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View Full Version : Nokia and Microsoft Announce Plans for a Broad Strategic Partnership to Build a New Global Mobile Ecosystem


Jason Dunn
02-11-2011, 04:03 PM
<p>More analysis of what this means will come later, but for now, here's the official press release.</p><p><em>LONDON - Feb. 11, 2011 - Nokia and Microsoft today announced plans to form a broad strategic partnership that would use their complementary strengths and expertise to create a new global mobile ecosystem. </em></p><p><em>Nokia and Microsoft intend to jointly create market-leading mobile products and services designed to offer consumers, operators and developers unrivalled choice and opportunity. As each company would focus on its core competencies, the partnership would create the opportunity for rapid time to market execution. Additionally, Nokia and Microsoft plan to work together to integrate key assets and create completely new service offerings, while extending established products and services to new markets.</em></p><p><MORE />&nbsp;</p><p><em>Under the proposed partnership:</em></p><ul><li><em>Nokia would adopt Windows Phone as its principal smartphone strategy, innovating on top of the platform in areas such as imaging, where Nokia is a market leader.</em></li><li><em>Nokia would help drive the future of Windows Phone. Nokia would contribute its expertise on hardware design, language support, and help bring Windows Phone to a larger range of price points, market segments and geographies.</em></li><li><em>Nokia and Microsoft would closely collaborate on joint marketing initiatives and a shared development roadmap to align on the future evolution of mobile products.</em></li><li><em>Bing would power Nokia's search services across Nokia devices and services, giving customers access to Bing's next generation search capabilities. Microsoft adCenter would provide search advertising services on Nokia's line of devices and services.</em></li><li><em>Nokia Maps would be a core part of Microsoft's mapping services. For example, Maps would be integrated with Microsoft's Bing search engine and adCenter advertising platform to form a unique local search and advertising experience</em></li><li><em>Nokia's extensive operator billing agreements would make it easier for consumers to purchase Nokia Windows Phone services in countries where credit-card use is low.</em></li><li><em>Microsoft development tools would be used to create applications to run on Nokia Windows Phones, allowing developers to easily leverage the ecosystem's global reach.</em></li><li><em>Nokia's content and application store would be integrated with Microsoft Marketplace for a more compelling consumer experience.</em></li></ul><p><em>"Today, developers, operators and consumers want compelling mobile products, which include not only the device, but the software, services, applications and customer support that make a great experience," Stephen Elop, Nokia President and CEO, said at a joint news conference in London. "Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivalled global reach and scale. It's now a three-horse race."</em></p><p><em>"I am excited about this partnership with Nokia," said Steven A. Ballmer, Microsoft CEO. "Ecosystems thrive when fueled by speed, innovation and scale.The partnership announced today provides incredible scale, vast expertise in hardware and software innovation and a proven ability to execute."</em></p><p>&nbsp;</p>

virain
02-11-2011, 04:12 PM
I am really looking forward to see first Nokisoft phone, I hope Nokia brings in some very valuable features to WP7, s.a. front facing camera, ability to record phone calls, quality of a hardware, btw, I didn't use Nokia phones since mid 1990-s :)

Lucy
02-11-2011, 05:24 PM
I am really looking forward to this union, also. I have been struggling with my decision for a windows phone 7 or a nokia n8 for my new upgrade. Now, if I wait a bit, I will have both wants filled. This is good news for me.

Fritzly
02-11-2011, 05:29 PM
It will be interesting to see what will happen: Nokia OS has always been a very open and flexible one; I wonder how users will react to a very locked down OS as WP7.

Fritzly
02-11-2011, 05:30 PM
Oops, never mind:

Quote
We have established a relationship with Microsoft that allows Nokia to jointly drive the future of Windows Phone 7. To jointly define the language, functions and customizations that you’ll see in the future of Windows Phone 7. To have unique access to and the ability to do unique differentiating things relative to Android around software design, chipset support, and display configuration. And, of course, to ensure that it is competitive to Android and Apple.

At the same time we have to make sure we can differentiate within the Windows Phone ecosystem. Nokia has exclusive technologies – one example is our camera technology that you see on the N8 – and, because of this unique relationship with Microsoft, contribute capabilities like that to a Nokia Windows Phone 7 phone that you will not see on any other Windows Phone device.

