Some drastic change of direction is about to take place in Nokia’s smartphone strategy. We can predict this because Nokia has shut down the Symbian Foundation. What we can’t tell yet is what direction they’ll jump, and there are at least four somewhat plausible scenarios. I’m going to list them in what I think are roughly decreasing order of probability and then explain my reasoning.
Case Android: Nokia takes up Android.
Case MeeGo: Nokia implements MeeGo across its whole product line.
Case Windows: The Microsoft alumnus now running the company brings in Windows Phone 7.
Case Unsymbian: Nokia tries to build a next-generation smartphone OS in-house based on the closed codebase it acquired along with Symbian, Inc..
Given that HP is holding WebOS pretty close to its chest and Blackberry actively doesn’t want any other hardware vendor running its software stack, I think that pretty much exhausts the possibilities. Now let’s try to figure odds.
Case Unsymbian seems the least likely to me on time-to-market grounds. We’d be looking at a multi-year development effort, and Nokia hasn’t got time for that with Android breathing down its neck. People who think this case is even possible are forgetting the reason Nokia booted up the Symbian foundation in the first place – they did a cost analysis and concluded they couldn’t afford the engineering hours needed to port Symbian to all the hardware they needed to support. (I had this straight from a Symbian executive, face-to-face, around 2002.)
Nokia’s management has been veering from blunder to blunder recently, so it’s just possible they’ve forgotten what they once understood about the economics. But the development-cost problem hemming in their strategic choices has only become crueller in the last eight years as product cycles have shortened. If they bet the company on Case Unsymbian, what you’ll see is mighty thrashing for a year or two followed by collapse.
Case Windows is a currently popular conspiracy theory. According to this one, ex-Microsoftie Stephen Elop will push the company he now runs into adopting Windows Phone 7, offering Nokia a plausible way out of its software problem and handing his true dark masters at Microsoft a huge chunk of market share into the bargain.
The trouble with this theory is that it wouldn’t actually solve any business problem at all – not for Nokia, anyway. WP7 would incur the same porting costs as Unsymbian, with the added negative that at the end of the day Microsoft and not Symbian would control the codebase. I can’t imagine Nokia’s big shareholders tolerating this for a Helsinki minute — not when early indications are that Microsoft WP7 will make only about about 2% market share this season. Once again, time is the problem; Android is eating Nokia’s lunch so fast that they can’t afford to wait long enough for WP7 to become an actual consumer draw, assuming it ever does.
But every report I’ve seen says WP7 stinks like a dead mackerel; there’s simply nothing there that can compete with Android. If Elop somehow succeeds in ramming it into Nokia on a wish and a promise, I expect that both he and WP7 will be outta there within a year. (But that would probably be long enough to leave Nokia circling the drain anyway.)
Case MeeGo actually seems the most plausible to me right now, under the assumption that Nokia management hasn’t gone utterly brain-dead. They need a state-of the art smartphone OS, they need to be able to co-opt more developers and porting engineers than they can afford to hire, and they want something that’s not Android in order to maintain some product differentiation. Process of elimination…and after all, MeeGo is partly descended from the Nokia Maemo codebase.
Notwithstanding the above argument, I think Case Android is still pretty likely. As I’ve pointed out a couple of times in a couple of ways, time-to-market pressure has to be the most serious one Nokia is feeling. At present rates of Android uptake worldwide, Nokia certainly doesn’t have a year to assemble a viable alternative; they probably don’t have six months, and may not have even three.
Then there’s this: Case MeeGo involves more NRE than Case Android would; the MeeGo codebase is simply not as mature. Even if Nokia decides it can afford the longer time to market, that would be handing HTC and the other Taiwanese handset makers a cost advantage that would prove decisive. Nokia’s past as a manufacturer emphasizing volume and low cost is a problem here; the Taiwanese armed with Android can probably beat it at that game, and Nokia doesn’t really know how to play any other.
I’ll wrap up by observing that Nokia’s long-term prognosis seems poor to me under any of these scenarios, including Case Android. The business model that mode them #1 worldwide in the dumb-phone era has broken, and I do not see a plausible path for them back to the top of the heap. The handset future belongs to HTC and its shadowy kin and competitors on the Chinese mainland; in that future, Nokia is at best an also-ran with shrinking profit margins.
Nokia will go Meego (unlikely) or what you’re calling “unsymbian” (more likely), NOKIA has never played well with others, and I can’t see them picking up MS, or Android, because it’s just not “NOKIA”. FWIW that mentality has been behind NOKIA’s 5 year slide to obscurity in the cellphone market as Samsung, Sanyo and a dozen others have embraced more open software.
As you note, this will be the effective end of NOKIA.
Eric, not even a link?
Really?
I think you’re forgetting that:
a) Microsoft would probably do the port for Nokia and,
b) Microsoft would probably hand Nokia a TON of cash (for the market share gain, you understand?), and
c) Oracle is currently suing Google’s ass of over their misappropriation of Java in Android. Even if they don’t win (unlikely), Android is now stained, and the big companies won’t go near it until the lawsuit(s) are decided.
>a) Microsoft would probably do the port for Nokia
Um, “the” port? You’re missing the scale of the problem. Nokia fields over two hundred handset variants.
>b) Microsoft would probably hand Nokia a TON of cash (for the market share gain, you understand?)
