Look out Microsoft, here come the baby Nokias

Look out Microsoft, here come the baby Nokias

Summary: Jolla and Newkia represent efforts to take the talent Nokia had, grab a few defectors and create something innovative.

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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:

"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. 
nokiahalls
Will the talent roaming Nokia's halls form the next great smartphone play?

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.

Related: Has Nokia put craziness behind it?: Inside the company's post-Windows design revolution

Topics: Mobility, Microsoft, Nokia, Smartphones, The Microsoft-Nokia Deal

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61 comments
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  • Nokia is a great company

    Microsoft bought Nokia because it it a great company with smart employees and creative ideas. Merger a good HW and SW companies should be great for all. Go figure - there are always some sour grapes who want to spoil it for everyone.
    Sean Foley
    • Nokia is still a company in Finland, MS bought only the mobile phone unit

      Microsoft bought Nokia mobile phones unit because the Trojan CEO drove the share price down to the level agreed for said CEO to get his job back at MS and make it cheap for MS to buy a HW mfr for a last ditch effort to join the 21st (mobile) century.

      There, fixed that for you.
      MrBeck
    • mediocre mobile OS, no ecosystem

      Making this venture work is more complex than matching a great HW company with a mediocre mobile SW company, and both companies have had marketing challenges. Also, there is very little action in app development for Windows OS. MS is throwing a ton of money into this with the goal of being a distant third place finisher in the race.
      whooizit1
      • Yeah, Microsoft is doing what it's always done..

        Throw money at projects to keep them running. I don't ever recall them doing something game-changing or just something awesome, and the slow pace of updates to Windows Phone shows just how invested they are in making it work really well (sure, they're "helping manufacturers put on better hardware by prepping related updates first, but I don't recall anyone but Nokia actually making too many WP devices, so it's a stupid excuse IMO). But hey, let's see, maybe they'll actually do something great instead of just making fun of others (and do something about the cost of their devices as well).
        addicted2088
        • Oh, you mean like Apple iPhone?

          Which, aside from its initial introduction, has been the master of non-interoperability, lacked creativity, and managed to end up with about 17% of a market it invented? It's their own ecosystem top to bottom and they managed to become insignificant except in China. These new ventures are about 2 good decisions away from second place out of the box! Apples effort at entry level market share, iPhone 5c) is laughable compared to most of the android entries, but they are dumping money into the enterprise and so will Microsoft. I think while the two giants fight over the tiny percent of mobile users whos phone has to connect to corporate infrastructure, these upstarts have the chance to take second place in the much deeper end of the smartphone pool. Microsoft also alienated the biggest segment of PC users, (desktop) with W8.
          tjmajka
          • Um, what?!?

            Where to begin?
            1) interoperability? You mean like, say, Android? Or WinRT?
            2) Lack of creativity? You yourself, acknowledge the initial device. Claiming subsequent devices lacked creativity, whereas Android, which was blatantly stolen, were oases of innovation, is simply absurd.
            3) At 17%, they still make more profit (you know, the point of a business) than any other smart phone manufacturer.
            4) Insignificant? Um, newsflash: the Appstore makes more money for developers than all other mobile stores COMBINED. Developers are still more likely to develop an app of iOS than any other mobile platform.
            5) The 5C was NEVER about entry level market share. What ever gave you that idea?!?
            6) citations about Apple dumping money into the enterprise needed!
            7) Dream on.
            .DeusExMachina.
          • frothing at the mouth

            I'm going to use all this froth you created on my latte because I ran out of milk.
            warboat
      • Wrong. WP is the most secure and reliable mobile os

        And the WP appstore has grown at a much faster rate than either ios or Android. You can wish your fud was true, wish it hard with all your troll heart, but it's not, and all the wishing in the world won't make it so.
        Johnny Vegas
        • Right!

          You're absolutely right!
          OpinadorObjetivo
          • About what, exactly?

            .DeusExMachina.
        • Talk about wishing!?

          Keep wishing Microsoft had a mobile anything... WP what a joke, they bought Nokia to keep WP even remotely alive.
          GoPower
          • WP is great for work

            I bought a Nokia Windows phone 2 weeks ago. I find it very good for work related tasks and sincing with online accounts. Their app store may lack the free games on Android (Angry birds cost 99 cents a version), but no one interested in productivity cares about that. My phone is great for emails, maps, messaging, and docs... oh, and it makes phone calls. If I want gaming, Sony makes a great handheld device and my Xbox360 works well at home.
            KalanStar
        • Nonsense

          Secure because no one has it, and no one is trying (oh how turn around hurts) And while this is not quite true on the desktop, it is much more so in mobile.
          Who cares how fast the store has grown? First, it only matters where it gets to, NOT how fast it gets there, and second, much of that growth has come about due to incentive programs that detract from MS' bottom line. They can't keep it up forever.
          Wish on.
          .DeusExMachina.
          • Sort of like OS X and Linux.

            Secure because no one has it, and no one is trying to hack it.

            Oh how turn around hurts, agreed?

            LOL!
            William Farrel
          • Make up your mind.

            Android is a Linux distribution...
            jessepollard
          • Um, Linux is the single largest OS by user base

            Android, remember?
            And OSX marketshare continues to climb in the U.S., and is in double digits.
            .DeusExMachina.
        • Of course the WP appstore is growing faster.

          It is full of ports of iOS and Android apps, with hardy anything original. Since you're obviously not a developer, we can forgive you for not knowing porting an app only takes a fraction of the time required to create an app.
          anothercanuck
        • You sure ?

          A recent report found a whopping 69% of apps in the WP store were dead............
          DejaVu2
          • Selective posting, eh?

            Let's look at the full context of the report, shall we?

            "According to a research conducted by Stardust, as many as 65 percent of all apps in the Apple App Store are dead."

            "On the Play Store however, only 41 percent of the apps no longer draw breath."

            It would appear that some degree of "death" is endemic to all three major platforms, which makes sense when you consider that tons of amateur developers are churning out (cr)app after (cr)app that are nothing more than glorified ad-servers.

            http://techivian.com/254-65-apps-on-apple-app-store-are-dead-69-on-windows-phone-st/
            Nierteroth9
    • MS didn't buy Nokia

      It bought the handset division. Nokia is alive, well and independent.
      Alan Smithie