Am I the only one who is cautiously optimistic about the Nokia – MSFT deal?

Much has been said about the Nokia – MSFT deal now that we know its for real

But the strategy could work if the combined entity managed to orchestrate a segment of the ecosystem

Here is a question:

If you were a Nokia user, when did you switch away from Nokia and why?

I was a Nokia user .. from 1998 until about 2006 when I switched to Blackberry and then later to a second Android phone in addition to Blackberry


There was nothing wrong with Nokia. It was simply that there was much more choice and my needs were very specific

I discussed this yesterday when I said: Nokia’s problems and INQ facebook phone on android

That probably sums up the issue for Nokia ..

Another way to put it is: What is the key differentiator for the customer?

Is it OS(symbian)
Is it the browser?
Is it content?
Is it look and feel?
Is it apps?

It could be all or none of the above

But these responses are very simplistic

You could answer this in two ways:

Either customers buy a SPECIFIC device to solve a problem(ex I use BB for business)


They buy a GENERIC device to solve many problems.

This explains my own choice in getting a Blackberry and the Android since it helps to use Skype, Chat etc etc.

Most people will subconsciously follow this argument in one way or the other.

This means, the market leader will not be the one with the largest number of devices, but rather the one who the customers choose on the above analysis

By that reckoning, Nokia basically fell somewhere in the middle and stood for nothing.

By that I mean, if you liked content you got an iPhone.

If you liked business communications, you got a Blackberry.

If you wanted an Open mobile phone, you got an Android device.

There was no real compelling reason to buy Nokia

So, how to be a market leader?

Number of devices, OS, browsers and many specific hardware features are a red herring.

To be a market leader, you would have to unify and orchestrate the ecosystem around your product

Apple unified three elements of the ecosystem:
Customers(vastly superior product),
Operators(differentiation) and
third party developers(appstore)

Google also unified three seperate elements of the ecosystem
Customers(open device),
handset vendors(including new handset vendors like Dell) and
Operators(who did not have the iPhone)

Now, which elements of the ecosystem can the combined Nokia – MSFT offering orchestrate?

There is the next generation home (where MSFT has leverage), You could have the business ecosystem. Or even an emerging market ecosystem

The point is – it has to be SOME ecosystem which the customer values AND the Nokia/MSFT products are dominant

My bet would be the home content ecosystem but that needs more thought.

Thus, I am cautiously optimistic although I can understand the short term pain especially in the developer community

So, this was the EASY bit .. BUT it was necessary

The HARD work comes now .. in painting the vision and getting the backing of the customers, Operators and the developers

We know the vision is not based on Symbian, Qt, Meego.

In that sense, there is a golden lining for today because developers know what not to do (and this benefits Android and the iPhone ofcourse in the short term)

But the qs is: Is there space for a third ecosystem (after iPhone and Android)

I think so

How that ecosystem shapes up, and more specifically, which segment it dominates, is the real question

Comments welcome.

If you at MWC, I am speaking see below for my speaking schedule

Mobile world congress – my talks and schedule next week ..

Image source komonews


  1. You are not the only one. I just blogged about this… :-(

  2. I think there are two things: does Nokia+MS package make sense for users. I think it can make sense. They have a lot of work to do, but it is possible. Another thing, how this work for Nokia and its shareholders. This limits Nokia’s options a lot and they can become a hw vendor, and MS can dominate the relationship, but maybe it was the only option for them. I think the biggest question, how to get a cooperation of two big (with their own history) ones to work. Nokia kept the most of the old management team and still plan to do something with MeeGo too. Those things confuse me. For example, Microsoft’s Nokia acquisition would have been very clear solution; or totally new management and structure for Nokia. But now they must manage a complex power balance, several interests and two separate organizations. I think it is the challenge although MS+Nokia as an ecosystem and offering can make a lot of sense.

  3. ajit says:

    Thanks CEO. will link to your post! kind rgds Ajit

  4. ajit says:

    thanks Jouko. yes many challenges ahead. I hope we will know more as we go along. look fwd to meeting you kind rgds Ajiy

  5. Dean Bubley says:

    No, I’m cautiously positive too.

    (FYI, I was at the event both for this morning’s press conference with Ballmer & the afternoon detailed strategy & financial event with Elop and the Nokia CFO)

    Devil is in the detail, obviously, but there’s some good stuff in there.

    1) XBox means Kinect (HOT!) + Nokia imaging

    2) While LG might get irritated by this, about 300 shanzhai firms in China just got the green light to start churning out cheapo WP7 phones, because they know there’s going to be a market, plus also maybe biggies like ZTE and Huawei. But it’s the little guys that Elop was referring to when he said “Shenzhen ecosystem”

    3) Nokia *finally* gets an easy route to using Qualcomm Snapdragon, plus maybe a bunch of other QCom cleverness on the radio side (Gobi for CDMA+HSPA maybe?)

    4) With all due respect to Intel, building a Meego mobile app ecosystem was indeed going to take forever. I can see Meego being revisited for other applications (eg the Telecom Italia Cubovision IPTV set-top box)

    5) As a modern OS, WP7 is presumably intended to make life easy for hardware OEMs. If a Taiwanese ODM can rock up in Seattle tomorrow and say “Hey, I want to make a phone on your platform”, they’d probably say there’s a chance of a 6-12 month turnaround if they use standard(ish) hardware. Let’s see if Nokia can do the same. Hell, it could even get an ODM to do it & then re-badge it with a thin Nokia-ised software layer on top.

    6) In general I was very impressed with Elop’s apparent obsession with SPEED. Look at the way that Android quickly revs its OS. Apple is content to play the perfectionist & be slower, but lets face it in recent years Nokia has been both slow and imperfect. It’s probably easier to fix “slow” than “imperfect”.

    7) This just drove another nail in the coffin of some of the sillier GSMA / 3GPP ideas like IMS RCS & stops Nokia wasting time on them to please the operators, even though they know it’ll ultimately fail. Microsoft is neither knowledgeable nor positive towards IMS, because of its own IM and VoIP platforms.


  6. As far as big moves from new CEOs, this one is better than most. Windows Phone doesn’t suck. the technology is coherent and mature enough to be viable. XNA gaming is in a unique position of strength.

    WP is Android-like, having been inspired by Android’s ancestor. Speaking of Danger, it’s amazing that Microsoft was able to create Windows Phone after having driven Danger into the ground (Microsoft isn’t necessarily the right company to look to when looking for a model to avoid infighting).

    But, there is a huge pile of risk in Windows Phone, too: Windows CE is not competitive with Linux. Silverlight is not as good a mobile solution as the Android app runtime, which is highly optimized and refined. Windows Phone just barely made it into the market before it was too little, too late, and might still succumb to time wasted on screwing up Danger. Even the advantages of XNA might not stand up to the wave of mass-market mobile games.

    Microsoft is a BIG winner in this deal. Nokia’s benefits are all future potential, and the deal dilutes Nokia’s status as a platform-maker.

    Nokia should have spread the risk: Put Qt on WP, put Silverlight and XNA on Meego. It’s almost as if Microsoft made some demands that Nokia not hedge their bet on WP.

    Ideally, Nokia should have bought Palm.

  7. Ajit says:

    thanks Zig. Great analysis as usual!