For manufacturers Win7 is a second class citizen. In fact, Android through the last years, steadily almost anihilated WM marker share.<br>So enter Nokia. Through dubious tactics (see angry manifestations of Nokia employees), they bought back market share. So now we have MS/Nokia vs all the rest on Android.<br>This will only extend the life of WM as a viable platform furthermore; I would say that the market is frozen already, considering the development of other W7 models by most manufacturers. This considering how many new models has been delivered.<br>For Nokia it represent the <b>Kiss of Death</b>. Same happened to Silicon Graphics, once a leader & a respected high end workstation provider until turning to Windows.<br>Same happened to Palm, once a leader and a respected innovater, until they turned to Windows.
        theo_durcan
  • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

    I keep hearing about 'why go with WP7 because they will have trouble differentiating themselves from other phones'????
    Am I missing something?? The last time I looked "every" android phone 'looks' exactly the same .
    Different screen sizes and cpu/ram, but the 'experience' is the same.
    iceman357
  • The deal sounds great ...

    ... to me. My main concern is, does this introduce two tiers of partnerships in the Windows Phone ecosystem? Nokia will be able to change virtually anything it wants in WP7, while MS' other partners will be significantly limited. It should be interesting to see how things work out. My guess is that MS will use Nokie's partnership to learn how it should adapt WP7 to work on low end, to high end smartphones - then use that knowledge to craft its general WP7 strategy.
    P. Douglas
  • What does it mean for Bing Maps?

    MS has a large investment in maps, and is competing with Google directly in that space ... I find it hard to believe they'd cede that whole thing on the mobile front to Nokia's products. I know they already have a partnership on the NavTeq level, but still ...
    daboochmeister
  • Better for HTC and Samsung

    The Nokia deal makes it more likely that WP7 will be widespread and in demand, so this makes the choice easier for HTC and Samsung to continue offering models which support WP7 too. If they want to compete, perhaps they'll offer even more WP7-compatible models.
    JohnMorgan3
  • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

    Hardware competition will heat up as it has with Android Hardware. Good news for us.
    cromwellryan@...
  • If I were HTC or Samsung...

    I would kill Android all together, because Android is dead. not because today's event, I said that a few months ago. Android will die with or without Nokia making WP7.
    jk_10
    • RE: What will the Nokia deal mean for Microsoft's other phone-maker partners?

      @jk_10
      Yep. Android is dead. The best selling smartphone OS is dead.
      Droid101
      • android is dead regardless...

        @Droid101 but you still have about year to enjoy it. good luck with that!
        jk_10