Nokia boss: 'Surface phone' and Apple-Android fears will kick-start Windows Phone

Nokia boss: 'Surface phone' and Apple-Android fears will kick-start Windows Phone

Summary: Nokia CEO Stephen Elop told analysts on Thursday that the Windows Phone ecosystem, and its own device hopes, will improve as mobile operators' concerns grow over a two operating system world - and if Microsoft decides to make an own-brand phone.


Nokia CEO Stephen Elop reckons carriers' fears over the Android and Apple duopoly will force the birth of the Windows Phone ecosystem that he's bet the Finnish company's future on — an ecosystem he believes would benefit from Microsoft's presence.

Stephen Elop
Stephen Elop. Image: Stephen Shankland

"There's a dynamic I think we're seeing — and it's spilling out into public discourse particularly in the US — and that is increasing concern amongst operators about the concentration of, if you like, power that is landing with two particular ecosystems that are obviously quite strong out there today," said Elop said on a call with analysts on Thursday.

Nokia on Wednesday announced a not-unexpected lacklustre third quarter ahead of the November launch of its Lumia 820 and 920 smartphones. Its smartphone sales dropped from 10 million in the previous quarter to 6.3 million — just one million more than the number of iPhone 5s Apple sold in the first weekend after launch

Nokia's fortunes will change in the fourth quarter and throughout 2013, according to Elop, when he expects to see operators in the West starting to say "we need a third ecosystem to really begin to happen and we really need to double down on it, we need to cause it to happen".

Elop said operators had made decisions to combat rivals' "hit products" in the past and will be able to do so again once Nokia ships its Lumia 820 and flagship Lumia 920.

Nokia's main targets are Android and Apple, according to Elop, but the company also faces challenges from competitors in the fledgling Windows Phone ecosystem — competitors that could even one day include Microsoft, which is rumoured to be launching a smartphone under its tablet Surface brand.

If it does bring out an own-brand phone, Elop would consider Microsoft both a boon to the Windows Phone ecosystem — but ultimately an adversary too.  

"I think [a Microsoft smartphone would be] certainly a stimulant to the ecosystem. As I said earlier, we're encouraging HTC, Microsoft and Samsung to have devices in the market and to be making whatever investments to help spur the ecosystem on. As it relates to the competitive aspects, anyone else in the ecosystem is some form of competitor."

Even though there are likely to be several OEMs launching devices bearing the "Windows Phone" branding, Elop hopes Nokia's intellectual property will give it a advantage.

"This is a result of taking those unpolished gems from our R&D labs and landing them in the Lumia product and of course that's well protected by intellectual property and something that we would use to differentiate regardless of who our competition might be." 

According to the Nokia CEO, the key differences are the company's positively reviewed PureView camera, the Pure Motion HD display, and the mapping and location-based services that Nokia talked up after Apple's rocky replacement of Google's maps app with its own in iOS 6.

Topics: Nokia, Microsoft, Smartphones, EU, Windows

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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  • I hope Nokia isn't making a mistake with AT&T exclusivity

    I would buy a Lumia 920 on day 1 but I'm not (yet) prepared to switch to AT&T in order to do so. Let's hope for the sake of a good, competitive market that the number of sales Nokia gains from AT&T's marketing might (ugh) more than makes up for the millions of lost sales from people like me who aren't on AT&T.
    • Youll be able to get after the exclusivity period expires.

      I wouldnt worry about that. And if it does cost them share they just wont do it again with the 930 or whatever their next model number is.
      Johnny Vegas
    • What operator concerns is he talking about?

      What do operators care if there're 2 or 2 dosen ecosystems? What does Dell care if there's Windows or Linux ecosystem? They don't. All they care about is demand.

      Elop's an idiot and he more than aptly proves it whenever he gets a chance to open his mouth.
  • Nokia CEO: Windows Phone will get boost from Surface phone, fear of Apple-A

    No doubt its going to improve with Microsoft Windows Phone. AT&T and Verizon have both said they want more players in the market so that they are not dependent on one or two types of phones. Nokia's 920 is going to sell millions of units, Verizon needs to get on that ship as well. 4th quarter should bring in some very good results for them.
    Loverock Davidson-
    • What Elop effectively said is that . . .

      people should buy WP8 phones, not because those are inherently better than iOS or Android phones, but simply to break the iOS/Android duopoly. This is not the type of talk I would expect from the CEO. It is hardly a stunning ensorsement of WP8 phones! I guess that there is no much else that he can say given the comparatively poor sales of WP7 phones.
      • Worse than that

        He say that carriers should come and rescue his company.
  • This man should go to jail

    For destroying the most successful mobile phone company in the world!

    All he says basically is "help us remove those people, so that we can sit in their chairs".
    • you

      really dont know what u are saying. Elop is actually helping the company. I believe Nokia would hv crashed without his arrival. He was bold enuf to let go of the sentimental Symbian OS. Give him a break.
      • "Sentimental"??????????????

        You know Symbian is OUTSELLING WinP7 ... And with better profits ....

        And it was ON THE GROW AND WITH GROWING PROFITS, before "burning platform" memo.

        In fact platform was not burning, but bringing steady flow. But one CEO pured gasoline over it and through lighted match on it...

        SYMBIAN WAS NOT DEAD. If fact as recently as THIS QUARTER, Nokia prized SYMBIAN HANDSET for achieving operational profit for mobile division. (Asha line)

        Wake up buddy. Go read some facts or something cause you are really out of touch with reality on that story.
        • "Wake up"?

