Even with Nokia devices, Microsoft wants to license Windows Phone to other makers

Even with Nokia devices, Microsoft wants to license Windows Phone to other makers

Summary: As it buys up the biggest maker of Windows Phone hardware, Microsoft still hopes partners will join the party.

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Even though owning Nokia's devices business will make Microsoft the largest hardware Windows Phone player, Microsoft hopes to continue licensing the platform to other partners.

Microsoft's $7.2bn proposed acquisition of Nokia's device business, once approved, will make Redmond the largest Windows Phone hardware maker. While HTC, Samsung and Huawei all license the platform, they sell relatively few units bearing the OS.

"Today's announcement doesn't change that – acquiring Nokia's devices group will help make the market for all Windows Phones, from Microsoft or our OEM partners," Microsoft's EVP of operating systems, Terry Myerson wrote in a blogpost.

As Myerson notes, Microsoft's partners "bring innovation, diversity and scale to Windows", but when it comes to Windows Phone, only Nokia has delivered all three.

The only non-Nokia Windows Phone devices that register in numbers by ad network Ad Duplex is HTC's 8X, which accounts for four percent of Windows Phone 8 devices worldwide, followed by Samsung's Ativ S, which accounts for two percent. The other seven are Lumia devices, led by Nokia's low-end Lumia 520.

The acquisition may raise questions questions of fair play that Google faced after acquiring Motorola, but Myerson addressed this by countering that Microsoft treats all Windows OEM partners equally to its own hardware business.

"We collaborate with our Microsoft hardware teams in the same way we partner with our external hardware partners: we discreetly discuss technical and business opportunities, make shared bets, empower each other to do great work, and then operate closely together," he wrote.

In mobility, to date, that has only meant treating its Surface business the same as other tablet companies, but the proposition of licensing Windows Phone could be more awkward given Nokia's total dominance of Windows Phone mirrors Samsung's of Android.

Global coverage: Nokia Interim CEO: Microsoft deal makes us stronger | Even with Nokia devices, Microsoft wants to license Windows Phone to other makers | Does its Nokia buy thwart or fuel a possible Microsoft break-up? | Microsoft shows how to flush decades of Nokia goodwill away | Microsoft gets less than $10 per Windows Phone unit | Microsoft-Nokia deal: Reaction from the Twitter trenches | Elop drops Nokia CEO role to lead devices team under Microsoft deal | Microsoft-Nokia deal: 11 quick facts | Microsoft to buy Nokia's devices, services unit for $7.2B

 

Topics: The Microsoft-Nokia Deal, Android, Microsoft, Nokia, Windows Phone

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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22 comments
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  • This was the predicted outcome the moment Elop was made CEO.

    Total disaster for Nokia. Total loss of their market dominance.

    And Nokia lost its crown jewels of their phone patents... in return for junk patents.
    jessepollard
    • Nokia was in trouble...

      I disagree.

      First, Nokia hasn't had market dominance in years. In fact, they have been in serious financial trouble, lately. This situation is somewhat similar to when Microsoft poured a ton of cash into Apple to save them long ago. It's about saving a major customer from oblivion and preserving a platform for the long term. The fact that they're stepping in to save the largest WP manufacturer from inevitable bankruptcy is a sign of their long term commitment to WP. This is probably the best thing that could have happened for both WP lovers and Nokia stockholders.

      The real question is how much of the Nokia development team is being kept intact. Microsoft shouldn't mess with the developers and designers at Nokia. They're innovative and should be left intact. The thing Nokia really needs help with most is stretching battery life. The phones are otherwise quite solid and should be left alone.

      I see this as a logical move for both Microsoft and Nokia. Considering the microscopic sales of the other WP manufacturers, even if they jumped ship, it would have little effect on the future of WP. This move will allow Microsoft to boost WP sales directly so that more developers will start writing apps for it. They need to build momentum and that will be easier if they have more control.
      BillDem
    • Please

      the feature phone era was dead. Done. Gonzo. That dominance was already on its way out... heck Blackberry, who were guilty merely of making a lower end smartphone (never mind a feature phone) saw their sun set. This was coming, and everyone knew it.

      Elop made some difficult decisions about some major expenditures (creating one's own phone OS.) Only the most well heeled of phone vendors can make their own OS... Apple, Samsung. Nokia wasn't going to be one of them, and Symbian just wasn't good enough to be that OS.

      This way, Nokia and its brand have a future. They probably didn't in any other notable way.
      Mac_PC_FenceSitter
  • There is a few differences between Nokia-Microsoft and Google-Motorola

    Fist historical facts - Microsoft "likes" to dominate by "killing" competition.
    Nokia has more than 80% Windows Phone share, Motorola android share is irrelevant. Even Samsung is very very far from having 80% android share.

    I don't see, many others building WP phones, maybe Samsung, HTC and others, keep doing it in order to fulfill past agreements, or negotiate better deals for IP payments to Microsoft.
    AleMartin
  • No one now will want to make a windows phone

    with nokia as preferred one the competition is unsustenable
    Burn_ing_Shadow
    • Why?

      ....which one of the makers jumped the Android ship when Google purchased Motorola?
      TheCat123
    • Preferred One?

      I suppose you know something we don't, right?
      Michael Alan Goff
    • Microsoft needs, and likely will have more than one manufacturer

      Lets look at the landscape from a past/present/future perspective on what Microsoft might consider for the future of their smartphone business and what they are likely to do in so far as pursuing different manufacturers for hardware to support WP8.

