Nokia & Microsoft Partnership #FAIL

So, Nokia hire an ex-Microsoft employee as CEO to turn around their business and guess what he does … he nails Nokia’s smartphone future to Microsoft and their ‘Windows Phone’ platform. On the face of it, it looks like sheer laziness for an ex-Microsoft man to call up his old bosses to strike a deal. Supposedly Nokia and Google could not agree on terms, which is quite incredible considering Google don’t charge for Android (and about 20 other handset manufacturers managed to get it done)! Instead, Nokia will now pay licensing fees to Microsoft and will oblige their users to use Bing (at least by default). Perhaps Stephen Elop didn’t want an Android deal … good way to alienate >40% of the market. Genius.

A lot of industry ‘experts’ think the deal is a good one. Nokia can stick to making handsets and Microsoft can focus on the software. However the fact that Nokia will have to pay for Windows will mean they’re instantly at a disadvantage to Apple, Google and RIM. This will likely mean their hardware will never be as high-spec as equivalents from the competition to leave enough room for the license fee.

Some say that competing in the Android market would be too hard for Nokia, which is a big pile of steaming balls. Nokia make fantastic hardware, and are especially strong in the ‘budget’ sector. In terms of Android handsets (and all others for that matter), Nokia could have completely dominated the cheaper end of the smartphone market. This is where the real volume is and Nokia have massive brand loyalty in emerging markets. Google is just ‘cooler’ than Microsoft/Windows and everyone (apart from the Nokia board) knows it.

This appears to be a partnership of two Goliaths, however these two companies have both been way too slow to adjust to the fast moving smartphone market. Microsoft did next to nothing to counteract Android and Nokia for years seemed to be determined to go down with the Symbian ship. It wasn’t long ago Nokia were calling development companies like mine in India begging them to learn to develop for Symbian and offer it to customers. I don’t think we’ve ever had an enquiry for a ‘Symbian App’ despite their market share. We’ve never had an enquiry for a ‘Windows Phone’ app either … oh dear.

So here’s what I think will happen next. Developers will continue to go crazy for iOS and Android, leaving the others by the wayside. If you want the best apps, you have a choice of two platforms in 2011. Business users will probably prop up RIM and their Blackberry phones but there are some nice Android phones with keyboards now. Nokia will hopefully continue to negotiate with Google and realise that having ‘Windows’ on their phones isn’t going to save them … and perhaps in another year they’ll finally release a few Android phones, which will immediately out-sell their ‘Windows’-powered siblings.

In short, the only winner from this deal is Microsoft who struggled to sell more than 500,000 smartphones in the past month. Maybe they deliberately sent Stephen Elop over to Nokia to infiltrate them!