We have the ability to do customizations and extensions to the software environment that are unique and therefore differentiate. It’s very important to understand this is not a standard OEM agreement. Microsoft is placing a big bet on us.
Unquote

Lee Yuan Sheng
02-11-2011, 05:54 PM
Translation: New phones from this alliance only coming out next year. :P

Jason Dunn
02-11-2011, 05:59 PM
Translation: New phones from this alliance only coming out next year. :P

Honestly? I wouldn't be surprised to see them holiday 2011. Microsoft now has a standardized hardware spec that simplifies the process of bringing a phone to market. And since Nokia has acknowledged their "platform is burning" I think they'll move with reasonable speed.

Janak Parekh
02-11-2011, 08:42 PM
Honestly? I wouldn't be surprised to see them holiday 2011. Microsoft now has a standardized hardware spec that simplifies the process of bringing a phone to market. And since Nokia has acknowledged their "platform is burning" I think they'll move with reasonable speed. The question is, if they do somehow manage to launch for holiday 2011 (and, honestly, I have to agree with Yuan here: moving a large ship like Nokia takes time, plus they have to rebuild carrier contracts and other things), what will they launch? If they launch just "another" Windows Phone, it'll reflect poorly on them.

Keep in mind that, before Nokia launches their first Windows Phone, we'll see the launch of a new iPhone, a new Android phone OS (most likely), and a slate of new HP webOS devices.

No, they need to dazzle. That's quite the challenge.

--janak

Janak Parekh
02-11-2011, 08:45 PM
We have the ability to do customizations and extensions to the software environment that are unique and therefore differentiate. It’s very important to understand this is not a standard OEM agreement. Microsoft is placing a big bet on us. Thanks for pasting this here, Fritzly - I'm curious how this will affect MS's OEM relationship with Samsung and HTC. They can't be thrilled to see Nokia come into the picture, with "preferential" treatment, right?

This is going to get very interesting.

--janak

T_Scheen
02-11-2011, 09:23 PM
Translation: New phones from this alliance only coming out next year. :P

Couldn't agree more.
Two ducks don't make an eagle !

Game Over - Sorry.

Nelson Ocampo
02-11-2011, 09:56 PM
I don't think it will affect the relationship with Microsoft's other OEMs negatively. At least not in the short term.

Nokia is going "all in" with WP7. Other OEMs are just dipping their toes in. Of course Nokia is going to get preferential treatment. If Samsung were to fully commit to WP7, I'm sure they'd get something similar. Though probably not to the level of Nokia because... well... Nokia is Nokia.

I believe that other OEMs may actually be somewhat excited about this announcement.

Why?

1) It is in Nokia's best interest to maintain the ecosystem. That means no fragmentation. No custom versions of WP7 that will only run on Nokia hardware.

2) Nokia innovates in hardware. Nokia having the ability to submit source code to MS for supporting hardware features will eventually also benefit other OEMs. If Nokia comes out with a phone that has 4 cameras and reads eyeball movements (ok, ridiculous, but just for illustrative purposes), well, then that support will be built into the OS. And then later other OEMs will be able to make devices that make use of those features.

Janak Parekh
02-11-2011, 10:37 PM
I don't think it will affect the relationship with Microsoft's other OEMs negatively. At least not in the short term. Agreed.

Nokia is going "all in" with WP7. Other OEMs are just dipping their toes in. Of course Nokia is going to get preferential treatment. If Samsung were to fully commit to WP7, I'm sure they'd get something similar. Though probably not to the level of Nokia because... well... Nokia is Nokia. That's my point. Samsung and HTC are gaining huge wins with Android -- in fact, Google has partnered with both for Nexus devices -- so I wonder if they will ask themselves what horse they want to bet on first.

1) It is in Nokia's best interest to maintain the ecosystem. That means no fragmentation. No custom versions of WP7 that will only run on Nokia hardware. If that's true, at the same time, this diminishes Nokia's stature. They become just another OEM. The text that Fritzly posted suggested that this is not quite what Nokia will do, that this is a two-way relationship.

2) Nokia innovates in hardware. Nokia having the ability to submit source code to MS for supporting hardware features will eventually also benefit other OEMs. If Nokia comes out with a phone that has 4 cameras and reads eyeball movements (ok, ridiculous, but just for illustrative purposes), well, then that support will be built into the OS. And then later other OEMs will be able to make devices that make use of those features. Again, wouldn't Nokia want to differentiate themselves? If everything they develop becomes available to their competitors, it diminishes their unique value proposition. Granted, they're a fantastic engineering company, but, e.g., HTC has been steadily catching up from far behind, and remember, HTC even has a lead in the WP7 device business. Some of the most recent Windows and Android phones are pretty damn awesome.

--janak

Nelson Ocampo
02-11-2011, 11:20 PM
That's my point. Samsung and HTC are gaining huge wins with Android -- in fact, Google has partnered with both for Nexus devices -- so I wonder if they will ask themselves what horse they want to bet on first.

I'm not sure if HTC or Samsung even think they have to bet on one or the other. They could keep their feet in both pools for as long as they want, adjusting percentages based on what the market tells them.

If that's true, at the same time, this diminishes Nokia's stature. They become just another OEM. The text that Fritzly posted suggested that this is not quite what Nokia will do, that this is a two-way relationship.

Again, wouldn't Nokia want to differentiate themselves? If everything they develop becomes available to their competitors, it diminishes their unique value proposition. Granted, they're a fantastic engineering company, but, e.g., HTC has been steadily catching up from far behind, and remember, HTC even has a lead in the WP7 device business. Some of the most recent Windows and Android phones are pretty damn awesome.

--janak

I believe that the key to Nokia differentiating themselves will come from being the first to market with each new WP7 hardware innovation.

If Nokia creates changes in WP7 that allows support for a new hardware innovation, that code won't be made available to other OEMs until the RTM of update right before Nokia is ready to release their product. That will give Nokia at least a few months of exclusivity.

Lee Yuan Sheng
02-12-2011, 02:05 AM
Given the complexities of starting over, and the sense of vagueness throughout the news itself, even holiday 2011 feels like a stretch. I suppose MWC next week will be the test. If there is prototype hardware, 2011 is looking good. If it's just mockups...

I'm thinking about how this will work. Nokia has to preserve its own unique features in software, but WP7 is meant to be standardised. What is Nokia going to do that it doesn't become another Palm?

Janak Parekh
02-12-2011, 06:06 PM
I believe that the key to Nokia differentiating themselves will come from being the first to market with each new WP7 hardware innovation.

If Nokia creates changes in WP7 that allows support for a new hardware innovation, that code won't be made available to other OEMs until the RTM of update right before Nokia is ready to release their product. That will give Nokia at least a few months of exclusivity. Except, as Yuan said, Microsoft made a huge design decision with WP7 to keep centralized control and keep OEMs in line, after years of a fragmented platform with Windows Mobile.

We'll have to wait and see how this shakes out -- I'm not sure yet what Nokia will and will not be able to do. The blogosphere has been reporting mixed messages from them.

--janak

Paragon
02-13-2011, 05:02 PM
Except, as Yuan said, Microsoft made a huge design decision with WP7 to keep centralized control and keep OEMs in line, after years of a fragmented platform with Windows Mobile.

We'll have to wait and see how this shakes out -- I'm not sure yet what Nokia will and will not be able to do. The blogosphere has been reporting mixed messages from them.

--janak

Elop has stated quite clearly that they have the ability to customize as they wish. Now he also stated that they are going to be very careful about how they do that, but that sounds a lot like a statement Microsoft would have drawn up for HTC, Samsung, and LG's benefit.

Most importantly. why would they even bother to negotiate in that flexibility if they didn't intend to use it to their best advantage? Especially knowing how hard Microsoft would have fought that point, more than any other.

Personally I see this as game saver for the platform. I think Nokia will bring the necessary changes to this platform to make it successful in time. I think it is a fantastic thing for the consumer. However, I don't think it is such a good thing for Nokia.

We all know that Nokia had to do something. That doesn't mean they had to do this. Think about this for a minute.....last week Nokia was the worlds largest cellphone manufacturer. They also had the leading platform in the world. This week they are a subordinate partner with Microsoft. If their marketshare was on a steep decline before this, that slope just became vertical. They have stated they don't intend to launch a device till 2012. So for the next year they will only see a steady decline in revenue and market. Not until they launch their first device will they be able to hopefully start to claw and fight to regain any of what they had.....and it is all a big roll of the dice.....and in the end they will still be a subordinate partner to Microsoft.

Inviting someone from the evil empire (as Nokia sees Microsoft) in as CEO, who then invites the whole evil empire in, then fires their US president and replaces him with a Microsoft executive does not sit well with many people. Nokia's stock plummeted 14% on Friday, and 1000 people walked off the job. Yes, they walked off the job. They were not told they could have the rest of the day off, they walked off.

I think we all realize Nokia needed a good shake up. Unfortunately for Nokia, this wasn`t a shake up, it was a shake down, which is going to take them a very long time to recover from.

Again, big changes were needed, but think how different those changes would be if just one factor was changed.....someone other than a Microsoft employee wasn`t installed as CEO. I`m not sure what could have possessed the Board of Directors of Nokia to take on such an initiative.

