Technophobe: Nokia's Gamble

Megan Youngren/Sun Star Columnist
September 18, 2012

At some point, many people have owned a Nokia phone. Probably not recently, because the giant Finnish cell phone manufacturer took its time moving into the modern smartphone market. Why aren’t there durable, inexpensive and simply built Nokia phones running Android? Samsung, HTC and LG occupy the price range where Nokia should be competing. None of them build a phone quite as well. So, where’s Nokia?

Stephen Elop, the former head of the Business Division of Microsoft, is now the CEO of Nokia. At best, it’s suspicious for an upper management person to leave Microsoft and have their new employer Nokia implement a plan that takes upon itself the entirety of the risk. Nokia’s new strategy is make or break because every alternative has been dumped. The company now makes Windows Phones, and not much else.

Nokia Lumia 900 image from the nokia.com website.

Nokia’s fate is now intertwined with Microsoft, whose bottom line is barely affected if Nokia fails. Nokia has laid off 15,000 workers, shut down its last factory in Finland and given overall control of their software away. The whole company depends on Microsoft’s mobile phone ambitions.

Nokia was actually the company behind some of the first smartphones, running the Symbian operating system. Symbian was showing its age by the release of the iPhone and Android. Nokia took too long to move forward from Symbian.

The successor to Symbian was a Linux smartphone system called Meego, which was developed in-house. The phone that was planned to showcase Meego looks almost the exact same as the company’s first Windows Phones. It was released quietly internationally, not in the United States at all and was then quickly forgotten.

Nokia, is known for its widely available cheap and durable third-world friendly phones. The company cannot stay profitable from its basic or ‘dumb’ phones, but they can subside off of them for the time being.

Microsoft can’t save Nokia if the Windows Phone platform fails. Nokia and Microsoft are both in a tough spot in this field, as Microsoft entered the market three years after the iPhone and two years after Android. But this is Nokia’s only field, and Microsoft would be able to survive a failure of their phone business. There aren’t any Nokia Android phones, though they would probably sell well. 

The whole setup depends on people wanting Windows Phones, but so far not many do. That’s too bad, because Windows Phone 7 is a slick operating system. The new version, Windows Phone 8, shares more than just a number with the mainline Windows. An app written for the phone can technically be run on the computer and vice versa. It’s nearly guaranteed that by the time Windows 8’s app store is well populated, so will the one for the phone. That solves the problem of ‘no users, no apps’ that Blackberry and HP faced with their phones.

Since Nokia no longer produces the main software, they focus on a few Nokia exclusive apps such as Nokia Music and City View. One of the only signs that Microsoft is as deeply invested as Nokia in this relationship is that their Bing Maps service is now called Nokia Maps, and uses some of Nokia’s mapping technology.

Nokia could find a new place as the premier Windows Phone manufacturer. The tie-in with Windows 8 and their potentially huge market share would keep Nokia a profitable and successful company, but it seems more likely that the Windows Phone will fail and take Nokia down with it.

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