      How many major operating systems are currently in the largest part of the smartphone market?

      Essentially 4. iOS, Android, Windows and Blackberry.

      iOS being Apple of course. Apple is in the most unique position market wise than any company in the world in so far as their position goes. Not only are they the richest company in the world, certainly a unique position, but they have competition that is fairly formidable but they also have a customer base that's so loyal that they can promote their products in ways far different than most companies, appealing to the public in general terms of "We are Apple, we make dreams come true, we make magical products, buy ours and find out for yourself...".

      And people will purchase their products in very significant numbers based on that general approach. Apple is somewhat unique in this kind of product as they are an "all in one" type meaning they produce the OS and hardware package all themselves and don't offer up numerous alternative models. Generally speaking, you by the newest version of an iPhone BY APPLE or an older version of iPhone BY APPLE. Either way, there is so far only one new version of an iPhone available at one time and Apple created the OS and put it on hardware of their own design. A sort of one size fits all product that a large part of the public really likes and trusts immensely.

      A very unique position.

      Blackberry on the other hand, is somewhat like Apples approach accept they are on the verge of going broke now and are only able to rely on a former time of past glory of trust and broad usage, and they do offer two distinct models as opposed to one. Given Blackberrys tenuous grip on its own future and the newness of its current two models and the general landscape of the market, its difficult to say what we can learn about what MS may or may not do based on anything Blacckberry these days. I would suggest there is little of anything at all one can gleen from looking at Blackberrys approach because its impossible to say to what degree if any at all their approach will have in even keeping the Blackberry name in the market place for the long term.

      But when we look at Androids approach, its not at all an unusual approach in many ways, its simply appears to be that just about any hardware manufacturer that figures they can put together a smartphone that's salable may in fact end up with an Android OS on that hardware and then get it on the shelves to see how it does. And how has the Android phone sales done generally because of that approach??

      Pretty damn good. So good they have handily taken out the early front runner, the iPhone.

      This is the very same successful route Microsoft has used for the Windows OS in the past in desktop application.

      When your not Apple, there is a very good reason why this multi OEM system works well that's so easy to figure out. People like choice and low prices. When various OEM's compete for your dollars, you get differing hardware packages on many levels and in general prices are kept competitive at the various hardware levels. Only Apple can sell their products as life changing magical products so other OEM's have to rely on providing prices that have a meaningful relationship to the kind of hardware build they are offering.

      This is a marketing landscape that Microsoft has traversed before and has done well in before. Google has proved its not a landscape that only works for desktop and laptop sales but works quite well for smartphones and tablets as well.

      I would also add, that given where Microsoft is in the smartphone market today, and that is perilously close to the bottom, they need to be able to offer up as much different choice as possible because their product is still not nearly as well known as the iPhone or Android phones generally and what they need more than any single one thing at all is public usage exposure. They need word of mouth and they need WP8 and its distinctive interface to be seen and asked about and given praise by the public that does use it.

      To get that will probably require as much choice as possible for the public to choose WP8 over other choices when the opportunity arises.

      Microsoft very likely does need more than one OEM for WP8.
      Cayble
  • Microsoft should license the Windows Phone OS for one penny...

    This would better position the OS to compete with Android AND not give Microsoft/Nokia an unfair advantage over other OEM partners. Microsoft could then make its money from app sales... over time... as the platform grows.
    cybersaurusrex
    • Re: Microsoft could then make its money from app sales... over time... as

      Did you know Windows Phone already has more fart apps than Android? About 3× as many, in fact.
      ldo17
  • Why would any vendor want to tie themselves up with WP?

    Too many restrictions, too expensive licensing... and too small a market.
    jessepollard
    • Expensive licensing?

      At ten bucks a head, I'm thinking that's nowhere near the problem you seem to think it is. I'd expect HTC, for instance, to continue.
      Mac_PC_FenceSitter
    • If it's 10$

      Then that's about what most companies pay Microsoft for royalties when they use Android, maybe less according to some estimates.
      Michael Alan Goff
  • Microsoft Had 5% Of The Smartphone Market ...

    ... in 2010, just before Nokia announced it was adopting Windows Phone.

    Today, that share is 4%.
    ldo17
    • Shrug

      the pie's a whole lot bigger. 4% of twice as many phone sales isn't the worst thing that could happen. It isn't a great outcome, to be sure, but it isn't as bad as a percentage based figure alone would suggest.
      Mac_PC_FenceSitter
      • Re: the pie's a whole lot bigger

        And Nokia, on its own, had an additional 33% of that pie.

        Today, it is just part of that 4%.
        ldo17
    • Wrong. Windows Phone is on a consistent growth

      path. One that has it gaining market share faster than ios or android. This is the sequel to the netbook story. Remember when Linux owned 100% of the netbook market? Neither does anyone else but they did. Until Microsoft came in and completely ate their lunch with a seven year old version of their OS. How embarrassing for Linux. The good news for Microsoft+Nokia is that in smartphones they don't have to battle the irrational itards. Android has already done that and taken all the share away from Apple for them and replaced it with android. Now the market is chock full of users who replace their devices every couple of years and 99+% of android users would switch in a heartbeat.
      Johnny Vegas
    • in 2010

      A lot of their market share was Windows Mobile.
      Michael Alan Goff
      • Re: A lot of their market share was Windows Mobile.

        You say that like it's a bad thing...
        ldo17
        • Yes

          They abandoned Windows Mobile, ergo it was dead marketshare.

          It might as well have not existed.
          Michael Alan Goff