Sep 19

Analysis of Hot Issue: Nokia declared to use Microsoft’s Windows Phone 7

  Nokia declared to use Microsoft’s Windows Phone 7

Surprising But Rational:That Nokia stated its new strategy meant announcing to the world the failure of Symbian and Meego. Although many people have been suspecting the strength of Nokia’s own smartphone OS, they cannot determinate completely. Now their suspect is confirmed. However, from the perspective of Nokia, such a decision is rational. The tremendous change brought by mobile internet is far beyond the estimate of Nokia itself. Europe as a whole started too late and does not show us any hope in this domain. From my perspective, no other smartphone OS vendor can at last be successful than US based vendors. The key issue is the far more mature industry chain and capital market in USA. Choosing to cooperate with a rising star is much better than a present giant.
Rebalance: As Android gets 22.7% in the market of smartphone OS according to Gartner, most people are inclined to think it will be the dominant OS in near future. Some actions against the version breakup initiated by Google aggravate the worry, especially for device makers. To rebalance, they have to stand with another OS vendor to maintain their power to negotiate.
For Nokia: Badfor short term but maybe good for middle term. The traditional strength of Nokia is still strong, such as branding, distribution, localization, low cost, humanized design. Choosing WP7 means racing with other handset vendors from the same starting line. Remember, Microsoft is intending to enter developing markets with updated version called Mango which allows middle-end hardware configuration in attempt to beat Google. Therefore, the value of Nokia is huge for Microsoft.
For Microsoft: Good for short and middle term. With the participation of Nokia, the ecosystem of Microsoft is much stronger, appealing to other device vendors. Many makers which are hesitating over the ecosystem will join it with higher probability.
For Google: Bad for short term but unclear for middle to long term. Rebalance is a huge challenge for Google. Google has to reconsider its cooperation strategy to maintain the attraction of its ecosystem. Although homogenization is inevitable, it is still long way to go. Before the emergence of enough low entry for current PC and home appliance makers, Google needs to consolidate its relationship with some key device makers.
For device Maker: Neutral. The rise of WP7 is a good balance for them but Nokia is bad for them. Moto may be least negatively impacted because it mainly focuses in high-end US market.
For Qualcomm: Good for short and middle term. The cooperation between Microsoft and Qualcomm was expected by me in 2009 but actually came more than one year later. 8255 and 7230 are expected to have higher market share. The launch of dual-core chipset MSM8x60 will further stabilize its position.

Nokia declared to use Microsoft’s Windows Phone 7