This just doesn’t hold water. First, Nokia’s planners have to know their real strategic problem is that Android is still making 600% quarter-over-quarter share gains, and that problem can’t be solved by cash – it’s not going to be helpful enough to have cash in the bank if they have no share in six months. And second, buying market share doesn’t even make sense for Microsoft here. They couldn’t justify it unless they’d buying future monopoly rents that would be bigger than the discounted net present value of the payoff. The problem with that theory is the Taiwanese; there is simply no plausible scenario under which HTC is going to back off or knuckle under.
>c) Oracle is currently suing Google’s ass of over their misappropriation of Java in Android.
And good luck finding anyone who thinks that lawsuit matters more than a fart in a windstorm. If “big companies won’t go near it” were true, the comparative market-share figures would look quite different than they do.
I can’t see Nokia abandoning MeeGo so soon after launching the effort. Why shift course that fast? Especially to become an also-ran, following the herd?
I do see a blended strategy as possible: Android at the lower end, MeeGo at the higher. That would let them claim the high end as being smarter than the average smartphone.
The only people I see claiming WM7 as possible are the Groklaw groupthinkers and other rabid Stallmanites. At some point, the rest of the world will learn to filter out their bias.
>I do see a blended strategy as possible: Android at the lower end, MeeGo at the higher.
That’s not implausible, I guess. But it’s unstable in the direction of more Android, unless the high-end MeeGo products genuinely offer a great deal more value. That’s not an easy situation to imagine, especially since more or less by definition they’ll be cut off from the Android app market.
http://www.bloomberg.com/news/2010-11-10/nokia-s-market-share-slips-below-30-as-smaller-vendors-grow-gartner-says.html
Nokia might be losing share, but I wouldn’t call the company in terminal trouble yet. Symbian was _still_ outselling android worldwide in q3 2010. Might be strong incentive to keep symbian around.
Given that Nokia sells about as many phones as the Samsung, LG and Apple combined, I don’t see why they couldn’t go for a multiple OS strategy. The only major phone manufacturer sticking to a single OS is Apple…
Eric, last line typo, furture=future.
> they want something that’s not Android in
> order to maintain some product differentiation
Is it still possible to differentiate based on the phone’s OS? I mean, Apple’s iOS has had a good-enough interface for years, and I imagine to compete you are either as good as iOS or you are dead.
@techtech: you could have the same iPhone hardware, and if you made android run on it it wouldn’t be the same at all– only cuter than other models. So product differentiation only by OS is not only possible, but very plausible. They could even launch with Android while they port Symbian… but never mind me, I’m not really savvy.
OTOH, they’ll have the entire range of Linux apps to start from. They can spin that as “our smartphones are so smart they run a real computer OS, not some cut-down hack”. It’s not a small hill to climb, but I just don’t see Nokia quietly joining the thundering herd.
@techtech “as good as iOS” could still be very different in look-and-feel terms, though. That seems to be what Windows Phone 7 is aiming at (how well it has succeeded remains to be seen, but it’s certainly different). If there are genuinely different phone OSes (and with a small and varied form factor and large differences in usage, that would be the expectation) then you could get a diverse market rather than a near-monopoly Android market.
Some thoughts on market-segmentation: Blackberry is the email-orientated phone, and I think it will survive in that market, as it’s still really good at composing emails with a physical keyboard. You won’t get them out of lawyers’ hands for a long time.
Android is likely to be the general-purpose winner.
iOS is media-consumption: books/music/films/TV.
WP7 is aiming at the social-networking user, ie teens and college students. That’s a terrible fit with the Microsoft brand (which is very enterprisey these days) but is an underserved niche. I think it fails, but I can see what they are trying to achieve.
I don’t know what MeeGo will aim at, but there are niches out there – they could go for a picture/video orientated phone; Nokia used to make better cameras than anyone else, for instance.
If MeeGo really gets going, and the MeeGo and Android designs turn out to both make sense (as alternatives, not a premium/cheap), then, with them both based on a Linux core, it’s possible that phones could be switched from one to the other by a flash. That would be a pretty strong bit of marketing by Nokia if they could pull it off – sell the phones with MeeGo on and let users flash to Android if they want. If MeeGo’s good, then people will want to try it out, but they have Android as an insurance policy if they don’t like it.
> if you made android run on it it wouldn’t be the same at all
Not the same but still “good enough”. What I’m asking is, with a large chunk of the smartphone software market (iOS+Android) already at a good enough level of functionality, I’m wondering how much room there is to innovate in the OS.
esr> […] especially since more or less by definition they’ll be cut off from the Android app market.
Errr, parden my ignorance here, but I wonder, since Meego is also Linux based, how hard would it be to port the Android app engine/interface? It would mean a bigger flash memory, and maybe an extra 15-20 seconds start time, but it would give them “Android+”, putting them at the front of the pack (and if you’re not the lead dog, the view never changes ;^).
This seems like something that’s doable, and probably without TOO much effort (almost definitely less than Unsymbian, and probably less than climbing the mountain of making Meego a true competitor to iOS and Android). The Meego native apps would still be faster (running in binary and not under the JVM) and that would be the differentiator between them and other Android phones.
Just an idea, and probably not a great one.
>OTOH, they’ll have the entire range of Linux apps to start from. They can spin that as “our smartphones are so smart
>they run a real computer OS, not some cut-down hack”. It’s not a small hill to climb, but I just don’t see Nokia quietly joining the thundering herd.
For that matter, and forgive me for not being up to speed on the restrictions on the android apps, but if Nokia produces a phone that’s running a “real” OS, can’t they make some sort of runtime / emulator (a la Classic or Rosetta in OS X) which would allow them to run the android applications as well? Certainly power consumption could be a concern, but how much so?
