Nokia + Microsoft: An Analysis of the Strategic Alliance

I’ve posted a lengthy examination of the Nokia Windows Phone announcement on the SuperSite for Windows that should be of interest. My conclusion works out to:

This is a win for Microsoft and its new smart phone platform. It picks up a major new collaborative partner, the first (among hardware partners) that will not be competing with Microsoft on the side with Android products. Nokia will contribute software and services to the Windows Phone platform, and dramatically expand the reach of this platform worldwide. This is nothing but a good thing.

Will this change the competitive matrix much with regards to Android and iPhone? Perhaps, perhaps not. But like Elop, I take umbrage at Google VP Vic Gundrota’s “two turkeys” comment. Windows Phone is the most innovative smart phone platform on earth. Hopefully adding Nokia to the mix will only make it better. My guess is that it will.

In short, I remain excited about the future but realistic about the challenges. But I like what I see here.

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19 Responses to Nokia + Microsoft: An Analysis of the Strategic Alliance

  1. gcianc says:

    Paul, can you stop whining & hating now? ;-)

  2. Bill says:

    Agree Paul, but I have a concern about Nokia being given exclusive rights to modify WP7 as they see fit. Although there has been much written indicating that they may not exercise this right, is this more of the unfilled promise from MS that they are going to control the OS and subsequent updates? As you point out, the current WP7 update is being held hostage by the carriers and my concern is this will only get worse rather than better.

    • Paul Thurrott says:

      I can’t imagine they can change WP as they see fit. It’s just that they will collaborate. Microsoft will always have final say over what goes in its OS, of course.

  3. misterbigwords says:

    I’m fairly excited about this too, but…did Microsoft just infiltrate Nokia here? And is this ‘soft’ merger the closest we can get to Microsoft producing their own phones?

  4. johnwbaxter says:

    I have seen a suggestion, for which I regret not having a citation but I thought the writer was credible, that Nokia’s carrier relationships may well help fill in the holes in the feature vs country matrix. That would be welcome, even though I’m in the US.

  5. archieseb says:

    I was so happy that they annonced this partnership. I only hope that it will create the “domino” effect: more customers, more developers, more apps, etc…

    Maybe the famous first update was delayed because they were negociating and trying some prototypes with Nokia! We gonna find out this week.

  6. Mike Clark says:

    I’ve gotten enormously tired of the same old negativities about Microsoft that the same old tired pundits utter every time they turn around. I see in this Nokia partnership a grand possibility, which I hope Microsoft will not screw up. Arrgghh, I am disappointed that it is going to take a year to see any real Nokia WP7 phones (might be WP8 by that time, of course). I suppose that these things must take time to do right. So be it.

  7. alimaggs says:

    I’m excited about this. I’m in the UK where Nokia still is a major player… They’re huge. Perhaps not for the tech-savvy, but for the market that Microsoft was going after – those moving from “dumbphones” – they’re a huge deal… For those that don’t care about the OS, Nokia is a good brand and a good choice and a lot of “regular people” seem to go for them… Probably a lot of people have Nokia smartphones without even realising they have smartphones.

    Also, importantly (as I haven’t seen any advertising for Windows Phone since December), Nokia advertises their smart phones EVERYWHERE – magazines, billboards, newspapers…

    Anyway, great article. Only thing I’d point out would be your analysis of the Zune situation. I doubt they’ll phase out Zune as a platform (although I doubt they’ll be any more dedicated players), they seem to be doing well in the Xbox space these days with the marketplace etc. and I’m sure the phone stuff will take off as more people buy phones.

    I’d imagine the lack of Zune talk was probably due to the fact that it’s just not a recognisable brand in Europe (in the UK, it’s starting to be, thanks mostly to Xbox, but in the rest of Europe you’re looking at a serious lack of features with both Zune Pass, movie rentals, movie purchasing, no television content at all – probably not something they’d want to highlight right now as in most of Europe Zune means nothing).

    Also, Nokia has a competing service over in Europe. There’s an Ovi music store and a “comes with music” brand that they still seem to be figuring out what to do with… Wouldn’t be surprised, actually, if Microsoft uses Nokia’s licensing agreements with some of the European countries to get Zune’s services to those countries… Seems possible, maybe even likely, as Nokia already has a subscription-like service running. It’s not exactly popular (I think they’ve killed the Comes With Music stuff in many countries over the last two months) but, hey, there’s licensing agreements, which Zune hasn’t yet been able to make…. This thing could even be good for Zune, or do you think I’m being too optimistic?

  8. cpdjoe says:

    So Paul, r u saying ur source is telling u the update is done ready for users but the carriers r blocking it? I thought the carrier would only b able to block for one billing cycle? That is bs if true

    • Paul Thurrott says:

      Yes.

      There’s only been one update, so that update cycle hasn’t ended yet. But in this case, of course, Microsoft wants the first update to go out to everyone simultaneously. Imagine the uproar if only some users got it.

      • roberthleeii says:

        like an android update :)

      • alimaggs says:

        I really, *really* don’t understand what the hold up is and why carriers are involved *at all*… Am I right in thinking that when this gets approved and is released the whole thing is going to be distributed via broadband/wifi through the Zune software anyway, and not even through the phone networks…? If that’s the case, why are the carriers needing to approve anything? What am I missing?

      • daimenh says:

        So if this has been blocked by the carriers, and MS have another update ready, say, in June can they just release it and force the carriers to take it? Not sure I understand how the whole “they can delay one upgrade” thing works.

        I agree with your calls for transparency, too. It wouldn’t hurt to let us know which carrier(s) were holding things up either.

  9. roberthleeii says:

    i think this is the best thing that could happenfor wp’s future. the only thing that scares me is zune disappearing. i enjoy using zune software/devices so much more than itunes/ipods. i still have to use itunes because zune is missing what some important features(at least for me) and hate it each time

  10. irdawood says:

    Paul, you mention many a time that the carriers are blocking the update for WP7, however why would they do this? and what purpose would it have? Testing… I understand, but surely this first update is small, with a small number of handsets why the lag?

  11. kabukin0 says:

    A few important things :

    – In the nokrosoft deal, Nokia was paid by Microsoft. Probably to embed intellectual property owned by Nokia into Windows Phone 7. That can’t be bad. Nokia N8 might be a turkey, but it’s gonna build some muscle.

    – Both nokrosoft companies have a history of not ONLY doing ecosystem-thinking for developers and users, but thinking on the industrial aspect; ecosystem of corporate-business globally. Facebook, and Now Nokia is a good example of how Microsoft does business. The only notable deal by any of the other two horses, is the publishing deal in the US between Apple and murrrdochhh. Publishers worldwide are not happy with Apple interferring with their pricing and contracts. Another Microsoft example of corporate-ecosystems, will probably be Bing, the commerce-centric search engine.

    – Nokia, unlike Google or Apple, are present on the infrastructure side of building wireless data networks. They are weaved together with operators everywhere through Nokia-Siemens. I wouldn’t be surprised to see future innovation on the infrastructure side from an ecosystem aspect. If Nokrosoft wanted to play like apple, non-standardized, non-open WP7-specific technology could find it’s way into the operator world.

    – My guess is that publishers, developers and so on, are not happy about Apple interfeering with their pricing, contracts, content and so on. For Android, they aren’t happy with the total openness that exsists.

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