MICROSOFT-NOKIA: The Biggest Winners And Losers

Ballmer’s best chance to smash the iPhone?

Microsoft and Nokia have tied the knot. At least for the near future, Nokia will use Microsoft’s Windows Phone 7 software as the basis for its smartphones.How does this affect the industry?

Well, it’s good news for Microsoft, as it now has a major partner which actually has some skin in the game — something it didn’t really have yesterday.

But it’s probably bad news for Nokia, as it’s unlikely to return the company to glory.

WINNER: Microsoft

This is a coup for Microsoft: The biggest mobile phone maker in the world is using its Windows software, and not Google Android, as the basis for its new smartphones.

This may not make Windows Phone 7 a winner in the market, and it may never make Microsoft much money. (And it could totally flop in the U.S. Heck, it could totally flop everywhere.)

But it's definitely the best outcome possible for Microsoft. Maybe it should lose more senior executives to big potential partners!


What, you think Steve Jobs is even the slightest bit worried? Not only does Nokia now have a huge integration challenge ahead of itself, but it's going to be fumbling for at least a year with this project, maybe two, and maybe forever.

The high end of the market is still Apple's to lose.

LOSER: Nokia

The odds of this deal working out spectacularly for Nokia are very slim.

Sure, it may have been their only move. But it's still very risky for Nokia to put its destiny in Microsoft's hands, and lost control over its software future.

For more, see our companion piece, Why Nokia Is Still Doomed.

LOSER/NEUTRAL: Google Android

This could have been Google's deal. Instead, Windows got it, and now Microsoft is going to be a stronger competitor, both in OS share and mobile search.

However, there is some good news for Google here. If partners like Samsung and HTC, who make both Google and Microsoft phones, get disillusioned with Microsoft, they could cling more tightly to Android. It could also push RIM to move the BlackBerry into the Android camp.

And if Nokia totally fumbles -- which is entirely possible -- it could be beneficial to Android in the market, too.

WINNER: Qualcomm

Qualcomm is the only chip vendor qualified for Windows Phone 7 devices, according to Morgan Stanley analyst Ehud Gelblum.

Qualcomm could begin shipping at least 100 million new Snapdragon chips per year to Nokia over the next 2 years, from zero today, Gelblum says in a note today.

LOSER: Intel

Intel is nowhere in mobile. And Microsoft, its big partner with Windows PCs, isn't helping. More at ZDNet.

Plus, as many readers remind us, Intel was Nokia's big partner with MeeGo. Not anymore.

WINNER: Motorola

Nokia won't be competing with Motorola on Android, and it could take Nokia a long time to become a big factor in the U.S. market.

This is good for Motorola, which is mostly a U.S. player, Morgan Stanley's Ehud Gelblum notes today.

TOO EARLY TO TELL: Research In Motion

If Nokia and Microsoft can get any traction in the enterprise, this is bad news for RIM. It may also push RIM closer to the Android camp, which could undermine RIM's long-term independence. And it pretty much signals that Microsoft isn't going to buy RIM in the next year or two.

But if it's a flop, it could be good news for RIM in the market -- especially as RIM finds most of its growth in non-North American markets, where Nokia is historically strong. (At very least, the delay while Nokia ramps up is good news for RIM.)

And if Microsoft gets desperate in a couple of years, it may end up buying RIM after all.

WINNER: Windows Phone 7 developers

There aren't many of them. But they are about to get a much bigger audience to sell their apps to.

LOSER: Symbian developers

Sorry, the platform you've been coding for is dead. Hope you like Windows.

WINNERS: Mobile phone carriers

Microsoft and Nokia are going to come begging for more support, marketing help, and sales assistance.

That's at least good for some expensive dinners and golf trips, right?

Who are we missing?

Let us know and we'll add it to the list: [email protected]

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