Competing with the Chinese on high volume low-cost seems a bad idea that will be difficult to sell to board+shareholders. Any way out will have to involve either moving production to China and sell on brand-name or get into some higher margin gear.
If I were planning for something to get out of the door in 6 months (and it will show why no one should listen to me) is to leapfrog into a product-line with dockable phones and tablets. The Brave-New-World Eric markets where you dock your phone into a tablet or screen&keyboard and use it as your sole computer.
If you can assemble the electronics at the right price, a full blown Linux like MeeGo would be an advantage over Android. With Ubuntu going towards a tablet UI that could be “usable” on a phone, you even get the developers.
I think that the first one to get a useful dockable phone at a reasonable price will strike it big.
Now when will we see that 64 bit ARM with integrated floating point?
I don’t thinknit beyond the pale for MSFT to throw down a $5-$10B “investment” to convince Nokia to use WM7, and the carriers to carry such phones at, er, “attractive” prices (e.g. $99 with a N year contract).
100M WM7 phones would tip things a LOT, especially if they were all branded Nokia.
As a reminder, this is around 1-2 quarters of profit for Microsoft, and they could pay it in over the two years of the contract.
Microsoft and Nokia both need to go big, or got home.
I think Eric can’t stand the thought that Microsoft could easily trip up android. This is why he denies its possible.
I’ve been doing Maemo hacking for a while now, and am more than convinced that the ‘big push’ will be for MeeGo. The whole Nokia mindset has moved towards a view of mobile devices as massively distributed pocketable computers – that just happen to be capable of making a ‘phone call’…the nature of which is surely destined to change to “yet another VOIP app”
The adoption of Qt as the UI layer bridges the mobile/*top/*book divide very well…at least, I have no problems writing apps that span these platforms with ease. The underlying code is portable linux C/C++, with a Qt ‘skin’ that can be fully-featured (on a desktop with large screen) or scaled down to be more optimal (‘finger friendly’ etc) for use on a mobile device.
Having said this, I am also looking into becoming an Android-geek….the platform interests me too much to ignore forever ;)
Nokia won’t do Android, b/c “stock” Android isn’t good enough, and it’d be a substantial effort to port or rewrite Nokia’s existing PDA/media/etc. apps to Android. MeeGo is by design an easy platform for Nokia to port its apps to, and so net-net the resources a switch to Android would require will be better used bringing MeeGo up to speed for Nokia’s purposes sooner.
If I were planning for something to get out of the door in 6 months (and it will show why no one should listen to me) is to leapfrog into a product-line with dockable phones and tablets. The Brave-New-World Eric markets where you dock your phone into a tablet or screen&keyboard and use it as your sole computer.
Dockable? You’re both so 2000-&-late.
Someone needs to look at the Mozilla Seabird demo.
Now I’ll introduce my case which I alluded to in my previous comment, which isn’t quite like any of those cases. My basis for the theory is Nokia executive Tim Holbrow’s actual statements:
What I actually think will happen is a 2-platform unified strategy: MeeGo on the high end, representing the latest developement and Symbian^3 + some yet unannounced closed-source compatibility layer that makes MeeGo apps run on Symbian on the low end, which will differentiate them from other Symbian handsets (Ericsson, etc.). This compatibility layer may also be ported to Windows Phone 7. Maybe.
I call this case “Case Symbian MeeGo-ization” and it allows them time to bring MeeGo to full maturity while still bringing in the bread and butter with Symbian^3 and a couple of Windows Phone 7 devices.
Android has proven that it’s possible to achieve viability in the smartphone platform space without being as good as iOS. They’re playing a ubiquity game, not a quality game.
The question is whether there’s room for another contender in that space. If there is, Windows Phone 7 has a better shot than MeeGo.
Windows Phone 7 is actually a pretty viable contender in the high-end market. It was met with rave reviews upon release, is attracting support from major app vendors, and comes from Microsoft.
I like Jay Maynard’s theory (Meego high, Android low) – I think it will play well politically within Nokia. Remember that they still have very good market share in low-end handsets for emerging/3rd-world markets – the play will be a set of similar, highly integrated (electronically) ultra-cheap low-end Android handsets aimed at making Nokia the one to move that market into the smartphone world. Meanwhile, Symbian limps along until Meego is ready, and the ultimate pitch there is that mere smartphones like Android and iPhone are fine for the third-world and Mac users, but what you really want is a pocket computer, and that means a more general purpose OS.
I’m sure Microsoft will make a big pitch, but I can’t see Nokia going with either Android or WM7 and losing control of their software layer on the high end. Then again, I thought AAPL was a sell at $140, so what do I know…?
> without being as good as iOS
I haven’t used Android but I assume it’s “good enough” to compete with iOS on usability. Most people don’t care about these things so good enough is a low bar.
And ubiquity always trumps quality in this game. Feel free to call that Greywolf’s Law. :) Cases in point include MS-DOS over Amiga, Windows over Mac OS Classic, and Unix over DEC and IBM. In every case, the “quality” system was pushed to the point of occupying a nice, but relatively small niche, while the “ubiquity” system began to take over everything, including increasingly larger portions of the increasingly smaller niche. Failure to understand this consistently recurring pattern in the technology field is the Apple fanboy’s biggest sin.
Bear in mind that Microsoft always plays the ubiquity game and never the quality game. Nevermind what Microsoft says. Every word out of the mouth of a Microsoft exec that appears to be making a statement to the contrary is nothing more than a bald-faced lie.
In the end, the only thing Nokia can do is hope that there is room for one more player in the ubiquity game. Elop understands the ubiquity game; he lived it at Microsoft. That’s the angle he’ll push Nokia to go for, and if they listen, that’s the direction they’ll take.