          Symbian is only outselling Windows Phone for the time-being because they are selling cheap Symbian phones in developing countries. NO-ONE in any developed country wants a Symbian phone. No-one. Windows Phone is only just starting to take off, and Elop made the best decision in the company's history by taking that bet.
          • N9 outsold Lumia 900

            What do say to that?
          • Actually..

            It was the 808 that was selling really well, and in 'developed' countries at that.
      • *** Sigh, such statements of conviction ***

        Do you realize that Symbian phones are still hugely popular in larger developing nations, and Nokia still is huge in such places ? Why do you think the new Asha phones arew suddenly doing so well and even outselling Lumias ? Symbian is effectively dead, yet STILL outselling Lumias ! In a place like India, a Lumia is equivalent to 3, 4 or 5 months salary for many people, and more than that for many more. Yes, North America might have high smartphone adoption and Nokia was keen to get into this, but to sacrifice the company cash cow in order to break into a smaller market and in the way it was done shows a total lack of understanding of demographic share. Some of you need to realize that there is a much bigger world outside of the US !
      • Elop helps saving NOKIA from the living dead

        Otherwise, NOKIA would be dying the slow death like RIM now. Only big-brother ecosystem will survive. WINDOWS, APPLE, ... might be ANDROID for cheap devices.
        Iam Dust
    • The alternative was to do what RIM did


      How well has that worked out for RIM?

      Nokia could have continued doing nothing in which case it is almost certain that they would be better off today and it is almost certain that they would be bankrupt tomorrow. Nokia could have switched to Android, an OS that has killed many manufacturers, Samsung being the ONLY exception. They could have stayed with their own OS, a strategy used by Palm and then HP. Oops.

      One will be able to use all the 20/20 hindsight in the world to try and determine whether or not "betting the company on Windows Phone OS" was the right option. Elop didn't destroy the company, the company had started its slide long before Elop joined. Their options were to do nothing and continue the slide to bankrupcy or to risk it all for a better future outcome. If this works, Elop will be regarded as a hero. If it doesn't, he won't be regarded as any worse than Motorola, Palm, HP, or HTC, none of which bet the company on Windows Phone, all of which are big losers.
      • What Nokia could do

        Take a look at Apple. Why are they successful? Simple: vertical integration.
        Apple makes everything they sell themselves. They even design their very own CPU. Who knows, they might be ready with their very own CPU architecture soon!
        Why? Because when you depend on a "partner" it all sounds easy and cheap, but it *will* eventually fail one day and if you depend on that partner too much, you will be badly hurt.

        Android manufacturers don't make a dime, because they depend on Google. And Google doesn't care about their fate, as long as their spyware gets into more people's devices.

        Now, back to Nokia. Few people know it, but in mobile phones Nokia has had *huge* lead. They are designing this technology for decades! Nokia has this "telecom division", that designs, builds and sells the base stations to the carriers. They have extensive knowledge and control of both the "client" and the "server" sides. Finally, Nokia has had lots of development in the software front -- their mobile phone software has always been very consistent and appreciated.

        Nokia got scared by Apple and Android, why? You don't have to be Apple in order to succeed -- you only need to keep your acts together and have vision.
        RIM.. is bad example. Their primary focus was with providing enterprise lock-in, much like the model Microsoft is using. Both did not read all parts of that page, originally written by IBM.

        And.. if it all does not work? Will we finally have Elop's head? :)
        • Vertical Integration

          Apple doesn't manufacture anything. Did you not get that Samsung basically made the iPhone for Apple? Apple didn't make the A6 processor currently in their phones. Samsung did.
          • Cut the propaganda

            The A6 CPU is designed by Apple.
            Samsung might be manufacturing it. If you know something about today's semiconductor manufacture you will understand this can be done in your garage, as well: you just shell some amount for the fab and then you just package the chips that come out of it. Nice "added value" business.

            It's likely the next Apple CPU will not be even stamped by Samsung on silicon... but who cares?
          • Are you seriously that misinformed?

            First Samsung made some PARTS for Apple not the phone... Foxconn workers assembled the devices. Also Apple DID create the A5 and A6 processors - Samsung simply made the processor per Apple's specs. Apple is not a manufacturer but that does not mean that Apple did not make, design, and patent the parts in the iPhone as well as the design and the look and feel of the iPhone.

            IOW you are saying that Dell does not make computers, HP does not make computers, Nintendo does not make Wii consoles... those too are manufactured by Foxconn.
        • Android is not spyware, Apple shouldn't have so much power

          A base Android system really doesn't have any "spyware" any more than you opt in to. I can't speak for all manufacturers of course, but Android is not in and of itself a spyware system. If you install ad-displaying apps, well that's your choice, and that choice exists just the same on Windows Phone and iPhone for apps that want money but make it "free." Given that Android's source is given to the world, people would easily detect and chastise Google if they actually made it a big spyware machine.

          As for "build it all yourself", this is a one-way ticket to being anti-competitive. Apple may have the benefit of knowing their hardware inside and out, but no one else is allowed to make a cost-reduced iPhone. This allows Apple to control their market with an iron fist. "IBM Compatible" PCs would never have taken off if IBM hadn't been generous enough to release their specs and BIOS code to the world on the original 1980s IBM PC. We gained this kind of acceptance of a platform due to openness, not closed-source. I would much rather give "anyone" a chance to build a mobile phone on the Android platform than to let Apple rule the world.
          Robert Showalter