Microsoft and Nokia – better for everyone

Microsoft and Nokia – better for everyone

Summary: The Microsoft-Nokia partnership takes two struggling players in the mobile industry and makes them more competitive. Plus, it gives consumers another strong platform which in turn makes the market stronger overall.

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Commentary - With all the negative buzz floating around about Microsoft & Nokia, it’s hard to figure out what the benefits might be, not just to the companies themselves, but the consumer and enterprise markets, as well as the mobile industry in general. Looking down the road here’s how things could shape up if everything works out for the Nokia and Microsoft partnership.

More for consumers
Nokia excels in making affordable smart phones and this allowed the company to maintain high sales volume in the midst of iOS, Blackberry and Android overtaking their high-end devices. Their supply chain is on-par with any other company in the world and better than many other phone manufactures. What the company has lacked is a compelling OS and popular developer ecosystem.

At the same time, Microsoft is a great consumer brand with the name recognition to convince feature phone users to make the leap to a data driven smart phone. Consumers are familiar with computers running Windows and most reviews have been positive about Windows Phone as competitor to the other mobile operating systems. Bringing the familiarity with existing Microsoft consumer products together with a strong mobile platform will drive feature phone users to a new platform they already know.

Assuming Nokia & Microsoft stay competitive with their pricing, this new ecosystem provides consumers as much value as Apple and the same type of differentiation as Android devices, and could provide the solution for people still leery about jumping on the smart phone wagon, in a variety of niches.

Microsoft has a huge opportunity to jump ahead of Apple's MobileMe offering by successfully leveraging productivity tools such as their office suite. This would give consumers better functionality without having to pay for the Apple premium or buy into the Apple way of computing. Furthermore, Nokia can use their partnership as a differentiator and MS gains the benefits a having Nokia as a true dyed-in-the-wool OEM partner. Rather than existing OEMs who want to modify the Windows Phone 7 experience to stand out with their device (as they do with Android today) consumers get a device that’s designed for the OS from top-to-bottom.

What’s in store for the enterprise?
Nokia has a strong tradition of enterprise-ready mobile technology, through the sales of their e-series line of devices. The company also has partnerships with companies like Cisco that give them a great technology foundation to build deeper integration into enterprise systems. Now the phones will be able to leverage capabilities through Microsoft-branded technologies such as Business Productivity Online Services (BPOS) & software such as office communicator. Enterprises win on both ends because MS & Nokia can spend less time on the things they aren't good at, and more time on the things they excel at.

Furthermore, Microsoft continues to have an extensive .Net community, and with the added market share they’ll get by being on every smart Nokia device sold, the opportunity hasn’t ever been greater for developers to start building/porting apps to the Windows Phone 7 platform. As this partnership continues to play out, perhaps we might see Nokia building enterprise-centric features into Kinects, and Microsoft building functions and features leveraging Nokia’s vast patent library and experience into Office products that we’ve only heard talked about.

The mobile market Wins
Lets not forget that this partnership also creates a third viable ecosystem where developers can expand their product and gain additional revenue beyond Android & iOS. Though Nokia may shrink from the merger, Windows Phone 7 will grow tremendously as a result of this partnership, giving .Net developers a reason to build more apps that leverage Microsoft productivity and consumer products.

Consumers benefit from better phones built by two strong consumer companies that have strong manufacturing and distribution channels. As lower price points for smart phones are introduced, more feature phone holdouts will make the hop and embrace smart phones for the first time. As more consumers enter the market mobile operators will offer more pricing options and this growth could help bring down total costs for consumers. Furthermore, it helps bring more of the things that make mobility great in the US as Nokia’s mobile hardware gains a viable market presence in the US.

There’s no way to know if everything outlined here will play out successfully, but it takes two struggling players in the mobile industry and makes them more competitive, as well as gives consumers another strong platform which in turn makes the market stronger overall.

Crazier things have happened, and with so much of the world yet to get smart phone connectivity, the future really belongs to them, and who better than two companies that have both done so much to introduce new technology to the world?

biography
Daniel Maycock is a consultant at Seattle-based Slalom Consulting, working on their national research and development team. He specializes in evaluating new technologies, as well as providing strategy & guidance to Fortune 500 companies.

