Practical realities

When Stephen Elop said that the smartphone market is “now a three-horse race” he cast Nokia and Microsoft in unfamiliar roles. It was a loaded observation because, implicit in his statement (and explicit in that now famous memo), was the admission that Apple and Google, and the ecosystems they have built around their device platforms, have become the smartphone establishment. Nokia and Microsoft, so used to their status as steadfast incumbents, now find themselves positioned effectively as newcomers, seeking to disrupt the status quo.

I can’t think of another industry initiative, present or historical, that more ably demonstrates the adage that necessity is the mother of invention. Nokia simply had no choice.

It couldn’t go with Android because it would have been hopelessly late to the game, with no chance of assailing the leads of Samsung and HTC in a short enough space of time to make itself a player again. And it couldn’t work up its own offering—internal platform development was not so much Meego as no-go.

That Nokia’s competitors had established a lead in the Android space at all is due in part to the time Microsoft spent reworking its play and developing WP7. This forced its key vendor partners, HTC in particular, into the Android ecosystem where they now find themselves perfectly comfortable.

So Nokia and Microsoft share an isolation in the smartphone space that makes their alliance a practical one. They now have to work to make the marriage happy and fruitful.

What they must do is play to their strengths. Obviously Nokia will not want to be seen simply as Microsoft’s favourite assembler, and there was much talk at today’s announcement of the bilateral benefits of the alliance in software and service terms. Steve Ballmer was careful to say that Nokia would develop on top of WP7, while Nokia made vague mention of areas of expertise, including imaging. And then there’s Nokia Maps, which will be bundled into Bing.

That’s just soothing babble, though. What Nokia really brings to this alliance is capability at manufacturing and distributing mobile phones in vast quantities and a substantial, loyal user base. If it had something really important to add to the platform, after all, it would have developed its own. No, what Microsoft gets out of this is a route to market.

So Nokia has to trust in the platform and UI that its new partner has developed—not least because time is in very short supply. Nokia’s predicament is good news for Microsoft, because the Finnish firm will not be able to afford to mess around with the Microsoft experience too much, which is exactly how the software giant wants it.

The trade-off for Microsoft will surely be a cooling in its relationship with the rest of the handset players. It’s difficult to see how its partnership with Nokia can do anything other than alienate them. Rival handset vendors didn’t like Symbian because it was Nokia’s sole play and therefore the Finnish firm had more to gain from its success than they did. Why should they feel any different about Windows Phone, now that it will be synonymous with Nokia?

That might not be a bad thing, for all the conciliatory words from Ballmer and Elop about the importance of other vendors in the ecosystem. This alliance is going to focus the handset sector even more, and other vendors would be foolish to dismiss it. Microsoft and Nokia have the skills to develop and market sector-leading products. We’ll just have to wait and see whether they’ve got the execution.

If Nokia’s predicament tells us anything, it tells us that nothing is permanent. And that includes the leadership of Apple and Google. It might not be Nokia and Microsoft that unseat them, but it will happen one day.

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