Second-generation Nokia Android phones show Microsoft's new priorities

Second-generation Nokia Android phones show Microsoft's new priorities

Summary: In the mobile market -- at least the higher-volume, lower-cost part of it -- the new Microsoft is looking to make money on services, not operating systems.

TOPICS: Mobile OS, Mobility

Some didn't believe it would happen. Others didn't want to. But on June 24, Microsoft took the wraps off the second generation, Android-powered Nokia X2 phones.


The move shouldn't have been such a surprise, yet to many, it was.

Top Microsoft execs, including Devices business chief (and former Nokia CEO) Stephen Elop and operating system group head Terry Myerson both indicated earlier this year that Microsoft was planning to put its muscle behind the Nokia X phones. The official line has been that these phones provide Microsoft with a gateway for potentially getting new users interested in Windows Phone.

One key -- if not the key -- to these Nokia Android phones is the set of Microsoft services that are preloaded and/or available for the devices.

The core is the consumer services trinity: OneDrive, and Skype. These are the consumer cloud services that Microsoft is hoping it can parlay into business service demand somewhere down the line.

It's also interesting that Microsoft's OneNote note-taking app is available for the Nokia X2s, too. OneNote is one of the core investments for the company -- right alongside, OneDrive/SharePoint and Skype/Lync.

Microsoft is making Windows available for zero dollars (a k a free) on phones and tablets with screen sizes of under nine inches. That means the company is counting less and less on the Windows operating system as a revenue source. Instead, services and applications are where Microsoft management are looking to earn money -- through ads, subscriptions, premium upgrades, etc. -- in the future.

Seen through that lens, the Nokia Android phones are vehicles for Microsoft's future revenue sources -- just as Windows Phones are -- now that the Windows Phone OS is free. That's why I bet there could be a generation three, four and more of Android-based phones in the pipeline from Microsoft.

For a company that's emphasizing "cloud first, mobile first," the claim that "More people are now connected to the Microsoft cloud through Nokia X" fits right in.

While on the topic of the Nokia X phones, I noticed a couple of surprising (at least to me) things about the second-generation phones unveiled today:

1. The default browser is Opera. While IE isn't available on Android, Microsoft's choice of Opera is not what I'd have predicted, given past wranglings between the two companies.

2. Those who bought the first-generation Nokia X, X+ and XL devices won't be getting the updated version of the "X platform," which includes a new homescreen pane and other performance and UI updates. Microsoft is attributing this to incompatible hardware. Officials say more updates will still come to the first-generation Nokia X phones to improve users' experience, however.

Topics: Mobile OS, Mobility


Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • iPad running Android anyone ?

    This is just hilarious. Ironically the Microsoft (Android) Phone will probably be a stronger product than the Windows Phone. Now that would place Microsoft in a difficult position. Oh wait no it wouldn't as Microsoft would just discontinue the Android variant which ultimately would bring more business to Samsung and crew.
    • Hmmm...

      If you have been watching hands-on with these phones, they are certainly not stronger products than the WP offerings. But anyway, I dont care that much about the underlying code. My problem with MS currently is that they are behind just because they have been slow, and now they are not focusing anywhere. How you become faster if you don't focus your slow efforts? I don't really think they have found their path just yet.
    • What's hilarious... your copying/pasting the same comment from article-to-article on this topic. Do you really think it was _that_ clever or pithy?

      "Microsoft (Android) Phone a stronger product"
      "place Microsoft in a difficult position"
      "bring more business to Samsung and crew."

      And if wishes were horses, beggars would ride.
  • Second-generation Nokia Android phones show Microsoft's new priorities

    Makes me wonder what kind of people wouldn't believe this would be released. Microsoft inherited these phones from Nokia and it would be silly for them to not try to sell them and gain some profit. The phones were already manufactured and just need to be on a shelf. The question is once these X2 phones are gone will there be any more in the future? I can only hope not. Microsoft is using the X2 as a transition to their own Microsoft Windows Phone. Get the users connected through Microsoft's own services, then once they see the problems with android like app freezes and random reboots Microsoft can tell them to use Microsoft Windows Phone. All the same services, none of the hassle.
    • Zune

      Did Microsoft inherit the Zune? Perhaps is just that Windows on any hardware is garbage, which is why they need Linux to rescue them. They're already making tons of money from Android licenses. Once again, Linux rescues Microsoft.
      • can't tell if you're serious

        That false statement is funny. Thanks for the chuckle.
        Justin M. Salvato
      • Well seeing how the development

        Well seeing how the development started before Nokia became Microsoft Mobile, I would say it was inherited; Its well documented. If you had used a Zune you would have seen a UI and UX that are best in class; it may not have flopped but as a service and hardware it was one of the best deals going at the time. Windows NT based OS's have been darn good and have only gotten better(maybe 8 was a horizontal move even then it has improved the basic OS beyond the UI. But I get the feeling no matter what the subject was your comment would have taken a similar tone, you don't like windows and want the world to know it. There's a difference in needing and using resources acquired from Nokia. If they had shelved Nokia's Android phone it would have been a waste of resources; so in this case why not try and make the best of it and try and get users to use their services.
      • That's the Question I Had

        Does the MS Nokia division (or whatever they call it) have to pay the royalty ransom to Redmond?
        • Of course not

          MS doesn't have to pay itself.

          Also, how are royalties ransom?
          x I'm tc
          • sure they do

            If there are licensing costs, of course MS Nokia will pay them to MS Licensing. The money stays in house but it becomes an expense that offsets any profit. Think taxes.
    • With Nokia, Microsoft picked up Android property rights.

      These property rights create a bridge to OneDrive and Office on Android. Subscription services is a win-win for Microsoft. Samsung is a Microsoft partner as well as a Google and an Apple partner.

      If Samsung customers want Office on Android, Samsung will give it too them.

      This move only hurts Apple - oh, and Google ...
      M Wagner
      • Android property rights?!

        Larry Ellison of ORacle put it rather well (I'm paraphrasing), "nobody owns open source software".

        The only Android property rights that Microsoft gets from the Nokia acquisition is from source code that Nokia added or modified relative to AOSP under non-GPL licenses (the Linux kernel is licensed under GPL).
        Rabid Howler Monkey
      • What is this alleged hurt?

        Microsoft's phone business is relatively trivial compared to Apple's or Samsung's.... Don't expect either are figuring on a whole lot of hurt.

        As to the X2 phones, it is an interesting play. Hard to know what they're thinking, but it definitely implies a services first approach.
    • Good observation, MS is now a hardware company

      What most people who criticize Nokia X forget is that this is not Android, is an Android clone running Microsoft services just like Amazon does on their Kindle tablets and Samsung does on their Tizen phones.
      Gabriel Hernandez
      • Tizen?

        I'm not aware that Samsung has manufactured a Tizen-based phone for distribution. To my knowledge, the only Tizen-based kit that Samsung currently distributes is related to smartwatches (i.e., Gear).

        And don't Microsoft services run on Microsoft' servers (read Cloud)? There's nothing to prevent a Nokia X2 user from using Google or Amazon services, as examples, with the Opera web browser which defaults on the device.

        P.S. Am not aware of any smartphone from any manufacturer that currently runs Tizen.
        Rabid Howler Monkey
        • No Google Play

          Nokia X phones don't have the Google Play access, so it might be hard to use Google services without the apps, unless you're masochist enough to access through mobile web browser...
      • Tizen isnt a Android clone

        Tizen is a Linux based os just like android, more like cousins than a clone
        • Sort of depends on what you consider Android

          If you consider Android to be an OS, then it isn't Linux, it's Android. But if you consider Linux to be the OS, then Android isn't an OS, it's...something. Just a Linux distribution? An API? A set of services? Dalvik? It get's even more confusing when you take the fact that there are open and closed source components of what Google markets as Android.

          If you look at the Wikipedia page, it is pretty clear even they don't know how to actually define what Android is.

          To my mind, the thing made and shipped by Google via the Open Handset Alliance is Android. Anything else -- and that's probably 95% of all devices sold as "Android" by Samsung, HTC, Motorola, etc. -- aren't actually android, but forks of Android. Tizen runs nearly all Android apps. It doesn't do it through virtualization or emulation, but natively runs them. In that sense, Tizen is just a very forked Android.

          These things defy convenient labels.
          x I'm tc
    • Microsoft is converting a disadvantage to an advantage...

      Microsoft has always been a master of leveraging its strengths to turn a weakness into a monopoly.

      With the Windroid phones, Microsoft is doing using the "free-ness" of Android against Google. Any successful "fork" of Android weakens Google and its grasp on Android. Since most people who buy Android phones don't even know that it runs Android, Microsoft can attract consumers (possibly LOTS of consumers) with low prices and pretty hardware.

      We'll see if it works, but it's an interesting strategy.
      • yup

        Even if they don't buy another phone from Microsoft, windows phone or MS-Android as long as they are able to get them to use their services its a win for them. This is a services play with the bonus that it might help increase the app count for windows phone if they are able to leverage Android development to help WP Apps, maybe with a strategic purchase of Ximian.