Dave

Jason Dunn
02-14-2011, 05:54 PM
We all know that Nokia had to do something. That doesn't mean they had to do this. Think about this for a minute.....last week Nokia was the worlds largest cellphone manufacturer. They also had the leading platform in the world. This week they are a subordinate partner with Microsoft. If their marketshare was on a steep decline before this, that slope just became vertical.

I think you're being overly dramatic Dave. First, Windows Phone 7 is going to be Nokia's smartphone platform moving forward - but they're still going to be selling their other lower-end phones. Windows Phone 7 doesn't scale to other form-factors very well, and it requires a touch screen. It's not like Nokia is going to stop making every phone currently on the market and replace them with Windows Phone 7 devices overnight. I'm sure their current line of Series 60 phones will continue to be sold for a while longer.

I think this week with MWC we'll see more clarity around what Nokia is going to be doing.

Nelson Ocampo
02-14-2011, 07:17 PM
Elop has stated quite clearly that they have the ability to customize as they wish. Now he also stated that they are going to be very careful about how they do that, but that sounds a lot like a statement Microsoft would have drawn up for HTC, Samsung, and LG's benefit.

He also stated quite clearly that it is in Nokia's best interest for WP to continue to be supported by multiple manufacturers.

He also stated that innovations from Nokia would also end up benefiting other OEMs.

So, it sounds to me like whatever changes or feature additions Nokia plans to make with WP will be weighed with its impact on the whole ecosystem. The more fragmented that ecosystem becomes, the worse off Nokia will be in the long term. So it is in their best interest to keep the ecosystem consistent.

Most importantly. why would they even bother to negotiate in that flexibility if they didn't intend to use it to their best advantage? Especially knowing how hard Microsoft would have fought that point, more than any other.

In my eyes, the reason Nokia would want this ability is so that they wouldn't have to wait for Microsoft to develop drivers or other needed OS functionality for things that Nokia would want to implement in their phones.

Nokia could design things with the idea that if it isn't currently supported, they could just build in that support.

That support would also make its way into the core OS, and other OEMs would also benefit from it. (Though other OEMs would have to wait until those changes are packaged into an OS update)

Personally I see this as game saver for the platform. I think Nokia will bring the necessary changes to this platform to make it successful in time. I think it is a fantastic thing for the consumer. However, I don't think it is such a good thing for Nokia.

We all know that Nokia had to do something. That doesn't mean they had to do this. Think about this for a minute.....last week Nokia was the worlds largest cellphone manufacturer. They also had the leading platform in the world. This week they are a subordinate partner with Microsoft. If their marketshare was on a steep decline before this, that slope just became vertical. They have stated they don't intend to launch a device till 2012. So for the next year they will only see a steady decline in revenue and market. Not until they launch their first device will they be able to hopefully start to claw and fight to regain any of what they had.....and it is all a big roll of the dice.....and in the end they will still be a subordinate partner to Microsoft.

Transition periods are always rough. No matter what new OS they chose, there would still be that transition period of phasing out Symbian. Symbian was going nowhere but down.

And I don't know why you consider Nokia a subordinate partner. MS had to make special concessions for Nokia. Nokia has a lot of power in this relationship. They are equal partners.

Inviting someone from the evil empire (as Nokia sees Microsoft) in as CEO, who then invites the whole evil empire in, then fires their US president and replaces him with a Microsoft executive does not sit well with many people. Nokia's stock plummeted 14% on Friday, and 1000 people walked off the job. Yes, they walked off the job. They were not told they could have the rest of the day off, they walked off.

Nokia doesn't see MS as an evil empire. Maybe some employees do. But that's everywhere. People like to make MS out as the villain.

But keep in mind that the CEO wasn't making these decisions. The entire board of directors makes these decisions. It just makes for better drama saying it was Elop.

Also, note that before the 14% drop, there was around a 20%+ gain the three months before the announcement because of rumors going around. It's not like Nokia was at a steady stock price and suddenly dropped. Speculators that were anticipating both WP and Android partnerships were driving up the stock price. And when the announcement came, half of those speculators found that they were wrong and jumped ship. Right now, Nokia's stock is around where it was in December right before the rise.

I think we all realize Nokia needed a good shake up. Unfortunately for Nokia, this wasn`t a shake up, it was a shake down, which is going to take them a very long time to recover from.

I see zero evidence of this being a shake down. Do you have any?

Again, big changes were needed, but think how different those changes would be if just one factor was changed.....someone other than a Microsoft employee wasn`t installed as CEO. I`m not sure what could have possessed the Board of Directors of Nokia to take on such an initiative.

Dave

Who knows what would have happened. Perhaps it was Elop's connections that helped Nokia get so many concessions from Microsoft that other carriers didn't get.