That Nokia Thing

By | February 2, 2011

Stephen Elop spent two and a half years at Microsoft as head of their business division (aka Microsoft Office). Is 2.5 years enough to build up a serious loyalty and/or a fear of Ballmer? It’s a salient question when you try to decode some of the signals Elop is sending as CEO of Nokia.

More connected people than myself have wrung hands over Elop’s “ecosystem” comment during an earnings call:

[quote]”Nokia must compete on ecosystem to ecosystem basis. In addition to great device experiences we must build, catalyse or join a competitive ecosystem. And the ecosystem approach we select must be comprehensive and cover a wide range of utilities and services that customers expect today and anticipate in the future”[/quote]

The popular conclusion is that Nokia is going to announce a new smartphone OS partnership. The question is: Android or Windows Phone 7?

Ok settle down. You can stop yelling about how much of an idiot I am, and consider these things:

  • Google’s app store is broken. They’ve as much as admitted it themselves.
  • The iPhone’s app store is not broken, and the attach rate is stupendous, by any measure.
  • The Windows Phone 7 UI experience and app store approach is closer to Apple than Google.

So, if you were to choose an ecosystem to go with based on future app earning potential which one would you bet on?¬†You could go either way, but here’s what I’d do if I were in Microsoft’s position right now:

  • Free WP7 licenses for Nokia.
  • A deal giving Nokia a slice of the App revenue.

Remember, Nokia would get the same (or better) OEM treatment as other Windows Phone 7 OEMs. They can build native apps in C++ for their phones. They can keep the device revenue (and that’s all they have currently). They could, quite conceivably, build and lay claim to the best Windows Phone 7 experience on the market. They’d compete head to head with HTC, LG, Samsung, all the while growing revenue and growing Microsoft’s app ecosystem.

If Elop choses Android, it’s a huge kick in the face for Microsoft. Would he do that?

3 thoughts on “That Nokia Thing

  1. rob-nz

    A couple of things:

    Firstly, I agree it would make most sense for Nokia to go after teh emerging WP7 market, as the Android hw space is already heavily populated, with Samsung and HTC owning the non-US markets and Motorola dominating in the US.

    However, I think the referenced article about the Android Market being ‘broken’ needs some context.

    Firstly, the stats are somewhat out of date. (As they no doubt are for the app store as well…it’s a fast moving target)

    Currently Androlib is showing an informal tally of close to 140,000 apps in the Android Market, with about 3.3 billion downloads.

    The cumulative stats have over 200,000 apps have been published, presumably there has been some natural attrition over time.

    Publishing rates are about 30,000/month and they’ve grown month on month

    http://www.androlib.com/appstats.aspx

    However, the ratio of paid apps to free apps is only about 1/3 paid, 2/3 free

    http://www.androlib.com/appstatsfreepaid.aspx

    This has been fairly constant for some time and one reason may have been that until late last year only publishers in Western Europe an the US were able to sell apps and not many more were able to buy them.

    This changed recently and now its up to 32 countries can purchase apps and 29 countries can have paid developers
    http://android-developers.blogspot.com/2010/09/more-countries-more-sellers-more-buyers.html

    I think it will take a little while to gain some momentum on the paid app side and meanwhile Google and developers have been raking in pretty decent amounts of money from the free apps via AdMob

    If Google are being aggressive and hiring app devs it suggests to me they are being proactive. After all, apple develop some iphone and ipad apps themselves.

    Reply
  2. Pingback: Windows Phone 7 Distribution by Device and Country | Ben.geek.nz

  3. Harvey

    Personally I think Nokia are in for a world of trouble with their decision to go WP7 over Android. They should be doing BOTH, and they shouldn’t have faffed around thinking about it for so long.

    A lot of people would agree that Nokia make the best handsets – which would make it really easy for them to take back customers that have switched to a HTC / Samsung / whatever and had a mediocre experience (the reception and clarity on my old Nokia is far better than my new Nexus One).

    Android has plenty of faults, but none of them are terminal. I’d wager Android would be a whole heap better running on some decent Nokia hardware.

    By all means good luck to Nokia – I’m a staunch supporter, but I wouldn’t consider switching to WP7 to enjoy that Nokia goodness again.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *