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

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.
Written by Liam Tung, Contributing Writer

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.

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