On the face of it current reports about the new agreements between Nokia and Microsoft are nearly all positive, some saying that this is fantastic news for Nokia. The devil however, is in the details, it looks like a fantastic opportunity for Microsoft.
The Nokia CEO’s email outlined the challenges the company faced; Growing competition at the high end, with Symbian unable to compete in that area and with out MeeGo, Nokia’s new platform ready in time they didn’t have a product offering, or a footing to compete with.
The challenge was clearly to find something, quickly, which would allow them to compete. Put yourself in Stephen’s shoes, the first thing you would imagine doing would be trying to accelerate the development of MeeGo. Getting that platform out in a product earlier would have helped. One would assume that this was investigated and rejected, Nokia must of projected that it would simply take to long to produce. As Stephen Elop’s email mentions Nokia would have only one device this year.
Given the move to Windows Phone today this would imply that Nokia believe that they can have more than one Windows Phone available in market within 12 months, compared to only one MeeGo device, and that the combined Windows Phone sales and cross licensing of other additional technologies with Microsoft would be more profitable.
We can therefore conclude that the existing Nokia strategy obviously wasn’t going to match with the immediate business need.
The mobile phone ecosystem consists of many players, from application and 3rd party developers though to network operators, hardware manufactures and the eventual consumers. The software running on the handset has a large influence on each of the ecosystem’s stake holders. It is the platform that developers work and invest in. It provides a base set of capabilities which hardware manufactures work to match. It provides the end user appeal, and network operators try to convince us to purchase. Increasingly the ecosystem also includes the application retail and the relationship between the application developer and their end user, Apple does this well with the App store.
By passing on responsibility for the ecosystem to Microsoft does Nokia appears to give this up.
The Microsoft View
From Microsoft’s point of view this looks like a fantastic opportunity. With a young mobile OS which is still struggling to find its feed it needed a mature mobile player to help partner with it, and from which Microsoft could learn, they now have this with Nokia.
In addition Bing Maps and Microsoft’s location based solutions have been struggling against Google, with Nokia, Microsoft now has access to their superior map technology.
The collaboration with Nokia allows Microsoft to grow in both area’s and you can be sure that what is learned from Nokia about making mobile devices will be used to grow Windows Phone 7 and then used to help sell the platform to other mobile device manufacturers.
The Old Nokia Strategy - Developer Impact
From the developers point of view the old Nokia strategy provided an upgrade path. “Develop for QT!” Nokia said “ and your applications will work on both Symbian and MeeGo”. This keeps the developers relationship with Nokia, and with the addition of Ovi store engages the consumer and the developer directly. Moving to another platform changes all of this.
The New Nokia Strategy
In a nutshell the strategy calls for Windows Phone to replace Symbian, that Nokia will help Microsoft make this platform work on cheaper hardware. MeeGo will be a future platform for experimental systems, potentially becoming a meaningful platform in the future and that Symbian will effectively “end of life” soon. The Ovi app store will stay and will offer applications from Microsoft’s Windows Phone store and from the existing collection on Ovi.
Nokia’s Platforms: S40, Symbian, Windows Phone and MeeGo
The announcement that Windows Phone will replace Symbian leaves developers working with Nokia faced with a challenge - to continue to work on QT / Symbian applications, knowing that MeeGo sales will be weak, and that Symbian sales are likely to decline within the next 12 months, or move to Windows Phone 7?
Developing applications for Windows Phone means that the developer is now engaged with Microsoft and developing for their platform. When the developer releases their application why would they then limit themselves to only publishing for Ovi? It would make more sense to make the application available via Microsoft’s store and available to all Windows Phone platforms. The relationship with Nokia is now broken.
QT currently will not work on Windows Phone devices as Microsoft stipulates that all applications on this handset have to be written in managed code - aka C#. As a developer this means retooling and re-education. It also makes it harder to reinvest in other platforms, as to move to another handset basically means re-writing the software.
Therefore as developers move toward Windows Phone 7 from Nokia’s other platforms they become locked in a relationship with Microsoft. With no obvious upgrade path to keep them interested in MeeGo, why should they stay? - I propose that they won’t.
Most developers will move with the investment and immediate opportunities and right now, that means Windows Phone. With no immediate opportunity for MeeGo they will effectively become locked in a relationship with Microsoft. Without QT on Windows Phone there will be no common technology to reduce the burden of moving platform again and reducing the chances that they would return to MeeGo.
Where does this leave Nokia? - Making hardware for Windows Phone and competing against others doing the same. What difference now between Nokia Mobile Phones, and HTC?
Perhaps Mr Elop has plans for this already? - What is the way out for Nokia in the longer term?