Nokia's secret weapon in Microsoft sale negotiations: A working Android Lumia

Nokia's secret weapon in Microsoft sale negotiations: A working Android Lumia

Summary: Nokia had an Android-powered Lumia up its sleeve before it entered talks over the sale of its devices business to Redmond.

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It turns out Nokia had a working Android Lumia smartphone up its sleeve when it headed into negotiations with Microsoft over the sale of its devices and services business.

A team within Nokia had made an Android handset well in advance of the negotiations between the two that began in February this year, according to a New York Times report, which cited two sources briefed on the effort.

While its existence is not so surprising, as the report notes, it could have served as a reminder that Nokia had another option besides selling the company during the negotiations over several months that led to the announcement of the $7.2bn sale earlier in September.

Unlike Microsoft's other Windows Phone partners Samsung, HTC and Huawei, Nokia had entirely committed to Windows Phone in the long-term and in return received, among other things, support funds from Microsoft of around $250m a quarter. But Nokia had the option walk away from the agreement in 2014.

And with Nokia's concerns about Microsoft entering the smartphone hardware business itself make Nokia's flirtation with alternative OSes and the existence of a working Android Lumia even less surprising.

As ZDNet reported in March, following Microsoft's Surface tablet launch, Nokia acknowledged a new risk in its 2012 annual SEC filing that Microsoft may expand from tablet hardware to smartphones, which it feared could lead Microsoft to focus on its own devices over those of its partners. 

At the announcement of the acquisition Nokia chairman Risto Siilasmaa reiterated this concern, saying that Microsoft's Surface-led entry into hardware in June 2012 triggered a search in Nokia for "all imaginable alternatives".

The question for Microsoft's remaining Windows Phone partners is whether now, with Nokia's devices business under Microsoft, they share the same view as Nokia — even if they are a lot less dependent on Windows Phone than Nokia was.

As for Nokia — the pieces of the company that aren't being sold to Microsoft — it could still in theory make handsets based on Android, but that won't be able happen until at least 2016.

Further reading

Topics: Smartphones, Microsoft, Mobility, Nokia, Windows Phone

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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Talkback

14 comments
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  • might have saved them.

    At a minimum it shows the flexibility of Android.
    jessepollard
    • After they saw how clunky Junkdroid was ...

      on their hardware the commitment to WP was finalized.
      LBiege
      • You read the article, right?

        The phone was built to demonstrate that the business of phones is in fact a business, and that Nokia had viable alternatives, if the negotiations proved too unfavourable. Their commitment wasn't "finalized" by this demonstration, it was shown to have some definitive limits.
        Mac_PC_FenceSitter
  • Google's Motorola

    Google owns Motorola too...
    JonSawyer
  • How many stories do we need?

    Windows Phone Central, Engadget, The Verge, and Cnet all had an article on this Friday. Is there a reason you had to post about it... Again?
    Bob Sentell
  • Sounds like Nokia was "playing hardball"

    A Lumia running Android sounds like an aggressive "We don't need MS!" statement from Nokia. Could Nokia have done this to *force* MS to buy its devices and services business?
    Zogg
    • It did this to gain leverage

      Everyone wants to be seen as having a strong hand at the poker table. Why should it have been any different for Nokia?
      Mac_PC_FenceSitter
  • sour grapes

    Microsoft acquiring Nokia phone name and patents, how this gonna work with remaining Nokia?
    jonnybr
  • The question still remains

    was Elop just a Ballmer's trojan, or a Microsoft zealot. The Nokia board are neither. How much brain power would one need to see all the "fruits" of that voluntary imprisonment of one and only one proprietary smartphone platform, pretty risky and not yet popular? With all of its own R&D (Symbian, MeeGo) being flushed down the toilet?
    eulampius
    • Well...

      If Elop was just Ballmer's inside guy, why did he have Nokia build an Android Lumia for buyout negotiation leverage? It's possible he cost Microsoft at least $1 Billion (if not more) with that move.

      I don't think there is a conspiracy here.
      toe cutter
      • "I don't think there is a conspiracy here."

        No conspiracy, just someone's idiocy multiplied by the Microsoft shares Elop owns. That's it.
        eulampius
  • Well, this puts to rest the hypothesis that Microsoft killed MeeGo

    Otherwise, Nokia wouldn't have been able to port Android, the dominant Linux-based mobile OS, to its Nokia smartphone.

    One more FOSS myth destroyed.
    Rabid Howler Monkey
    • Elop killed it

      He is one of the major Microsoft shareholder, with brains being long soaked in things Microsoft with all of its predatory culture, full of MS zealotry. What a surprise, killing off a Linux platform? So, it's still Microsoft killing off a weaker Linux platform here, contrary to your very conspicuous FOSS myth busting abilities.
      eulampius
  • Nokia's secret weapon in Microsoft sale negotiations: A working Android Lum

    I don't think that's a secret weapon against Microsoft. It was more like a fallback plan in case the the lumias didn't sell. They would have so much competition if they tried to sell their phones with android on them.
    Loverock-Davidson