Note: Michael Mace has an excellent article at Mobile Opportunity, which I highly recommend you read. It is insightful and full of valid and well-reasoned observations covering platforms, Android licensees, HP, mobile operators and of course Nokia. I agree with him and therefore I will not repeat the same things here. I have also already covered some of the same key points in my previous articles.
Feelings, feelings, feelings, nothing but these funny, funny feelings
A lot has already been said about the Nokia-Microsoft partnership. Microsoft is taking over Nokia, Nokia is finished, this is the beginning of the end for Nokia, Elop is actually a Trojan horse, with his belly full of Microsoft executives ready for acquisition and then there is (was) the infamous Plan-B initiative. The stories go on and on but do they have any truth in them? It is really hard to say at this point, but if we analyse this rationally by leaving emotions aside, we see that after storm comes calm.
AllAboutSymbian wrote that Michael Mace, CEO of Cera Technology and former VP at Palm, has nailed the situation. I totally agree!
Although Europe is really a collection of nations rather than a single place, there are a few things that seem to tug on heartstrings across many European countries. The Eurovision song contest is one, Airbus is another, and Nokia is a third. It represents European style and marketing prowess, and it proves that people in Europe can lead a high-tech industry. So the deal with Microsoft represents far more than a business deal; it feels like a betrayal of a European jewel at the hands of a rapacious American company.
That’s what this whole circus and outcry is fundamentally all about – feelings! Everyone has heard the saying “it’s nothing personal, it’s just business.” Might sound a bit harsh but in reality it’s in many ways the name of the game. Business is ultimately a constant fight for survival. Nokia has nearly 150 years of history to protect. Maybe partnering with Microsoft isn’t the most ideal thing to do, but at this point of time in Nokia’s long and impressive history it was the only reasonable thing to do. This strategic change will hopefully keep Nokia alive for the next decade – until the next ‘eruption’. And that is what this strategic change was first and for most about, to keep Nokia profitable, competitive, relevant and alive. Investors don’t seem too happy with this change, but how happy would they be if Nokia went bust?
I think Elop is right on the “war of ecosystems”. Nokia’s main rival isn’t anymore Samsung it’s Google. I’ve been saying this for years and I know Nokia has known this for even longer. They tried to fight Android by forming the Symbian Foundation, but it failed miserably. Say what you will, but Symbian never stood a change against Android. I’m not saying that Symbian is bad per se. Nokia just wasn’t strong enough, especially on the software side, to create a valid ecosystem around it. I think it was Steve Ballmer who said, “Android is like a black whole, sucking innovation.” Next it would have sucked Symbian, and partly it already has.
I don’t quite understand why some analysts think that Symbian is dead or that no-one would by one now when WP7 strategy has been announced. I don’t believe this to bee the case, at all. Ironically, Symbian’s future has never seemed brighter. Nokia has said that they will keep investing in Symbian. New Symbian UI is been worked on, Qt is just as excellent today as it was before the announcement and Ovi Store is finally starting to take off. Consumers will not change their buying habits overnight. In general, consumers are not buying Android, iOS, BlackBerry OS, Symbian etc. They are buying ‘something’ in order to satisfy an aroused need. If consumer had a preference towards Nokia phones before the WP7 announcement, they most likely also have it after the announcement. Consumers aren’t just mysteriously going to change their behaviour or preference all of a sudden. In general, consumers are buying Nokia not Symbian and they will keep doing so as long as those products are available, marketed and offer enough features to satisfy their current needs. The assumption that end users are stupid because they are buying something that is essentially a dead platform is therefore not true. Actually it is missing the point – end users (the mass) don’t care. Never underestimate the power of a strong brand.
From what I can gather, it seems that there are many misinterpretation and misunderstandings flying around. For some reason MeeGo is seen as some kind of a saviour. Although at this point I think it is evident that MeeGo is not ready. Nokia cannot build its entire future on something as rickety as MeeGo. Sorry to say but that is just how it is. Relying on Microsoft is risky for sure, but not half as risky as relying on MeeGo. I think the entire discussion and speculation about MeeGo is utterly pointless as long as it hasn’t even been released. At the moment Nokia’s MeeGo is nothing more than a vision of something different.
