Per Ola Kristensson | Blog

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On Nokia and Microsoft

Saturday, February 12th, 2011

By now it seems everyone has some form of opinion on the announced Nokia and Microsoft collaboration. Most of the opinions I’ve read or heard essentially state that Nokia risks becoming a low-margin hardware manufacturer while Microsoft may benefit hugely from using Nokia’s market share to spearhead their reattempt to enter the mobile operating system (OS) war.

So what’s in it for Nokia? I think it depends hugely on the unannounced details in the deal. If Nokia gets some form exclusivity on the Microsoft Windows Phone OS and accompanying app store that they can leverage then I think Nokia’s CEO may have made a very smart move. Nokia wants to avoid Google’s Android OS, which is rapidly becoming a lowest common denominator OS for a variety of manufacturers (for example, Samung, HTC and Sony Ericsson). The best situation for Nokia would probably be if they had their own version of Apple’s iOS. However, for various reasons Nokia failed to execute on this very sensible strategy (the OSs Symbian, Maemo, Meego are seen as non-viable today). Hence the conclusion is that Nokia has now realized their engineering divisions are simply incapable of creating a competitive OS and ecosystem that can rival Apple’s iOS. However, Microsoft can, indeed they have already done this with the Windows Phone OS. Contrary to popular opinion it is a very well-designed system. If you haven’t tried it, you may think Windows Phone is the Windows Mobile disaster all over again. It is not. Try it! Thus Microsoft provides Nokia with their very much wanted exclusive OS and ecosystem that Nokia can use to avoid being diluted to just another hardware manufacturer for Google’s Android OS. However, it really depends on the details in the deal with Microsoft. There is a long list of companies that tried to collaborate with Microsoft and failed miserably. Perhaps this is the first move before a full-scale Nokia takeover by Microsoft? It may not necessarily be a bad move for either company.