Microsoft's acquisition of Nokia forms the basis for its smartphone and device strategy, but the rise of baby Nokias---new ventures formed by talent that won't work for Microsoft's Nokia---show how perilous a merger-induced foothold can be.
In Finland, it's quite possible that Nokia's decision to sell its devices and services business to Microsoft and keep the networking business and intellectual property licensing may remotely rhyme to the U.S. when Ma Bell was broken up. From Ma Bell came multiple companies---Ameritech, Bell Atlantic, BellSouth, PacTel, Southwestern Bell which begat SBC which begat AT&T, and Bell Labs---that went on to do great things.
Nokia isn't being broken up by government, but corporations do have so-called coaching trees---alumni who start their own enterprises that succeed.
A recent scan of the headlines highlights the potential of the baby Nokias:
- Jolla has been taking pre-orders for its Sailfish OS, which on Monday received Android hardware compatibility. Sailfish can run on Android devices, which may make it easier to sell Jolla's smartphone. ZDNet's Liam Tung noted:
"There's demand for us in Finland, particularly at this moment after the Nokia-Microsoft announcement. That's why we are doing it now in Finland — because we have had so many requests from consumers that say, 'Hey, now you have to do this'. So we are doing it," Jolla's CEO Tomi Pienimäki told ZDNet.
- And then there's Newkia, a Singapore-based company that aims to take Nokia talent and be an Asia success story. Speaking to ZDNet in an interview, Thomas Zilliacus, executive chairman and founder of Mobile FutureWorks, which is hatching Newkia, actually tried to buy out Nokia a year ago to steer it toward Android.
- ZDNet's Eileen Yu reported that Newkia has been fielding dozens of resumes from former Nokia employees and plans to bring a device to market within a year.
- Meanwhile, published reports indicate that Nokia had an Android-powered Lumia, a device I'd probably go for in a heartbeat. Rest assured, many Nokia employees probably would also have wanted to see Android Lumias. These people may wind up in one of these alumni companies. Jo Best noted that Android Lumias are a great idea if you had a time machine. Perhaps some Nokia defectors will form a company and find the next best thing.
The short version is that Microsoft may have trouble retaining talent in Finland. Sure, Microsoft's Nokia will have a lot of key players remain. It's also unclear how Nokia's alumni network of companies will get around patents and intellectual property, but the smartphone market can absorb a few more hardware players. After all, everyone wants more competition and hardware innovation. Needless to say Finland's government has to be rooting for a few of these smartphone startups to succeed so the country can hold onto its tech cred.