Saturday 12 February 2011

Why Microsoft and Nokia have a chance

Many iPhone and Android fans don't believe that Nokia and Microsoft have much chance to succeed. While everybody agrees that they wouldn't have a chance without good partners, few seem to agree that they can do much together. The most frequent explanation is that their level of innovation is too low, and their R&D doesn't really work.

Most people, however, don't care about the phone producer's level of innovation. Even Apple consumers don't - they just want something that works. Nokia has been quite good at this, and I still think that S40 is a great OS for a phone if you don't want it to do much else than call someone and write an sms on a device that has a great battery life.

Nokia S60 was a usability disaster, but as long as sales were strong, Nokia believed that they were doing the right thing. Now they know that they didn't. The main problems are navigating the menus and application availability. WP7 seems to solve the primary usability problem, quickly.

So, who are Nokia's customers now and in the future? They already most of the techies to Android and iPhone, and the remaining customers often don't even know whether their phone is running S40 or S60. The OS choice doesn't matter to them. What they see others do, and want, is online address book sync, and access to the most important apps, like Facebook and Angry Birds, and maybe a calendar sync.

In USA, the biggest providers of mail and online address book services, are Hotmail and Yahoo. In many other countries, Gmail also has a small part of the market, especially amongst those that don't use Android or iPhone. The big question is, who will deliver the best contact book sync for Hotmail and Yahoo mail? Microsoft and Nokia are in a very good position for that. Facebook and Angry Birds are also available to WP7 customers.

So, if a customer uses Hotmail, and really doesn't care about weird app markets, which phone is best? An Android phone that doesn't really work well with his or her online mail and contact list, or a Nokia WP7 phone that just works?

I think there is a huge market for a Nokia 5310 like device, with the same battery characteristics and form factor, that can do facebook, has threaded SMS and sync the address book with Hotmail. WP7 doesn't need to do all the neat stuff that Android can do, in order to become popular.

Don't get me wrong, I love my Android phone. But a Hotmail phone makes much more sense than a Facebook phone.


Dorin Duminica said...

Nokia realised that Symbian is a disaster, they needed to find a better OS for their hardware, Micorosft came out with WP7 which doesn't have too much attention due to the fact that iPhone's and Android wins more market share with each month.
Having that said, Nokie needs a OS, Microsoft needs hardware, now they needed to partner in order to win back some of the market share.
I'm pretty sure that this is a very good move for both companies, Nokia has it's customers, Microsoft has it's customers, there's NO reason why this would fail IMHO.
My only problem(as a Nokia and Microsoft customer) is that they might be making only touch phones(which I really hate, I love the QWERTY keyboard on my E63).

Ciprian Khlud said...

As an analogy is that Nokia have a huge legacy and is hard to them to make a full vertical solution as Apple does.
Symbian is great for low end devices but just for one year they mostly have decent Qt integration to make it somewhat bearable to develop to.
Another problem is that Qt is cool but at the end is just a toolkit. Ovi store was more important to be promoted and users to get great applications inside it. It did not happen and the huge range of hardware that a Qt application should run, make it very hard to target your software right.
With Android you know that you have 500MHz + ARM v7 CPU, you have both a vertical SDK to develop to, a big market, you can use C++ just if you want, so at large I think is that Nokia picked MS for market support, not (necessarily) for technological merits.

Unknown said...

Never count MS out as they have a lot of money and time, but they are so far behind and he hardware isn't going to help much as it is changing faster now than ever before. Google with its "free" services and Apple with its quality builds are true market monsters to overcome. What if DOS had to compete with free Linux when it was released? I doubt MS would be the giant they are today.

Eric said...

For Microsoft and WP7, it is undoubtedly a chance, but for Nokia? It could turn out to be a death blow if WP7 doesn't improve significantly and finally delivers.

I would have given more chances to Nokia if they had gone for Android, they would then have had a proven OS in addition to a brand name.

The current deal seems to favor Microsoft, they get a major brand, while Nokia doesn't gain much if anything as other brands can also sell WP7.
So even if Nokia+MS succeed, it could turn out into a WP7 success, which Samsung, LG, HTC, etc. would take advantage of too.

Lars D said...

Eric, good point - Nokia does not have much negotiation power in its software merits, but they do have it in other merits. On the other hand, neither Android or WP7 have proven themselves to be great on the Nokia N79 or 5310 form factors, where there still is a huge demand. With wp7, Nokia can be in the front seat developing that.

rjking58 said...

Hotmail? This is an absolute disaster! My daughter's account got hacked and cleaned out. Now we all get spammed. Microsoft's response - we can NOTHING. They will not even close the account. This partnership is doomed before it starts.

Jolyon Smith said...

I'm not sure where I fit in these laying out of who fit's where... I like the *idea* of an iPhone, but I find it's keyboard irritatingly unusable. The same goes for any of the touch screen phones for editing txt or emails.

I was delighted when Nokia came out with the X3-02 Touch'n'Type. It has a touch screen UI which is great for navigating menu's, taking/browsing photos etc and playing certain games, but it also has a "traditional" 0-9 predictive txt physical keypad.

I don't email from my phone, just as I don't make phone calls from my PC.

Apple and MS don't have anything that fits me. Tho they both have products that *appeal* to me, none of them have anything that work well enough to secure a sale (I chuckle when I see people using their beloved iPhones - they seem oblivious to their own frustration that seems painfully obvious to me, watching them).

The X3 fits me perfectly.

As a PS, I do now also find myself increasingly interested in the Palm Pre, coming off the back of interest in the HP TouchPad.

Interesting times in the mobile space I think.

Lars D said...

That's another important point: Few companies have a high market share in so many countries as Nokia. Samsung just reentered our market, but PalmPre, Blackberry, WP7 and Motorola are unknown brands here. Reasons include localization, history, size, regulations and tradition, and every market is different.

Android users still frequently make the mistake to demonstrate English language apps to people that want a phone that is 100% localized.

Eric said...

Lars - "With wp7, Nokia can be in the front seat developing that."

I doubt that, MS is keeping WP7 under tight control from the UI down to the hardware specs. It is much more likely Nokia will be losing its identity and become just another hardware manufacturer. Alas, Nokia not only fell behind on software, but in hardware innovation too (that's an area where Apple, Samsung or HTC are in the lead)

Lars D said...

As far as I understand the deal, Microsoft wants Nokia to drive WP7 adoption into more form factors.