@Morgan Greywold:
“Every word out of the mouth of a Microsoft exec that appears to be making a statement to the contrary is nothing more than a bald-faced lie.”
I collect true words from the mouths of MS executives. I have still not been able to find any. Can you help?
;-)
@Winter:
“Success is a lousy teacher. It seduces smart people into thinking they can’t lose.” — William H. Gates III, 1995, The Road Ahead.
Seems somehow appropriate….
>Microsoft always plays the ubiquity game and never the quality game.
Actually, except with their failed OSes, ME and Vista, they have mostly played the game Christensen explained in The Innovator’s Dilemma, start with a product that can only compete on the low end and gradually improve it. Both ME and, especially, Vista, they tried to jump into a somewhat different product space rather than playing the incremental game, and it cost them.
Uhm. For Microsoft to trip up android, it’d have to become Android: open source, freely available, freely distributable, freely reusable, and not under Microsoft’s thumb. Even if Nokia were to adopt it wholesale across their entire line, that would not be enough to make it attractive enough to others to switch from Android. In fact, I’d argue that for WM7 to make inroads on that market, it’d have to cost less than Android, which means that M$, not the handset makers, would have to do the porting. Do you see that happening? I don’t.
There’s lots of good stuff out there that never succeeded in the marketplace. Microsoft is not immune to having something in that class.
>Uhm. For Microsoft to trip up android, it’d have to become Android: open source, freely available, freely distributable, freely reusable, and not under Microsoft’s thumb.
Correct. It’s not like the desktop-PC market, where Microsoft has already achieved monopoly lockin and only has to defend it to keep collecting rents; in that context, buying a few points of market share makes sense if the effect is to prevent anyone from becoming a credible rival. In this one, it’s not just that Microsoft already has credible rivals, it’s that there is no even remotely imaginable scenario in which Google and HTC and Samsung and the whole Android army stops fighting.
Under these circumstances, buying market share by suborning Nokia would be throwing away money on a forlorn hope that (a) they can somehow get near 50% market share that way, (b) some sort of hitherto unobserved network externality will take them to 100% after that, and (c) the Android army can do nothing to stop either development. As a strategic plan, this is well into put-down-that-crack-pipe territory.
Much as I’d like Microsoft to waste its money this way, I don’t believe its planners are that stupid. Or, if they were, that the stockholders wouldn’t can their sorry asses.
If you want to convince me of “MeeGo high, Android low”, you’re going to need to explain to me why esr’s wrong about his stability point.
For that matter, is MeeGo really strong enough to be considered the “high end”? I can’t say that “theoretical capability” won’t sell any phones, but it certainly won’t be enough to satisfy Nokia. Sure, I’d rather have an unlocked MeeGo phone than an android if push comes to shove, but I’m the minority of the minority here. In the actual market, wouldn’t Android right now look a lot more like a high end phone even if the MeeGo hardware is better?
>I’d rather have an unlocked MeeGo phone than an android
In fact, so would I. Real Linux on my phone? What’s not to like about that?
I remain skeptical, however. Much as I’d like MeeGo to make a serious run, Android has advantages (first-mover, cost, and Google’s backing) that I don’t think MeeGo can beat. This is a case in which I’d love to be wrong.
Jeremy:
Is the question whether ESR is wrong, or whether Nokia agrees with him?
Nokia has recently been promoting “Qt Quick”, a cross-platform development toolkit – where the supported platforms are MeeGo, Symbian, Windows, Mac, and Linux…
@Jay
>For Microsoft to trip up android, it’d have to become Android: open source, freely available,
>freely distributable, freely reusable, and not under Microsoft’s thumb.
It seems like you’re attributing the popularity and success of Android to these things, and while they are no doubt a factor in the success of Android, I think it ignores that perhaps Android is successful not because it is open, freely available etc, but because it it most like the iPhone.
Arguably, the current goal of smart phones currently is to meet and beat the iPhone at what the iPhone does. Undoubtedly there are a number of Android users who are in the OSS camp and use android for political reasons, but I imagine that there are considerably more users who use Android because it is close enough to the iPhone or because it is the current smart phone choice for their particular carrier. To beat Android, WM7 would not have to be open source or freely distributable, rather it would have to have the applications people want (or a way to run them) and be a reasonable substitute not for the political Android users, but for the incidental users.
Android and iPhone fans both I think attach far more importance to their brand than most users do. In my experience, most users more closely follow the idea of “the right tool for the job” more than the geeks who espouse that philosophy. Often this is dismissed as ignorance or sheepdom (see iPhone v.1 popularity despite short comings, or the popularity of MP3 despite concerns vs ogg vorbis), but is more often than not a misunderstanding on the part of the advocate of just what job the user wants to accomplish.
Long story short, if microsoft can create a compelling enough platform for the user, it’s open source-ness or it’s ability to be redistributed will be minor points, if they are even points at all.
That said, of all the arguments presented here, the MeeGo path seems most convincing to me so far.
Mike: Well, a little bit of both is fine. But yes, that is two question. I have to admit I’m personally more interested in the question of whether that strategy would be successful, but the other is valid.
“It seems like you’re attributing the popularity and success of Android to these things, and while they are no doubt a factor in the success of Android, I think it ignores that perhaps Android is successful not because it is open, freely available etc, but because it it most like the iPhone.”
I think tmoney’s got a good point here. I don’t know a lot of people with Androids, but I do know several, and approximately all of them would fit in with “not because it is open, freely available etc, but because it is most like the iPhone.”
