If you’re still scratching your head and asking yourself how this Nokia-Microsoft partnership could benefit the two giants, rest assured you’re not the only one. Here at BSN, we too are split over the unusual Microkia symbiosis. One camp is adamant the deal spells doom for the Finnish cell phone giant, sharing the skepticism with Asymco’s Horace Dediu who summarized eight similar Microsoft alliances that went wrong. The other camp is positive that Windows Phone will help Nokia dig themselves out of the platform hole and is keeping their fingers crossed for awesome new devices, like an amazing Nokia Windows Phone concept smartphone that could fight off the black rectangle syndrome.
From what we know so far, Microsoft is bringing its mobile operating system and services to the table. Additionally, we’ve learned recently that the software behemoth pledged to invest billions in engineering help, helping Nokia reduce their R&D spending spree to a sustainable level. The Windows maker sings praises for Nokia’s expertise in hardware design, imaging, mapping and location services.
When you think of it, each partner has what the other lacks. Nokia needs an advanced software platform – and Windows Phone is certainly way more capable than Symbian. Nokia fans will only benefit from deep Office, Xbox Live and Bing support baked right into the bowels of the operating system.
Nokia’s app and content store called the Ovi Store will be phased out and its content moved to Windows Marketplace where Microsoft carries free and paid Windows Phone apps. That’s a good thing because the Ovi store has been a dud. In turn, Microsoft gets to improve its Bing search engine and maps by using Nokia’s world-class GPS data obtained through their $8.1 billion Navteq acquisition in October of 2007. Comments like "That’s it, I’m out" or "It was good while it lasted, but I’m switching" still confuse me. Nokia fans, don’t be nuts – this could be the best thing to have happened to your ailing platform. Included below is a slide Nokia’s new boss Stephen Elop showed last week at an investor meeting in London. See that? It’s the resulting ecosystem of the Nokia-Microsoft alliance.
Will that be a strong enough ecosystem to take on Apple’s iTunes empire or Google’s cloud-everything Android approach? Only time will tell. But if Microsoft’s persistence and financial backing plus Nokia’s brand and global marketing are an indication, it’s a win-win. Global reach matters in this game and boy is Nokia an undisputed leader in this respect. The firm has sales channels and retails partners in the strangest places where Apple and Google will lack street presence for a long time. Another slide below, this one from Microsoft, summarizes the respective firm’s numbers and achievements to an easily digestible table.
Let’s not forget both companies have built world-class brands that are instantly recognizable everywhere. Nokia is the number one phone vendor in the world and Microsoft with the Xbox 360 and Xbox Live gaming service beat Sony to the console punch, its Kinect controller is leading the charge in motion-based gaming and Office is still (and by a large margin) the de facto corporate standard. So, how is the Nokia-Microsoft marriage going to pan out? As always, it depends on the synergy effecs. If the whole becomes greater than the sum of its parts, they’ll be just fine. Matter of fact, if that’s what’s at play here than Nokia and Microsoft have already created a three-horse race here, like Elop suggested. Beg to differ? Meet us in comments.