This last few days has revealed very interesting developments between Microsoft and Nokia. Here are my predictions for what the long term plans are for the companies.
Nokia’s CEO is an ex MS guy. And surprise surprise, he decides to partner with MS for Windows Phone 7. Nokia had to do something, their current strategy definitely wasn’t going anywhere. I think there is more to this than just partnering to make Windows phones however.The mobile computing market (smart phones and tablets etc) is absolutely taking off at the moment. Microsoft is also currently nowhere to be seen in this segment at the moment. Apple is doing phenomenal. Partly due to the fact they control both the hardware and software, and with a strong understanding of UI can match the two near perfectly to create a silky smooth experience. Google is doing great too as they have a great OS in Android and many handset makers are happy to work with them as they are treated well by Google. Some of the handset makers make Windows Phone 7 units but the reality is they are just a side project for these manufacturers. They are really just paying MS lip service. MS has a history of not working well with their partners and eventually stabbing most of them in the back so it’s no surprise that nobody is too keen to play seriously with MS here.
Microsoft can have no serious presence in the market under these circumstances.
My prediction is that this partnership will eventually turn Nokia into MS’s hardware division. MS is already getting it’s tentacles into Nokia. It started with Elop as CEO and we have just heard that he has replaced Nokia USA President Mark Louison with an ex Microsoft Sales and Marketing veteran. Over time it wouldn’t surprise me if we see several other top Nokia jobs replaced with ex MS guys.
Nokia makes great hardware and MS’s strategy will be to make sure that it runs only MS software. In the not too distant future I predict MS will cease allowing other manufacturers to make WP7 units and Nokia will become the only manufacturer. MS will then work very closely with them to make sure the hardware and software is matched (similar to what Apple does now). If WP7 only has to work with Nokia hardware and Nokia hardware only has to run WP7 then it becomes easier for them to create a smooth, coherent experience.
Nokia stock is down at the moment. I wouldn’t be surprised if this also fits well into MS’s plan. They will buy a lot of this stock while it’s cheap, giving them more leverage to influence Nokia down the track.
This move also benefits MS in being able to directly attack Apple. Nokia and Apple are currently in dispute over various patents. MS has a lot of experience and power when it comes to legal battles. They also have a lot of patents themselves they could lend to Nokia for the sake of fighting Apple. I wouldn’t be surprised if we see Nokia suddenly step up it’s legal battles with Apple in a big way soon. Possibly they will start attacking Android and it’s manufacturers also.
It would seem that this has turned out to be a well planned move on MS’s part. We’ll just have to wait and see how it plays out for them.
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