Heh. Ask Eric: I’m by no means an open source fanatic of the stripe you seem to be saying I am. In fact, I lean much more to the Apple-fanboy end of the scale. However, the list I made of things WM7 would have to be to beat Android is predicated on two things: cost and control.
I’m dead certain that the incremental cost of WM7 over Android on handsets is non-zero; when you have volumes in the millions, that adds up fast, and when you have tight margins – which you will have if you want to compete with the likes of HTC and Samsung – you pay attention to every last penny.
Similarly, Android can be made into whatever the handset maker wants it to be, within fairly broad limits. That’s not true of WM7; Microsoft is going to want to control the user experience a lot more than Google seems to want to. (Just look at the Android handsets coming with Bing as the default search engine these days.) Why should a handset maker cede control that way?
For the purposes of this discussion, both Android and WM7 are sufficiently like the iPhone that that’s a wash. I don’t think that factor weighs in favorably on either side (though it does weigh against Symbian).
No, I think WM7 taking over Nokia is little more than a Groklaw fanatic’s opium dream, and there’s not even a good epic poem that will come out of it.
Jeremy, I’m not sure ESR’s wrong about his stability point. That won’t necessarily stop Nokia from making the play.
> I think tmoney’s got a good point here.
No, tmoney is correct that phone users don’t care about open source, but that’s irrelevant. Carriers care about open source, because they’re afraid of getting locked into Microsoft or a Microsoft imitator the same way all the non-Apple PC manufacturers have been taxed by MS for the past ~3 decades, and that fear is what matters about Android being open source.
>Carriers care about open source, because they’re afraid of getting locked into Microsoft or a Microsoft imitator
Indeed it is so. This is why the carriers never flogged Windows Mobile any harder than they had to to collect Microsoft’s marketing-support bribes, when they could have canned all their in-house OS development in favor of Windows Mobile at any time for substantially reduced NRE. And that’s why MeeGo, though it looks weak to me, is far more credible as an Android competitor than WP7; it’s not like the carriers have developed any sudden desire to let Microsoft cream off their profits while they take most of the risks.
To elaborate on what Jay Maynard and techtech said:
The smartphone vendors are not stupid and see what’s going on in the PC world — Microsoft collects a rent that rises, not just in absolute dollars, not just as a percentage, but in real, inflation-adjusted dollars, while the price of everything else and the profit just keeps going down. No vendor who is in a market where every penny (literally) counts is going to put up with that.
Now, if (as others have pointed out) Nokia somehow thinks that Microsoft will provide more value on the porting than they are receiving in revenue, then a deal could be struck. But if that is not a deal predicated on any sort of actual win-win scenario, it would be hard to see it lasting very long. Another possibility is some sort of one-time royalty deal. Microsoft might be deluded enough to think that their stuff is so great that HTC and Samsung will come crawling to them on their hands and knees looking for licenses after Nokia starts stealing marketshare back from them.
If WP7 is actually perceived by some percentage of end users as better than Android, this could actually lead to a somewhat stable point — Nokia gets propped up by Microsoft with a cheap (no per-unit royalty) license as an early adopter, and other vendors, who can manufacture more cheaply than Nokia, have to pay the ongoing Microsoft tax for the right to ship WP7 phones. But to make any money doing that, Microsoft would have to keep working as hard as Apple does. They won’t be able to treat it like a Windows cash cow, because they will have real competition the whole way, from the top and the bottom.
s/as hard as Apple does/even harder than Apple/
Apple’s got a cachet that Microsoft never had and certainly doesn’t have now. No matter how hard MIcrosoft tries, being merely as good as Apple will never be enough. Thy must out-Apple at their own game in order to scale that mountain. It won’t help that Android is getting a higher level of effort, either, and with all of the well-known advantages of scale that open source product has compared to the closed source WM7.
>s/as hard as Apple does/even harder than Apple/
Actually, it’s even worse for Microsoft than Jay points out. Because in addition to having to beat Apple’s brand strength, Microsoft wouldn’t have Apple’s control of the hardware. This would push Microsoft’s costs for port engineering and support significantly higher.
Which leads to the question of why they didn’t just get iPhones. Most likely because they didn’t want AT&T, or because they wanted features like larger screens or physical keyboards. And the reason you can have those choices in the Android world is exactly because it’s open.
Does Nokia actually *make* phones? Could they become another HTC?
@ Jay, techtech, Patrick and esr
I think it’s important to make a distinction between carriers and handset makers. They are two different beasts with different motivations. I think that the open or closed-ness of WM7 and it’s licensing costs matter to the carriers only insofar as they affect the competitive price of the finished phone, and how willing or unwilling microsoft is to block those features which scare the shit out of the carriers (e.g. tethering, VOIP, software control). But ultimately, I think the carriers are more concerned with having the next iPhone (where iPhone could be any smart phone that everyone wants). If microsoft and some manufacturer can provide a better phone, I don’t think the carriers will care one whit about how much it costs the manufacturer to license WM7, or how closed the WM7 source code is. Unless I am severely mistaken about the relationship between carriers and the software vendors for phones, in which case, please enlighten me.
On the other hand, I agree that the handset makers have much more reason to be wary of microsoft and WM7. WM7’s success with manufacturers, at least to me, is entirely dependent on how microsoft is going to approach WM7 as a revenue source. You are correct that if they go about it the way they did Windows, they will find it a hard sell. There are arguments (http://money.cnn.com/2010/10/14/technology/windows_phone_7_cost/index.htm) that Android incurs its own costs, however; I was not able to find any definitive information of the costs of Android manufacture so I can’t vouch for these claims. Also, as with consumers, No denying that WM7 has an uphill battle, but I don’t think its insurmountable with attractive enough licensing terms.
