Nokia reportedly building Android phone, and why that isn't such a bad thing for Microsoft

Nokia reportedly building Android phone, and why that isn't such a bad thing for Microsoft

Summary: Microsoft may want to take the highly-coveted third-place space with Windows Phone in the market share rankings. And it's not far off, thanks to BlackBerry's decline. But it all boils down to money. And Android makes Microsoft plenty of dough.

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An Android-based Lumia-like device? Anything's possible. (Image: CNET)

Nokia's next big move may be into the Android space, if multiple sources are to be believed.

First reported by The Verge and confirmed by AllThingsD, "Normandy" and "AoL" (or Asha on Linux) is likely Nokia's upcoming foray into the entry-level Android market that would see its Asha line-up replaced. 

Step back for a minute. It may be early in the morning if you're reading this. But take another sip of coffee and reevaluate this one for a minute.

Amid a near all-out takeover of the Finnish phone maker, for Microsoft it's not such a bad idea.

There's no doubt Microsoft wants the mobile market share. It's one of the main reasons why it bought Nokia's devices and services unit — the main Windows Phone maker on the market with about 80 percent of all devices sold. According to the latest comScore figures, Microsoft has a marginally rising month-on-month 3.2 percent share of the overall mobile market share slice, and could take the third-place slot by the New Year if BlackBerry's can't stem its decline.

But such a move by Nokia shouldn't come as a great surprise. An earlier September report from The New York Times pointed to Nokia dabbling with Android long before the Microsoft deal, which saw Nokia agree to take on Windows Phone as its primary mobile platform. 

Whether or not Microsoft takes on the project once it fully acquires the phone-making unit is something else. But it does make sense — at least in the short term.

Android makes Microsoft a lot — again for effect, a lot — of money. If the figures are to be believed, Android's licensing agreements with smartphone firms earned the Redmond-based software giant close to $2 billion in royalties for the 2013 financial year. 

Broken down on a unit basis, that's between about $5 and 15 per Android device unit that goes directly into Microsoft's coffers. That's a significant amount more than what Windows Phone brings in — roughly $347 million in gross profits.

While Android remains popular, leading with the highest overall market share of more than half, it's in Microsoft's best interests to keep Android ticking over. 

Android isn't going away any time soon. Its popularity has no let up in sight, even if Apple's iOS mobile operating system share is rapidly catching up to Android. It could however help Microsoft wean Windows Phone skeptics towards its own apps and services on a platform with a significantly higher number of apps.

According to one Nokia source speaking to AllThingsD, the Lumia-lookalike device may serve as a way to deliver Microsoft services to the Android-based device, like Skype and Bing. It would likely be easier to swallow for Redmonians who see Android as a gateway drug to Google services that are preinstalled on devices. 

Thanks to Android's heavily customizable core and surface, just as Amazon has with its Kindle line-up, Nokia and Microsoft could twist the software into an empty plate for its own products and services.

But it's not going to up-and-leave its Windows Phone efforts any time soon. Even if Microsoft doesn't go with Android once it fully seals the Nokia devices and services deal, 

A Nokia spokesperson told ZDNet it does not comment on rumour and speculation, as is often is the case.  

With Android on Nokia devices, even though it's soon to be a Microsoft division, the software giant could be having its cake and eating it too. And that's not such a bad thing.

Topics: Smartphones, Microsoft, Nokia

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31 comments
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  • I call BS on this!

    it won't happen especially now that MS has bought into Nokia
    warboat
    • Microsoft wants Android dead

      It won't happen, but that's Microsoft CEO Ballmer's fantasy dream.

      I thought Microsoft bought Nokia's phone division, but will only be able to sell existing Nokia branded phones. Any new models must be under the Lumia brand, and not Nokia phones.

      If the real Nokia can put together a new phone division, it would be free to release new phones under the Nokia brand.

      Ballmer will never release a Microsoft Android Lumia phone. He thinks Linux and open-source are "a cancer". But maybe the real Nokia will go Android.
      Vbitrate
      • Nope

        As part of the deal, old Nokia agreed not to re-enter the mobile device market for several years.
        bitcrazed
  • Nokia in trouble with India

    I read that Nokia failed to pay India a lot of taxes in the millions last I read. Not sure how that will affect Microsoft's buying of Nokia? If Nokia is doing a Android phone, its only because they need a phone that has the potential to sell more units.
    JohnnyES-25227553276394558534412264934521
    • Maybe you should read articles better

      The Indian government has been chasing a lot of large international companies and claiming they owe taxes. India just recently upped what Nokia supposed owes from 340 million, to 3.4 billion. Sounds realllllly fishy.

      Indian government is corrupt and uses tactics like this to get pay offs/bribes from large corporations. They know Nokia is in a corner and needs to have their assets unfrozen so Microsoft can get those assets when the deal closes.

      This is pure corruption on the part of India.
      spaulagain
  • I wonder if Google would allow it?

    It's a good idea, now that MS is a hardware maker, and if you can make a little extra money using your rivals' operating system, then why not?

    I'm wondering if Google could block it's use somehow (licensing wise) as I don't think Google ever expected MS to own a smart phone manufacturer that would be able to use their phone OS.
    William.Farrel
    • AOSP

      Google can't block anything* if they use AOSP and this is (was?) a plan. MS/Nokia can build own Android "distro", like Amazon build FireOS.

