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Nokia and Microsoft: Strange Bedfellows Get Co-Dependent

by Noah Kravitz | February 11, 2011February 11, 2011 10:30 am PDT

Despite the rumors, leaks and logic leading up to today’s NokiaMicrosoft partnership announcement, I still stood stunned in my kitchen when I read my RSS feed at a quarter to six this morning. Taking a sixty second “break” from getting myself out the door and on the road to Barcelona for Mobile World Congress, I scanned bullet points, sipped coffee, and stared at a photo of Microsoft CEO Steve Ballmer and newly installed Nokia CEO Stephen Elop. The deal to make MSFT’s Windows Phone 7 the software platform of choice for high-end Nokia smartphones from this day forward makes a ton of sense to my brain, but as I looked at the photo of Ballmer sharing the stage at a Nokia event, my heart had some issues fully grasping the reality of the situation.

Then again, I was awake, dressed, and reading the Web before six AM on a day that would begin near the Pacific Ocean in California and end near the Mediterranean (Balearic, even) Sea in Catalyuna, Spain, so nothing about today promised to be normal for me, anyway.

Nokia MicrosoftToday’s announcement was inevitable when viewed in hindsight. Nokia’s still a giant, but they’ve been in trouble basically since the first iPhone lit the world on fire a few years back. Exactly how and why Nokia’s failed to produce a decent, modern touchscreen smartphone since then remains a mystery to me, but that’s what’s happened. Or failed to happen. The list of disaster phones to come out of Espoo (the Finnish company’s hometown) spans operating systems, marketing ploys, hardware form factors, and one-off variants of a single ill-fated design: N97 and N97 mini (Symbian OS and Riffing on a Bad Design), N900 (Maemo OS), XpressMusic 5800 (Symbian OS + “Comes With Music”). That list is incomplete, but big enough for my purposes here. All of the offenders featured attempts to pretty up an aging pig with cheap lipstick that wasn’t quite the shade of red favored by the cool kids of the day. As another writer said, it’s like Nokia execs had a checklist of “Hip, Happenin’ Features” and so long as their new models matched up – Touchscreen? Check! Music Store? Check! Homescreen widgets? Check! – it didn’t matter that the software was basically unusable, let alone devoid of “cool” or, really, any emotional appeal at all to consumers outside of the company’s longtime faithful flock.

So what happens now? Well, in some ways both companies are winners here, or at least could be. But the picture is a bit rosier for Microsoft than it is for Nokia, at least just yet.

Microsoft is today’s clear winner. Windows Phone 7 is an interesting platform with a lot of potential but close to zero marketshare or mindshare. While it’ll take awhile for production of Nokia WinPhones to ramp up, Ballmer and Co. can look forward to a future where the world’s biggest producer of mobile hardware has bet the farm on shoehorning Microsoft software into their luxuriously crafted phones. Make no mistake, Nokia makes great hardware; they have for a long time. So while the HTCs, LGs and Samsungs of the world were busy pushing out a couple of WP7 devices for launch while really focusing their efforts on the now-huge Android market, Microsoft winds up with the longtime dominant force in the actual making of phones now making phones that run their Hail Mary-but-backed-by-XBox Live-and-Bing mobile software.

Also, Nokia Maps. Nokia Maps is a nice pickup for Microsoft, all the moreso because it looks like Nokia Maps will be integrated into Windows Phone 7 across the board. So we’ll see Samsung phones running Microsoft Windows Phone 7 featuring Nokia Maps. Crazy, huh?

Just this past Wednesday I was talking about how webOS has a real shot now that HP’s corporate muscle is behind it. Palm made some great technology, but they just didn’t have the resources to compete in today’s Apple-Google dominated marketplace. Today I’m singing the same tune, but to a slightly different beat. Windows Phone 7 is not the platform that webOS is, but the Microsoft-Nokia partnership is a union of two giants, where HP-Palm is more like a sugar daddy hooking up with a hot young thang with tons of upside, as the sports pundits like to say. Both mergers could be huge for the mobile industry, but they’re just so different. Honestly, it’s fascinating.

Nokia is a winner today, but they’re also a loser. A big loser. For them to admit what amounts to total defeat in the smartphone space has to be crushing to the folks who’ve been championing Symbian for years now. When I started covering smartphones, Nokia’s N-Series was battling Sony Ericsson’s high-end W and K phones for supremacy in the Cool category, while Windows Mobile and BlackBerry duked it out for the corporate/productivity set. Then came the N95, Nokia’s chunky brick of an absolute powerhouse “Multimedia Computer.” I’ll never forget seeing Howard Chui (founder of HowardForums.com) on TV the week the first iPhone came out. He was on a news program and the host said something like, “So I’m assuming you’ve already got an iPhone in your pocket, then, Howard?” And then he pulls an N95 out of his jacket. It was like, “No, see, the Johnny Come Latelys like you are all bedazzled by Apple, but the real phone geeks know N95 is still King.”

And it was. For about another month.

For Nokia to adopt anyone else’s platform to make their hardware signals not only that their massive financial and people-power efforts into Symbian and MeeGo have failed, but also that they’re willing to play the role of OEM. Nokia as an OEM, as a “mere hardware maker” is an incredible thing to chew on for anyone who’s been in the mobile business for more than the past three years. That’s not to say that Nokia won’t be innovating on top of WinPhone 7, continuing work on their own platform of the future, or otherwise engaging in R&D efforts outside of the Microsoft partnership. We still haven’t heard anything about a tablet computer from either company, which is both a huge elephant in the room and a window of opportunity for Nokia if they move quickly enough (yeah, right). But still, the big message out of London today is clear: Everything Nokia’s been doing in the smartphone space for the past several years has been a massive waste of time, money, and resources. Today we clean house. Today we shake up our executive leadership and begin massive layoffs across the global organization. And that Symbian thing we’ve long been pounding the pavement for? Forget it. Today, our future is with Microsoft.

Microsoft. Nokia’s future now rests in a joint venture with Microsoft. The company, once led by a Finnish man who bicycled to work everyday. has now turned to Ballmer, a brash, loud American executive known for his crazy, Howard Dean-esque screaming fits, and a flagship product fueled by twelve year olds cursing one another out over voice chat while they command video game battalions from their living room couches.

It makes perfect sense when you look at the recent history of the two businesses though I still can’t quite wrap my soul around this one. But, hey, an N8 quality device with stellar imaging and a solid thumbboard running Windows Phone 7 (or 8)? I’m pretty sure that’ll help me get over the culture shock.


Noah Kravitz

Noah Kravitz mourned the day that Star Castle was replaced in the pizza parlour he frequented as a kid. The sadness ended when he saw an older kid...

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