@Brian
Choices are available from RIM, but they are closed. Nothing about WM7 suggests that choices would be unavailable for them either. The iPhone’s closed source helps keep it limited, but open source is not a prerequisite for choice in hardware design.
As if to underscore the point I was making earlier RE: user loyalty to android, I just saw this:
http://us.mobile.reuters.com/article/idUSTRE6AS0XB20101129?ca=rdt
>The survey found that just 25 percent of smartphone owners planned to stay loyal to the operating system running their phone,
>with loyalty highest among Apple users at 59 percent, and lowest for Microsoft’s phone software, at 21 percent.
>
>Of users of Research in Motion’s BlackBerrys, 35 percent said they would stay loyal. The figure was 28 percent for users of
>phones running Google’s Android software, and 24 percent for users of Nokia Symbian phones.
Now whether this disloyalty translates into actual lost customers of course depends greatly on whether the disloyal find a better option of course, but it does illustrate my claim that a significant portion of Android users are in it for the experience, not the politics.
@Jay and @esr:
You’re ignoring quite a few facts here, Jay and esr. Don’t forget that HTC also five WIndows Phone 7 devices in this dogfight. Samsung has a Windows 7 phone too.
Why is that? Because HTC and Samsung aren’t stupid: they’re covering all their bases. HTC and Samsung each have Blackberry phones as well. If Apple would let them, they’d probably have iOS phones, too.
Don’t make the mistake of thinking that Samsung and HTC are Google’s minions here. The phone vendors are Ferengi here: they’ll do anything for profit. They don’t care who wins. They’re just sitting back and waiting to see which phones are most profitable and which phones sell the best. At some point, they’ll probably drop the losers in the smartphone wars; but no matter who wins and who loses, they’ll be sitting pretty.
>Don’t make the mistake of thinking that Samsung and HTC are Google’s minions here.
Not my error. HTC and Samsung will fight Google’s side exactly as long as doing so maximizes their profits. But that’s exactly why open source is powerful here, because it kicks hell out of the costs associated with getting a functioning device to market.
@Jay> I’m dead certain that the incremental cost of WM7 over Android on handsets is non-zero; when you have volumes in the millions, that adds up fast, and when you have tight margins – which you will have if you want to compete with the likes of HTC and Samsung – you pay attention to every last penny.
@esr> Under these circumstances, buying market share by suborning Nokia would be throwing away money on a forlorn hope that (a) they can somehow get near 50% market share that way, (b) some sort of hitherto unobserved network externality will take them to 100% after that, and (c) the Android army can do nothing to stop either development. As a strategic plan, this is well into put-down-that-crack-pipe territory.
Much as I’d like Microsoft to waste its money this way, I don’t believe its planners are that stupid. Or, if they were, that the stockholders wouldn’t can their sorry asses.
Who here remembers when Netscape was the majority browser, and Microsoft gave away Internet Explorer just to kill Netscape?
Or when Microsoft discounted Microsoft Money down to, uh, free, just to kill Intuit?
Because Eric and Jay appear to have (conveniently) …. dis-remembered.
>Who here remembers when Netscape was the majority browser, and Microsoft gave away Internet Explorer just to kill Netscape?
And that analogy might even be instructive….if Microsoft had anything resembling the Windows monopoly in place to leverage from.
Yeah. Look at just how dead Intuit is.
And giving away M$IE worked, true – until Netscape reinvented itself as open source. Now it’s doing nothing but losing market share.
In neither case was the existing competition already open source and available at an incremental cost of US$0 per unit.
There’s another lesson to be drawn from these, too: Once M$ started giving them away, they could not stop. Their ongoing revenue stream from both products is now US$0. That’s fine if you’re not making money off of the product and are willing to give up any future possibility of revenue from it. Is M$ willing to give up any possibility of revenue from WM7? What would they gain in return? Here, the platform is the product.
Carriers and handset makers aren’t going to bite. Even if they could have an ironclad guarantee that adopting WM7 will cost them no more in real outlays than adopting Android in perpetuity, they’re still surrendering control of the user experience to Microsoft. What would they have to gain from it? There’s no existing mountain of software they’d immediately gain access to, no customer base clamoring for it, and no other competitive advantage to be had.
I’d argue that giving away IE for free had less to do with Netscape than the idea of trying to lock people into using windows to host the internet. That would mean they traded away a meaningless revenue stream from a browser in a gamble for a lock on serious server technology.
Which, of course, only reinforces the point you and Eric are making. There’s no lock in strategy that this will complement, you’re not going to undercut the competition and, perhaps even worse, IE was a browser coming from people who had no prior reputation in the browser space. Windows Mobile already has a bad rep so no-one with any historical knowledge of the smart phone space will take the quality experience type strategy seriously.
@ Jay,
I’m no cell phone manufacturer, but just because the cost of Android itself is $0, it does not necessarily follow that the cost of using Android as the platform for your phone is $0.
As to the “existing mountain of software”, again I have to wonder at what real limitations there are that prevent any other device or OS from having an “android compatibility layer”? It doesn’t happen on Apple because Apple has their App store and wants their users to think only of the App Store. Microsoft does not necessarily have to or want to follow that same path. Sure they may want to have their own App store and have all their phone stuff written with their APIs, but remember they also invented the “Embrace, Extend, Kill” method of competition.
