Instead of reacting to every tweet out there that says this partnership is combining the worst in software and hardware and thus is destined for failure, let me explain to you in a few paragraphs why I think this partnership is set for success.
Microsoft has a long history in mobile devices. Their Windows Mobile phones were the first viable smartphones out there. Together with manufacturer HTC they opened up the market and pretty much owned it for a while. The problems started when they underestimated the importance of this market. As a consequence, they didn't invest enough R&D money in Windows Mobile and soon competitors like Apple and Android took the market. Manufacturers like HTC had no alternative but to switch to Android.
Nokia has an even longer history in mobile devices. They have always been excellent at finding product-market fit, something that defines the success of every consumer company. When the computer guys entered the mobile devices market (Microsoft, Google and Apple), they did not aim for product-market fit, but they aimed at creating a new market. And they successfully did so. Nokia could not neglect their existing market and tried several strategies to have a foot in both the traditional mobile phone market and the new, app driven, smarthphone market. Symbian, S40, S60, MeeGo and OviStore are all tactics that fit in these strategies. Nokia failed horribly in executing their strategy for the same reason as Microsoft failed: they underestimated the importance of the new market. As a consequence, they held on too long to their existing ecosystem.
In the meanwhile both companies have taken drastic measures. Microsoft abandonned Windows Mobile and poured a ton of money in the R&D for a new mobile OS. The result is Windows Phone 7. And I can tell you: it is fantastic. Not because is has a better UI than the iPhone or because it has greater multitasking than Android. It is fantastic because it is oriented at the average consumer and not at whizzkids. Those consumers also want in on the smartphone deal, but they don't want any of the complexity. Try the OS (or even better, give it to your mother in law) and you will realize this is a winner. Nokia already prepared the exit of Symbian by creating MeeGo. But they realized things needed to go faster. Android was not an option since this would mean Nokia would be commoditized between all of the HTC and Chinese manufactured phones. As a market leader (yes, they're still the market leader in mobile phones) they have to capitalize on their installed base and this can only be done by creating a closed and polished offering. Failing to create a stunning mobile OS themselves, they only had 1 option left: find a partner. And as it happens to be, Microsoft is the only party out there that has such an OS.
For Microsoft, Nokia is the ideal hardware manufacturer. They have worldwide distribution, they have engineers that can create hardware to fit the Windows Phone OS and they have a compatible brand image. If Microsoft had been 2 years earlier they could have gone with an open partnership strategy like what they did with MS DOS and Windows, but with Android already having taken this market this is no longer possible.
Together, both parties can bring the best of both worlds (a great mobile OS and fantastic hardware and distribution capabilities) to the market. This is not only a win for Nokia and Microsoft, but also for the mobile industry. We now have Windows Phone as a viable contender in the marketplace. Microsoft-Nokia will offer a platform strategy that falls between the closed Apple model and the open Android model. This is good news for both consumers and for the mobile applications market.
I agree that this is a good choice (I don't get the drop in stock value) BUT should nokia not have gone all the way and asked for exclusive rights on the OS? Now they seem to be just a partner (or an OEM like some say). The real value on the long term is in the software; everyone can produce the hardware so Nokia should have a long term strategy for this.
ReplyDeleteDag Koen
ReplyDeleteVerfrissende kijk en ik volg je hier volledig. Het worden toch nog boeiende tijden op de mobiele markt!
@anonymous there have been talks of Microsoft wanting to take over Nokia. I believe the partnership goes way deeper than what is announced in the press. It will not be long before it turns into an exclusive partnership.
ReplyDeleteNokia and Microsoft collaborating has the potential to create "The Third Ecosystem". It will require a lot of work over the next years to galvanize developers, update the whole Windows Phone code base to current standards, give the user experience depth beyond the surface level and get the app purchasing model working. Without an equivalent to iTunes, that is going to be hard work.”
ReplyDeleteUnfortunately, Nokia’s CEO didn’t see any better alternative than jumping from his “burning oil rig.” Nokia went back to the steam roller, which was forgotten and rusting. They painted it and gassed it up – and once its engines are warm, it’s going to steam roll over them. Because, underneath it all, Microsoft is still Microsoft.