      *Google can block only some function like "google search" or others closed source and tied to Google.
      Mr.SV
    • I think What MS / Nokia Is Really Doing

      Is developing a new OS shell on top of Android that has all MS services, and apps (SkyDrive, Skype, Office, Outlook.com services, Groups, Rooms, Xbox) with Google's apps all gone. Do that and give it to Samsung, HTC, etc., to put on phones. Then MS still gets the revenue for the Android device sale and Google gets no ad revenue for every Android device sold this way. And MS gets the ad revenue instead. Maybe MS discounts the Android device sale on the patents because they will get ad revenue.

      That is a huge win for MS. MS gets more revenue, Google gets less, more people are using MS services and apps.
      rmark@...
      • it might be a huge pecuniary win, but

        in fact it's a revelation that their Windows is not as good as Android and Linux kernel. Well, on the other hand, everyone can see what a mole Steven Elop really was, having killed Meego and never tried Android.
        eulampius
        • Sure, whatever.

          You don't like the fact that MS will be making money from both Windows AND Android.

          in fact it's a revelation that Motorola's hardware is nowhere close to that of Windows based Nokia hardware, as maybe the biggest revelation of all is that you seemed to be so threatened by Windows, you have to spin everything MS related.
          William.Farrel
    • From what I understand Android is Open Source

      Therefore Google cannot deny Nokia/Microsoft the right to use it to sell the hardware.
      athynz
  • Let put it this way

    I get way more use out my 5s and note 2 than my lumia 928 and its very noticeable. Out of the 3 the lumia 928 is my less used phone as it really lacks IMHO and android is 3x times better for apps customization, and developer support. Even apple too has developer support as well as decent apps. I know app numbers are a marketing gimmick but out of those 1 million apps there are probably a lot of useful ones as well as some garbage ones. But I'm stuck to IOS and Android right now and use my lumia 928 less frequently everyday... Oh I forgot I'll let you know if my lumia 928 starts to develop issues such as random restarts or battery issues and even freezing with sending MMS or SMS messages as i had to pull my battery out and restart the phone as i had 4 message coming at the same time. This right here is a primary example on why I cant make the immediate switch to windows phone as "you get what you pay for" and these phones personally based on using of my lumia 928, there needs to a lot of improvements in order to do so. Lastly, when you are looking for phone to upgrade whether its Verizon Att t-mobile or Sprint, ask their representatives on how windows phone does.... as I made those visits as i own 3 phones and they said nobody buys those phones everybody wants samsung or apple. Heck, even blackberry 10 devices at Verizon as they said they have a bunch just taking up space and they only sold 10 if that at my local store. So obviously windows 8 pretty much hurt windows phone 8. I'm not saying windows 8 sucks as I do own windows 8 on a surface rt and on my laptop. But apps is main reason as well as account support too as everybody has different needs but most people use google products like gmail, youtube, and google maps. I known google will never go there but the majority wont switch unless the customer in particular had a bad experience with either android or ios.
    ITGuy000
    • sounds like a fairlytale

      928 doesn't have a removable battery, so your battery pulls are clearly made up.
      everss02
      • ok

        still all the more reason for the battery issues. the problem with non removables is the fact that evenful don't fulfill there 8 hrs. My 5s and note 2 have excellent battery compared to my 928. Oh by the way I do own a lumia 928...
        ITGuy000
        • If you own it, you'd know you didn't have battery pull

          So again, calling out your BS.

          My girlfriend has the Lumia 928 and gets great battery life. And you don't need to pull the battery to do a soft reset on Windows Phone. You hold down the volume and lock button to do a reset that is equivalent to a battery pull.

          Your story is BULL.
          spaulagain
    • Your Making This Up

      928 doesn't have a removable battery. Win8 runs forever with locking up. You clearly dont own a Windows Phone. Why the bashing and fake stories?
      Sean Foley
    • Apps

      Your app concern is a valid one. Although Windows Phone has plenty of apps for most users, some people have special needs that just can't be met by the platform.

      Just out of curiosity, what are your top three or four favorite apps that aren't available on Windows Phone?
      ParrotHead_FL
    • So you're so threatened by Windows Phone

      you need to lie?

      That right there tells me you're not remotely happy with 5s and Note 2, as instead of letting them stand on their own, you fabricated an entire issue to put the Lumia in a bad light against them.

      But then again, do you believe I have to pull the battery in my wife's iPhone 4 all the time due to freezing up? ;)
      William.Farrel
      • regardless

        Im very happy with my note 2 and 5s thank you very much. Oh I forgot you're part of 4 windows fanboys. I forgot to mention that as you're a paid microsoft shill patroling zdnet and declaring Microsoft a winner in both mobile tablet and desktop. I think all these Microsoft shills need a wakeup as you're mobile devices dont do half the $@#! that other phones do period. I own windows 8 and love it along with my surface rt too but windows phone 8 needs more for me to personally switch. But its that everyone on this site is either pro Microsoft or pro apple and anti google. If you guys actually have a life, actually live it as it pretty obvious that you patrol zdnet all day everyday. So my conclusion is that anyone posts here is either unemployed or paid shills looking for sturring up trouble... Its not to google search any of you guys posting here either especially our Microsoft paid shill!!
        ITGuy000
        • Microsoft shills, like mosquitoes

          are quite annoying; what a bunch of pathetic losers cheering a dead horse...

          lets face it:

          Windows Phone 8 -nodevelopers -no apps -no money to be made on apps
          Android -developers -apps -money
          iO -developers -apps -money

          Where do you want to go today?
          theo_durcan