As to gains from using WM7, that all depends. MS promises a plugin type architecture designed to abstract away changes to the underlying OS from the developers and handset makers. Whether that holds to be true or not of course remains to be seen, but I imagine would be attractive to a manufacturer that is on razor thin margins and looking to cut any bit they can out of the software development costs. It is also my understanding the Microsoft intends to allow users, not carriers to dictate upgrading the software on their phone, this is certainly a selling point in light of increasing fragmentation among android phones. Microsoft is also arguing lawsuit protection. You and I know (or at least believe) such lawsuits to be bunk, but stranger suits have succeeded, and even if they don’t, they still cost money. And no one is better at running a FUD campaign to corporate suits than Microsoft.
Again, I’m not saying WM7 doesn’t have an uphill battle to fight, nor am I saying that Nokia will pick WM7 as their platform, but it would be foolish to ignore the potential that WM7 has to disrupt the market if done right. As I recall, just about 5 years ago, there were proclamations that an computer company with no cell phone experience could ever succeed a making a smart phone and competing with the big boys; today we have the iPhone as the target to beat. Years before that, the RAZR was the phone to be and the phone to have. Now, Microsoft doesn’t strike me as the first thought for innovative, new and disruptive technologies, but the cell phone market is fickle, and what people love today may not be what they love tomorrow.
>WP7 is aiming at the social-networking user, ie teens and college students. That’s a terrible fit with the Microsoft brand (which is very enterprisey these days) but is an underserved niche. I think it fails, but I can see what they are trying to achieve.
At least in my country telephone companies/ISPs are serving that market with BlackBerry offering a cheap data plan with only access to Gmail/Hotmail, Facebook, and MSNMessenger…
@ JonB (my kingdom for an edit button)
I can think of one lock in component for Microsoft. Exchange. Both on the business side, and the ever growing consumer side. If I had to bet, I would say that sometime in the near future (next 5-10 years) the who controls the cellphone market will be the one that controls and provides the best “Cloud” for people.
> I can think of one lock in component for Microsoft. Exchange.
Indeed. Exchange and the Xbox. Consider a WM7 phone as a controller for the Xbox, with the Xbox developers writing code for same. Or WM7 games that largely use the same APIs and connect to Xbox Live.
Let us not forget Office, either. Or Microsoft’s partnership with NBC/Universal.
Or this little trinket from last year, when Elop was at MSFT: http://www.microsoft.com/presspass/press/2009/aug09/08-12pixipr.mspx
And the whole thing with Elop is strange.
While one could interpret Elop’s departure as a loss for Microsoft, (one view is that Nokia poached a key executive), the situation seems uncharacteristically amicable.
Elop’s move to become the CEO of a possible competitor was notable because there was no rush to physically push him off Microsoft’s campus. Although technically stripped of his title, Elop was allowed to linger. Why? Typically, when a senior Microsoft executive leaves for another tech company, the end is far more, shall we say, abrupt.
Balmer throws chairs when people leave for Google, but when the guy who runs the unit that produces Office *AND* Exchange at Microsoft leaves for Nokia?
He’s all smiles
From the frontlines Meego is doomed
Oh, and the event in-question? Totally open and free. One needed to just sign up on the website and turn up.
Which is probably the most damning thing about the platform: when such effort is spent at luring developers in, one wonders.
Don wrote: “The Meego native apps would still be faster (running in binary and not under the JVM) and that would be the differentiator between them and other Android phones.”
Remember, as of 2.2, Android has a JIT, so the speed difference might not be that great.
Hey, Y2K just called and they want their argument back. Exchange isn’t a lock-in component for Microsoft anymore. There are lots of open source drop-in replacements on both the client side and the server side of this equation these days. In fact, I know of at least 3 Fortune 500 companies that are replacing or have completely replaced their Exchange servers, and two more that have never used Exchange.
Really author of this badly reads the playing field.
Linux kernel has the arm chip makers support. Windows Phone 7 does not neither does Symbian . Maintaining own is going to be a lot of cost. With the low cost competition Nokia will not be able to justify.
WIndows Phone 7 yes 5 are made. Yet I am seeing 2 for one sales of HTC of Windows Phone just to get them out of the stores. You don’t see that with Android or Symbian phones.
Microsoft. Exchange locking most likely will not count inside 12 months at any level. http://www.openchange.org/ . This is the reason why MS is pushing Sharepoint so hard.
Nokia is most likely to go meego. JIT has a habit of being memory heavy and not as power effective as native code. So we might see runtime differences between Meego and Android.
Really we need both. So we have competition in the market..
@ Morgan
>There are lots of open source drop-in replacements on both the client side and the server side of this equation
>these days. In fact, I know of at least 3 Fortune 500 companies that are replacing or have completely
>replaced their Exchange servers, and two more that have never used Exchange.
And? How does that prevent Microsoft leveraging Exchange or some other form of “cloud” sync and computing to lock people into using WM7 devices? Yes, there are businesses that are and can afford to try something else. And there are also businesses who are slaves to their sales weasels, and will buy whatever microsoft product will make them happy. Will they have a tough time getting new people in the face of Google’s calendar/mail integrations or other open source options, sure, but Google has been slipping up on that don’t be evil slogan, and open source has its own share of costs (and considering I just finished moving a company from a 90% microsoft system to a 90% open source system, I should know. We made the transition almost entirely seamlessly but that was not without its costs). At least with a microsoft product, you know you’re dealing with the devil, and you know the costs associated. Don’t under estimate how tempting that is to suits.
@Oiaohm,
I don’t think I got most of what you are saying, but your claim on two for one is definitely wrong.
