Nokia and Microsoft: Match Made in the Twilight Zone

For most of us, there are events in history that we remember with crystal clarity, even down to the specific details of what we were doing when they happened. The Twin Towers tragedy is one recent example; another might be a positive event, such as the tearing down of the Berlin Wall.

Here, within our little microcosm in the world of technology, there's generally nothing to compare with events like those, needless to say. Yet, on some relative scale, it doesn't seem entirely unreasonable to say that news of Nokia's (NYSE: NOK) partnership with Microsoft was in some way comparable to some small degree.

Linux Girl, for example, was having lunch down at the blogosphere's Git Grub cafe when the story broke, and she practically fell off her chair in disbelief. That Nokia -- floundering as it was -- would align itself with Microsoft's (Nasdaq: MSFT) crippled and beleaguered mobile mess rather than the ever-victorious Android army was simply beyond imagination -- and it still is.

Nevertheless, not only will the day forever be emblazoned in Linux Girl's mind, but it continues to be one of the hottest topics of conversation to hit the Linux blogosphere in a very long time. As soon as she had picked herself back up off the floor, Linux Girl got her Quick Quotes Quill warmed up and ready to do its part for posterity.

She didn't have to look far for a vast sampling of opinions.

'They Had a Nice Run'

"I have two immediate reactions," Slashdot blogger yagu began: "I can't believe Nokia thinks this is a good idea!" and "I can't believe Microsoft thinks this is a good idea!"

Of course, "Microsoft doesn't stake its existence on good ideas," yagu pointed out. "Microsoft would love to hit the mobile phone market big time, but it doesn't make or break their company -- they just needed some surrogate to plant their Windows 7 Phone seed and hope it grows."

Nokia, however, "stands to lose -- too much -- and it probably will," yagu predicted.

"Nobody cares that Windows 7 Phone rocks," he explained. "Everyone knows, right or wrong, that iPhone and Android rule.

"Microsoft may be starting too far behind this time in a market that they can't bully," yagu concluded. "Nokia comes close to betting their company on this one. They had a nice run."

'All of the Wrong Changes'

Indeed, "Elop is either a Trojan horse or completely incompetent," consultant and Slashdot blogger Gerhard Mack opined. "If the last 30 years of computing history has taught us anything, it's that partnerships with Microsoft tend to turn out really badly for the partner that's not Microsoft. Just ask IBM (NYSE: IBM) or SpyGlass."

Elop said that "going with Android would commoditize the phone, and he's right," Mack pointed out. The only problems are that "Android did exactly what Microsoft still wants to do, and the process has now already irreversibly begun. Now he's got a phone that at best is just as good as an Android but now $50 more expensive."

Elop's "bewildering" assertion that the telcos want a third market player, meanwhile, is "just madness," Mack asserted. "One of the things Apple (Nasdaq: AAPL) has changed is that manufacturers are not as easily bullied into doing things the Telco way.

"Remember the days of telcos disabling features like USB so you would be forced to use their premium features to get pictures off your phone?" Mack pointed out. "Now that I have options I will spend my money on phones from people who treat me right."

It's commonly said that Nokia missed a fundamental industry change, but most people "are wrong about what that change was," he added. "The change was not the move to smartphones but a change away from being telco-dominated to consumer-oriented.

"Nokia didn't just lose out on the high end by not spotting this, but they lost out on the low end as well with things the telcos absolutely hate, like dual sim phones," Mack concluded. "Elop is making the same mistake and is, in turn, making all of the wrong changes."

'The Best Call'

Of course, "Nokia was bleeding to death," Slashdot blogger hairyfeet pointed out. "For all the 'ZOMG M$ ZOMG!' talk we've heard about this, nobody seems to accept the fact that Nokia was bleeding out..

"Read the reviews of MeeGo -- it isn't even alpha quality after over a year of development; dumb phones are going the way of the 8 track, even in the third world; and neither Apple nor HP (NYSE: HPQ) will sell them iOS or WebOS," hairyfeet explained. "So where could they go? They simply couldn't afford to waste another year or two with NO real offering in the crucial smartphone market."

Hairyfeet's prediction is that "the first Nokia WinPhones roll out in September, just in time for the crucial holiday sales," he told Linux Girl. Also, "I predict MSFT will offer a crazy low price on an X360 bundle to those that buy Nokia WinPhone, which will integrate with the X360 and Windows 7.

"The fanboys can scream all they want, but in the end the CEO at Nokia made the best and I would argue ONLY call he had to make," hairyfeet concluded.

'Partners Brought to Extinction'

Then again, "we don't know a lot about this alliance," cautioned Chris Travers, a Slashdot blogger who works on the LedgerSMB project.

"I wonder what Microsoft gave Nokia to sign onto this deal -- a steep discount on license fees? Some special assistance? Or was it just a sense on Nokia's side that Windows is the future of smartphones?" Travers mused.

Whatever it was, blogger Robert Pogson wasn't impressed.

"Nokia is lining up to become one of many 'partners' of M$ brought to extinction," Pogson told Linux Girl. "Instead of throwing in with Android and competing in a thriving market, they have turned off the road into the cemetery. It looks like a Canadian mole for M$ did the technological evangelism."

In the short term, "this will help Android/Linux grow faster as Nokia shrinks," Pogson predicted. It will also "kill Nokia faster, as no one will want to buy a dead-end product in the absence of phoney 7. I hope M$ paid enough to damage M$'s bottom line."

'A Marketing Disaster'

Indeed, "Microsoft has a long history of announcing future products to prevent customers from considering nascent offerings from potential competitors," noted Barbara Hudson, a blogger on Slashdot who goes by "Tom" on the site. "Former Microsoftie Stephen Elop, now Nokia CEO, fell back on this tactic when he announced that all future Nokia smartphones would run Windows Phone 7.

"Unfortunately for Nokia and Elop, monopoly tactics don't work so well when the OS you just bet the company on has no market share," Hudson pointed out.

Elop also "immediately turned all current Nokia smartphone offerings into technological dead ends, lame ducks," she asserted. "And now that we know there will be no Windows-based Nokia phones until some time in 2012, this is morphing into a marketing disaster."

Revenge on Finland?

Linux-based smartphones running Android "went from nowhere to #1 in sales in one year," Hudson pointed out. "By the time the Windows-on-Nokia partnership gets its first phones out the door in 2012, people will have bought well over another 100 million linux-based smartphones, another 75 million iPhones, and of course people will still be buying their Crackberries.

"Now throw in other manufacturers who will have had more than a year of experience shipping WP7 devices, and Nokia will be facing a perfect storm of Elop's making," she predicted.

Nokia will still "be able to churn out 'dumb' phones, but you can expect feature creep to make even 'dumb' phones smarter," Hudson added. "Eventually, Nokia will be paying a Microsoft tax for all but the 'dumbest of the dumb,' hurting its ability to compete in what is now its biggest product category."

The only question left to ask, Hudson concluded, is, "Is this Microsoft's secret plan to get back at the Finns for producing Linus Torvalds?

source at: http://www.technewsworld.com