Topics: Mobility, Banking, Hardware, Microsoft, Nokia, Smartphones, Telcos

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27 comments
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  • MSN claims online record for Live Earth

    Only Microsoft has the power and technology to deliver this kind of performance. Imagine trying to do 10 million streams with any other company. It simply can't be done. When your #1 in research and technology you can take the credit like this.
    Loverock Davidson
    • RE: MSN claims online record for Live Earth

      @Loverock Davidson
      woah! check it out, I went back to the future. A year and a half ago I made the post above, then I knew it would show up today! :) ok not really but its still pretty funny.
      Loverock Davidson
      • RE: MSN claims online record for Live Earth

        @Loverock Davidson
        it says: 07/09/2007 06:06 AM, so it's actually 4 years ago. :P
        kevintxu
      • RE: MSN claims online record for Live Earth

        @kevintxu
        LOL thanks, I can't count! For some reason I read it as 2009. I <3 dyslexia.
        Loverock Davidson
  • I'm going to sit back with some popcorn

    and wait for the show: An upbeat article not dissing MS!
    Like that won't get the Ron Bergundys and HollywoodDogs in an anti MS bashing contest!

    Roll that beautiful bean footage, Duke! ;)
    John Zern
    • RE: MSN claims online record for Live Earth

      @John Zern
      you forget "Economister"
      illegaloperation
    • RE: MSN claims online record for Live Earth

      @John Zern
      Don't forget Ron Bergundy's clone.
      Ram U
  • RE: MSN claims online record for Live Earth

    The author is from Seattle, which of course means he is a bought and paid for shill from Microsoft.
    The "consumer" has spoken and Windows phones are collecting dust on shelves.
    Nokia has expertise in selling flip phones to Indonesia and India.
    Go back to sleep, please.
    cameljockey
    • Of course....

      @cameljockey <br>Because the whole population of the City of Seattle are bought and paid for by the Microsoft Mob.

      Where are you from? Cupertino?
      dazzlingd
      • It appears that these boards are being overrun by many suspicious people

        @dazzlingd
        Many with names we have not seen before. In many cases they seem to overly praise Apple as though their very lives depended on it.

        I am begining to wonder if this is an attempt by Apple to discredit their competitors, while continuing to push their own products.
        :|
        Tim Cook
    • RE: MSN claims online record for Live Earth

      @cameljockey

      The consumer has spoken. They are buying windows phones at roughly the same rate as the original iPhone.
      SlithyTove
      • Really, last I checked the iPhone SOLD over 1 million

        @SlithyTove withing the 1st month in the game. MS is almost 1/2 year and still hasn't hit 1 million SOLD phones.

        In fact, MS is son embarrassed by the number that to this day, it will only tell you a made up number of licenses delivered (not sold) and refuses to talk about actual sales. The only (unofficial) reliable number shows that it still hasn't hit the 500K mark.
        wackoae
  • RE: MSN claims online record for Live Earth

    In think Nokia will have one vital advantage. They can bring in new hardware features and request MS to simultaneously release the software support to take advantage of that hardware feature. This will give them many month before other OEMs can come up with hardware to take advantage of the added software support.
    kevintxu
  • Well, clearly......

    the shareholders of Nokia do not agree with you, so the title is pretty stupid.
    Economister
    • But not for the reasons you believe

      @Economister
      The major concearn with Nokia's investors is not that they believe this will result in a drop of phone sales, but by speculation that much of the programing will move out of Nokia to North America (Microsoft), thus the lose of jobs at Nokia.

      Would they have chosen Android, much the same fears would have still taken hold as much of what would have been done with the Android operating system would have moved to Google, thus the loss of programmers.

      Understand that companies like HTC, Motorola, Samsung obtain their operating systems from other companies, they do not create their own from scratch, unlike Nokia which created Symbian for their phones, and derived revenue from it.
      But it had also dropped in years going from 80% of the market to 36% of the market.

      So you are correct that investors are understandably worried of the deal, but not for the reasons you believe.
      :|
      Tim Cook
      • RE: MSN claims online record for Live Earth

        @Mister Spock
        Well, whatever the reason is, they are worried enough to tank Nokia's share price about 20%, in a matter of days.

        If this continues, there won't be much left of Nokia to produce Windows Phone....phones.
        Theseus
    • The stockholders aren't thinking

      They're too afraid of change.
      Michael Alan Goff
    • RE: MSN claims online record for Live Earth

      @Economister

      Well, clearly the 75% drop in the stock leading up to the wp7 announcement indicates that they REALLY weren't happy with sticking to symbian and meego either.

      Clearly the announcement gives plenty of reason to sell stock regardless of whether it's a good idea or not.

      Clearly the stock price drop is being used as confirmation bias by those who don't know much about how the stock market or traders operate.
      SlithyTove
  • The MS /Nokia marriage will turn into a

    dysfunctional family when virus, malware,rootkit will harpoon this those nice little nokia phone.

    Its MS after all yes it will work it will .....wait they said that about zune too and some other stuff from ms ...hummmmmm

    Yet it will be great for technician, because why do we have so much work, because there so many windows use .... if we would be all open source and apple we would be jobless thx you ms for doing such crappy stuff
    Quebec-french
    • RE: MSN claims online record for Live Earth

      @Quebec-french
      So you say 90% of world population are dumb. You are so great you highness.
      Ram U