It was rumoured for a while, and now they’ve made it official: Nokia will go with Windows Phone 7 as its smartphone operating system. The two companies published an “open letter” on Nokia’s blog which lays out their “broad strategic partnership”.Here’s the key points:
- Windows Phone will be Nokia’s “primary” (doesn’t say exclusive) smartphone OS;
- Nokia will use Bing on all its phones from now on;
- Nokia Maps will power many Microsoft services — this one is interesting; they say Nokia Maps could be used as the maps engine on Bing and be used in AdCenter;
- Nokia will merge its app store with Microsoft’s so that Windows Phone has a better developer ecosystem.
So there you have it, folks. There will be more details later today probably but here are the main points from the blog post.
What do we think? On the one hand, Google exec Vic Gundotra’s point sticks in our minds: “two turkeys don’t make an eagle.” On the other hand, this is obviously a huge coup for Microsoft, which all of a sudden is gaining huge marketshare for an OS that was up until now well-regarded but had little distribution.
It’s also a welcome stroke of realism for Nokia, which had years and years and years to come up with its own modern smartphone platform and failed. Bringing in Stephen Elop as an outside CEO clearly helped, as the clarity of his amazing “burning platform” memo showed. It’s ironic that it took a Microsoftie, someone from the world of software, to kill Nokia as a software company.
Does this mean that Nokia is saved? Well, no.
First of all, Microsoft‘s platform could still fail. That’s the problem with going with someone else’s platform: you’re dependent on it. Now Nokia is basically trying to turn itself into a Dell of mobile: leave the software to others and make money by churning out zillions of pieces of hardware with a ruthlessly efficient manufacturing model and tight margins.
Second of all, Nokia could still fail. Right now Nokia is good at pumping out zillions of “good-enough” hardware at a reasonable price and distributing it to consumers in every corner of the world. They’re getting undercut from both sides of the market. On the low end, Chinese OEMs crank out phones that are noticeably cheaper and only-slightly-less-good by the boatload. On the high end, of course, Nokia couldn’t match the hardware OR software experience offered by Apple or Android/Samsung or, evidently, even Windows.
That hasn’t been fixed either. Nokia will still have to fight hard to defend its “base” of low cost featurephones and global distribution, and will still have to crank out phones whose hardware is at least as good as what HTC or Motorola does.
CEO Elop still has a lot on his plate. But every move he’s made so far has been ruthlessly clear-headed and bold. So we’ll say we’re cautiously optimistic on this one.
Update: The stock is getting crushed on the news, down about 10% already.