CyberTech Rambler

March 9, 2011

Nokia paid to use Windows Phone 7

Filed under: Uncategorized — ctrambler @ 2:48 pm

News story alleged that Microsoft paid Nokia to use Windows Phone 7.

No surprise for Microsoft watchers. Windows Phone 7 take up is, to my surprise, extremely low. It needs a big partner and Nokia is a big catch. Microsoft is not shy of using its financial might to help adoption of its technology. If you need another example, see the Microsoft-Novell agreement.

For Nokia, I see it as another bet-the-company movement. Unlike Marconi, whose bet-the-company moment (selling off its crown jewel (defense and wireless business to become a ‘communication’ company) flopped and leads to years of financial struggle. Nokia’s first bet-the-company moment (concentrating on mobile phones and not making toilet papers) paid off handsomely by turning it into a mobile phone giant.

A few years ago, Nokia is doing well in mobile phone business. The arrival of IPhone, and the rise of contract-manufacturers such as HTC to branded competitors means Nokia’s star is fading. To arrest it it needs some bold rethink and this is definitely one of it.

The bet is Windows Phone 7 will become popular putting Nokia in the position to ride the wave. So far, Windows Phone 7 adoption rate is far below expectation. That is what created the opportunity for a Microsoft payment and Nokia took it. Windows Phone 7, although still  rudimentary by smart phone OS standard and is still paying catchup, with Nokia’s expertise and Microsoft might, it can still be a competent competitor one day in the yet-to-be-decided  operating system wars for smart phone.

Like Microsoft-Novell agreement, this deal is more risky for Microsoft partners than Microsoft. Both deals make sense for the Microsoft partners. Whether it works for the MS partner depends on the skill of the MS partners to get the best out of it. In Novell’s case Novell probably did not get as much as it could, hopefully Nokia will fair better, much  better.

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