Android was never a viable option for Nokia. Google can do just fine without Nokia. Actually the Android ecosystem is most likely better off without Nokia. Nokia is a mammoth and would have, rightfully so, required special treatment. We don’t know whether Google would have complied with this or not. But what is sure is that Microsoft has to. Nokia has much more value for Microsoft who now relies solely on Nokia for its mobile future. Going with Microsoft gives Nokia the luxury to influence and dictate the partnership. Something that Google most likely was not willing to give. And then there are the services. Ovi Maps is the product of an $8 billion investment, which Nokia isn’t just going to throw away. Android comes with Google Maps. According to news Nokia plead for permission to substitute Google Maps in order to ship possible Nokia Android devices with Ovi Maps – Google declined.
In his excellent article Michael Mace writes,
I think it’s impossible to say today what impact the Nokia-Microsoft alliance will have, because we don’t know how well Nokia will execute. If Nokia executes poorly, there won’t be any change at all — both Microsoft and Nokia will continue to gradually decline in mobile. If Nokia executes well, I think the impact could be pretty big. Not asteroid-killing-dinosaurs big, but a very large meteorite, with effects felt worldwide.
I think this is well said and pretty much sums it up. Partnership with Microsoft by itself does not guarantee anything. But it does give Nokia a chance.
Update 17.2.2010: Helsingin Sanomat (leading newspaper in Finland) had an online questionnaire where they asked: “Would Google have been a better ally for Nokia than Microsoft?” Out of 10,535 answerer 59% answered yes and 41% no. There are no financial justifications that would support this argument, so I assume this result isn’t based on anything else than personal feelings. Interesting result nonetheless that also support my arguments in this article.
There are 5 comments on this post
On emotions – I’m still trying to calm down after reading Michael Elgan’s comment: “Silicon Valley is now the centre of the cellphone world.”
Hi Ville, I fully agree to your views that consumers do not buy an OS.. they buy a Nokia N90, or Samsung Galaxy etc. I have android in 4 different devices but I prefer one particular model over others and I just love it!
While more often its love for Nokia thats resulting in the feelings and emotions (specially among Fins) you’re speaking about. I have begun to feel that Nokia has got bad publicity from its own fanclub than from its criticizers; may be Google/Apple/Samsung etc are more concerned about how to compete effectively against the first Nokia WP7 model!!!
Going by the reviews (top online gadget reviewers) etc, I think the success depends on 1) how fast Nokia is able to bring forth their WP7 model and second, how quickly Nokia-MS is able to bring the Nokia-developers onboard to WP7 ecosystem. I am surely waiting for their first model. At the end, the best business model succeeds and their’s no emotions about it. :-) As a consumers, I am thrilled and just looking forward for my next Nokia WP7!!!
Thanks for sharing your thoughts! I fully agree with you. Ultimately this strategy depends on Nokia’s ability to execute. I think Nokia should have their first WP7 phone out before the summer (think iPhone 5) and a bunch of devices, including at least one at a lower price point, for Christmas.
You bring up some good points about feelings, and more important than anything you state that only enthusiasts feel this strongly about this issue. Your average Joe might not even notice, or simply become intrigued once he realises Nokia phones have changed (to WP7).
What I’m most interested in finding out is, why exactly is “MeeGo too slow” when the Nokia MeeGo device is probably going to beat any WP7 device of Nokia’s to the market. Also, it will be interesting to see how things with MeeGo develop, as Nokia’s previously closed-source parts of their Linux operating systems are becoming o-s as MeeGo adopts them. I think there’s a real chance that MeeGo will be a big player anyway in the pocket computers world, the devices just might not be of Nokia’s hardware.
As a Finn the most upsetting thing about the ‘Microkia pact’ is the loss of jobs in Finland, and that’s why I’m having a hard time staying totally neutral about any developments in this. But its like you said, ‘business is business’, something we enthusiasts (by definition) cannot comprehend. ;)
Thank you for your comment! It’s comments like yours that really bring this site alive!
I have a feeling that we’ll hear about MeeGo in the future. Windows Phone will first and foremost replace Symbian.