Markets at work and demise of Nokia as we knew it, at least for now

I don’t own Nokia stock – nor do I work there, but I’ve been shocked with the news about Nokia bending over to Microsoft. Though we do not yet know the details of the strategic partnership it is quite easy to say that this was an excellent deal to Microsoft and rather bleak situation for Nokia.

Only way to really make sense of this all for me is to watch it from large institutional investor perspective and see that by putting assets in Nokia and Microsoft together, you can create third candidate to compete against Apple and Google in the mobile ecosystems and media consumption world. And even though if putting these two assets together would destroy billions of dollars of value in Nokia, in the big picture it could be worthwhile.

This could be potentially good news for operators, media companies and publishers – who want to get leverage against Apple and Google in tough negotiations in the future. Whether it is movies, music, software or games – Nokia hardware, Microsoft operating system and shared ecosystem can be a serious contender if Microsoft is willing to burn money to make it a reality. They sort of succeeded it with Xbox 360 ( + live ).

Microsoft gets finnish mobile knowhow, decades of experience with mobile development and Nokia’s existing contacts and global reach to push Windows Mobile. Nokia’s knowhow and services also nicely complement the Windows Mobile ecosystem with some missing pieces.

Similarly for Nokia this is interesting opportunity to share future R&D and marketing costs together with Microsoft.

And if everything goes well, Nokia can benefit from the large scale success of Microsoft.

I really do hope there is something more to this than meets the eye.

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4 vastausta artikkeliin: Markets at work and demise of Nokia as we knew it, at least for now

  1. daviding sanoo:

    @huima Comparing Nokia in 2011 and IBM circa 2004 can be instructive. Both have/had new CEOs with bold moves. Lou Gerstner ended further development of OS/2, which was a partnership with Microsoft, and eventually saw the rise of Linux at IBM and the Eclipse Foundation. Nokia will be phasing out Symbian in favour of Windows Mobile.

    Most would focus on IBM moving from a private source platform to open source, while Nokia is moving from open source to private source. Most of the news coverage is about the economics of maintaining a development program (i.e. whether Symbian and Meego without license fees are better or worse than having to pay license fees to Microsoft). The stakeholders that are being left out of the discussion are the customers. A market-driven company does what the customers want. OS/2 was not as popular as NT at the point at which it was being discontinued. Symbian is more mature than Windows Mobile, which is more mature than Meego. Between OS/2 and NT circa 2005, customers could choose either. In 2011, will customers choose to buy a Nokia phone, when the platforms have been announced as at end of life (and without a migration plan)?

  2. daviding sanoo:

    Whoops. In the prior post, 2004 should read 1994. Time flies with technology.

  3. huima sanoo:

    Because of the relationship and details of the agreement are unknown to the public ( to investors and end user customers ), this decision looked and felt bad – as it makes Nokia’s situation sound worse than it is – or then again it makes everything sound like Microsoft orchestrated coup d’état rather than real strategic alliance.

    I watched the live events from London and how Elop performed on stage made me seriously feel that this is Microsoft strategy -presentation, not Nokia’s presentation. From my point of view he really missed the opportunity to properly discuss and communicate what this all means to Nokia, rather than what this all means to Windows Phone ecosystem. Hence no wonder the stock freefall.

    What Microsoft and Nokia wants to do makes sense.

    How they communicated it did not.

  4. Paluuviite: What can you still expect from Nokia? | Huima

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