Both tmobile http://www.androidpolice.com/2010/11/22/t-mobile-announces-a-buy-one-get-one-free-holiday-smartphone-promotion/
and verizon http://phandroid.com/2010/02/16/buy-one-get-one-free-android-phones-at-verizon-wireless/
Have or are running 2 for 1 deals on Android phones.
@Morgan
I don’t really disagree with your overall point but to be fair this is as much an argument for microsoft to spend money on this than the other way around. One of the more “in character” moves I could see is MS spending money to try to “value add” around exchange(perhaps in the area of presence) to try to spike the pitch of the open source exchange alternatives.
The main problem with the argument is that i don’t see it really affecting anyone other than business users. If they were looking to focus on stealing back RIM’s business then that could potentially be an effective strategy, but that would be effectively conceding the greater market for a niche role.
Also it’s entirely possible that OS could release a presence/messenger solution faster than the exchange one, it’s not exactly black magic.
2 for 1 on Windows phones
2 for 1 on Android phones
shit, they can’t give them away fast enough
The Apple fanboy in me can’t resist asking when the last time you saw a 2-for-1 deal on the iPhone was…
Hm. Based on a study of http requests, the dominant smartphone OS in most of the world is…. Symbian?
* When looking at mobile web usage, the different parts of the world are led by either iOS or Symbian. Apple’s iOS leads mobile web usage in North America, Europe and Oceania, while Nokia’s Symbian leads in Africa, Asia and South America.
* Worldwide, Symbian leads the pack. This is not surprising considering Nokia is the world’s largest maker of mobile phones. After Symbian comes iOS, Blackberry, Android, Sony Ericsson and Samsung, in that order.
* Symbian’s weakest position by far is in North America.
* Blackberry’s strongest region is North America, but it is still behind iOS there.
* Android might be growing fast, but it’s still far from dominating any part of the world.
Based on that, I’m actually leaning to Meego-only as Nokia’s likely plan.
> The Apple fanboy in me can’t resist asking when the last time you saw a 2-for-1 deal on the iPhone was…
Around Eric’s second birthday. (a subtle joke)
Yes, carriers will happily “give” you phones in order to rake in the monthly fees. Do you think $200 is the actual cost of an iPhone?
Android and Android Market have really changed the game. Applications are no longer a source of income for the operators because their customers are no longer captive (Apples store for the Iphone was the first inroad into the walled gardens of the operators, Android Market shatters the gates. This means that unless you have revolutionary software features to add to your phone, all software production is just a cost burden. In the cutthroat market of mobile phones your margins will not allow spending money on software, because your competitors are getting their software for free (almost). This is the revolution that Android has made. All the Asian phone manufacturers are heading the Android way and even Sony Ericsson has gone down that path. If Nokia goes any other way they are dead. Nokia is just a phone manufacturer. They have no other major leg to stand on. They have the advantage of being able to produce extremely cheap hardware due to extreme autoization of the manufacturing process.
The handset manufacturers are reduced to competing on hardware features, design and price. Apple has the design niche cornered. Left for the others are hardware features and price, just like in the PC market. We will soon see a plethora of phones with capabilities rivaling the HTC Desire and the Samsung Galaxy at prices just over $100.
The biggest problem that I have with this is that we know that stats based on web requests are unreliable at best and complete fantasy at worst. The least of the problems is how do you distinguish what is a smartphone? Nokia have released some phones that are dumb enough that to include them as “smart” is almost an insult, but they do have a web browser and a 2 or 3g web connection so they’d count.
Ultimately, I’m not saying that the study is totally bunk, I think the rankings are probably about right roughly speaking(for now) and your points for the most part stand. I’m just not convinced on the specifics.
Truth be told, i’m not sure I have a definition of smartphone thats actually interesting… it’s not like you’re likely to get a phone that doesn’t have a calendar, email and web browser in it anymore. I’d probably argue that anything that isn’t connected to some form of app store(and can’t at least have ad-hoc apps installed on it) is probably disqualified straight off.
Hmm, Based on a study of http requests, Symbian is only dominant in Africa, Asia and South America.
http://royal.pingdom.com/2010/11/30/mobile-os-usage-splits-the-world-chart/
And “worldwide”. Part of that being explained by Africa and Asia having massive populations. Also where they do have a lead it’s hugely overwhelming.
By contrast, iOS’ big lead is in oceania… not exactly a high pop concentration whereas their highest concentration(Europe) isn’t that overwhelming a lead.
However I still don’t think HTTP Requests are a reliable primary source of data.
It looks like the most likely prospect for Nokia’s future smartphone OS is…
drumroll… drumroll…
Windows Phone 7.
Maybe it’s just lost in translation but to me the actual comment reads that Microsoft is going to put some stuff on phones created by Nokia and these phones _may_ (or may not) go under the name Nokia.
So rather than building a coffin for himself and moving the whole company lock, stock and barrel down to redmond, perhaps Elop has instead sold the board on “it’ll be fine, and we’ll do a small product run to prove it. If you don’t like the result, we can still get some profit by selling the hardware to MS and let them cop it in the shorts if it sucks”.
It also raises another possibility that i don’t recall being raised (i’m probably wrong on that however) that Nokia may try both. If, as the article surmises, Nokia is shedding NIH with regards to software it makes sense for them to do what every other hardware manufacturer does and keep their options very open.
One thing I would note is that Android is almost custom designed for a group like Nokia. As the article notes, Nokia are fantastic at hardware design, Crap at software. Well android covers the weakness in the second part and Nokia can then differentiate on their strength. The fact that it doesn’t matter what you want, they’ve got a handset thats perfect for you.