Questions & Answers

Nokia has got into bed with Microsoft, taking on Windows Phone 7 as its primary smartphone operating system (OS), and has also announced a plan to get low cost devices on the platform out to developing markets to get more people online. Nokia also has plans to migrate hundreds of millions of current Symbian device users over to phones set to be jointly developed by the handset manufacturer and the software megalith.

Do you think this venture will work for both companies? Could this deal get Nokia out of hot water in the smartphone arena, where it has basically failed to make any headlines, and to get Microsoft’s mobile OS into the limelight, where it has failed to make it thus far?

Amardeep Kalsi, Arrow Mobile Communications product specialist: Arrow believes that the announcement from Nokia on using Microsoft’s Windows Phone 7 OS is definitely a step in the right direction. Nokia itself has admitted (and from the top) that its Symbian platform is a burning rig and they need to jump sooner rather than later. In the last five years there have not been any vast improvements to an OS that has been ailing for some time. Apple showed the market the way on how easy a mobile OS has to be to use for the end user, and Google followed that cue brilliantly with Android.

As for Microsoft, it took it a while get to the same stage, but with the Windows Phone 7 they have an OS that is very much geared for the market Nokia was attacking with its Symbian OS. This can only be a good thing.

As for whether this venture will work for both companies, we will have to see. But we can definitely see it working for Nokia, which needed an OS that was up to scratch, not only in the enterprise market but also in the consumer space. As for Microsoft, well it basically has one of the best design houses now working on its OS, and with Nokia’s past of creating iconic handsets, between them they might be able to create a handset that really does stick out from the crowds. Just like the Sony Ericsson Arc is to Google’s Android OS. Let’s hope that Nokia can do Microsoft’s OS justice.

Amardeep Kalsi, Arrow Mobile Communications product specialist

This will definitely put Nokia back in the playing field with the likes of Sony Ericsson, Motorola, Apple, HTC and the rest. There are already a plethora of handsets from various manufacturers out there that use the Windows Phone 7 OS. So the pressure is definitely on Nokia to get this working and produce something that is different from the rest of Windows Phone 7 market.

As for Microsoft Mobile OS, what we’ve had so far from the likes of HTC and LG in regard to handsets for Windows Phone 7 have been very similar to their Android offerings; no real changes in style or spec of devices. Microsoft has now got itself a dedicated design house to create something really special for it to showcase its OS, and show people what it really is capable of doing.

Dr. Ekkehard Stadie, Simon-Kucher & Partners’ partner: The announcement that Nokia and Microsoft were teaming up was not a real surprise. It was one of very few options for two companies that have so far failed to jump on the smartphone train.

There is no doubt that the smartphone market and hence the market for operating systems will experience significant shifts in the near future. We are seeing the first indications of this. In a nutshell, Google and Apple will be the winners, Blackberry and Nokia/Microsoft will face cloudy to stormy weather.

With a strong premium position, Apple will be predominant in the mid to high end market. Mass market will be dominated by Google. Google is the internet company that knows best how to make money with digital products and how to strive for high marketshares. Apple approaches the situation from a different angle (handset, usability, brand).

It is no surprise that, according to global research agency Millward Brown, both brands have the highest value in the world. Apple and Google are strong on their own; their future success will continue to be fuelled by the weaknesses of remaining competitors.

Dr. Ekkehard Stadie, Simon-Kucher & Partners’ partner

RIM with its BlackBerry lacks real innovation. It is still a great product, but it has basically lost its lustre amongst users. Users just perceive it as a commodity. Its core email service is a perfect example of an innovation with a limited lifecycle. If the company then misses out on other innovations (hardware, content), the loss in market share is a logical consequence.

Nokia is in a slightly better position; if the organisation can change and adapt quickly enough, and if it is able to address the low cost smartphone segment, it would hit one of the strongest growing market segments.

The strategy is good, but the real challenge is the implementation. Have you ever seen a premium incumbent airline that is really successful with a second low cost brand?

Content-wise, Nokia faces a marketing challenge.

The cooperation with Microsoft gives it access to the office software and the Xbox. Sounds interesting, but only at first glance. Gaming is a segment, but only a niche business. Microsoft Office targets a different segment. But is working, not reading, with MS Office on a smartphone really the most desired application? I doubt it. The cooperation helps both companies to improve, but it does not help to close the gap. Google/Apple and Nokia/Windows 7 will continue to grow at two completely different paces.

Chris Earle, Unicom operations director: The announcement of Nokia and Microsoft teaming up didn’t come as a surprise. Nokia is known for the excellent hardware it produces, but it has failed to innovate with its software. Microsoft has produced a slick, easy to use, very modern mobile operating system, but has so far failed to gain the traction it craved following launch. It seems the perfect time to put the two together.

Since launch, iOS and Android have led a creative revolution within the mobile experience, raising the quality of user expectations so quickly that when Nokia launched what should have been cutting edge, industry leading handsets, they appeared dated as soon as they hit the shelves.

This venture is therefore common sense, considering Nokia has failed to quickly and decisively respond to the Apple/Google threat and Microsoft needs someone to push Windows Phone 7 into the mass market.

Nokia will benefit hugely by gaining an intuitive, easy to use and fantastic looking mobile operating system, which will allow it to produce a truly stunning high end mobile device (something it has failed to do for some time,) and one that could finally compete with the current user favourites.

The market has shifted away from consumers wanting a specific brand of mobile, to wanting a specific brand of mobile operating system. In the growing market of identikit Android phones, a Nokia/WP7 phone will truly stand out as different.

Chris Earle, Unicom operations director

To fully benefit from this venture, Microsoft must be willing to adapt WP7 to work on lower end devices, an area Nokia dominates and which is relatively free of competition. Such a strategy could finally open the door for WP7 to gain a foothold and start to build a substantial user base, and must surely appeal to the company that already has a history of marginalising Apple via mass market adoption.

From a user’s point of view, this move is welcomed and seen as very positive. Having three popular mobile operating systems will further fuel the innovation of all three companies and could lead to a golden age of mobile user interfaces.

Andy Tow, Avenir Telecom managing director:This partnership is definitely going to be one to watch this year. With yet another two power brands combining in the industry to ultimately offer more to the customer, the Nokia/Microsoft alliance is a sensible move to allow them to more effectively compete in this fast and everdeveloping market.

With Nokia in a position to produce the volume of handsets quickly, combined with Microsoft’s power to achieve the sales, this will most certainly put both companies in a strong standing to make an impact.

This has come at a perfect time for both businesses, who have identified that now is the time to join forces, before the market becomes saturated. Among the speculation regarding how competitive a solution this is going to be, the plan for low cost alternatives may actually position this brand in a market that would otherwise have been untapped and ultimately result in wider appeal for all suppliers in the industry.

Undoubtedly, the combination of budgets and the motivation from both sides to achieve will more than likely mean that we will be seeing a lot more of the Nokia/Microsoft brand. Large advertising spends and raising brand awareness will surely be a key strategy for both teams. However, the BlackBerry team already has fantastic products and large advertising budgets so it will be interesting to see how things progress.

Andy Tow, Avenir Telecom managing director