Nokia Microsoft marriage is the end of Nokia’s handheld business

Nokia and Microsoft announced a partnership today. Together they will form a smartphone alliance. The high end profitable market of Nokia smart phones is moving to the Windows mobile platform. Nokia will move the Symbian platform which they used exclusively up until now to power the mid and low range models.

The effect of this decision is very profound for Nokia and Microsoft. For Microsoft it finally opens up the market for smart phones for them. Nokia’s market share is still very sizable. For Nokia on the other hand it will move them into a hardware maker. The implementation of Windows mobile will lead to margin erosion on their handheld business. Even if they manage to be a huge player in the smartphone market and become successful with bring Windows mobile handsets to the market they will lose anyway.

There is no exclusivity in the Windows mobile platform. When it Is successful other handset players will enter into this market too. The added value Nokia will bring is limited to the quality of their hardware. Any add on service or software they bring will be copies any of the other handheld makers or Microsoft themselves.

The only company who wins in this marriage is Microsoft. Nokia has nothing to gain from this deal and can only loose. Either the platform is not successful and they will lose even more market share. Or the platform is successful and other companies will jump in and erode the market for Nokia.

The future for Nokia is now very bleak. Most likely it will end the Nokia handset business in a few years — possibly 5 years from now. Nokia will sell its handheld business to a competitor who is interested in the hardware technology Nokia created. Most likely an Asian company will take over and use it to jumpstart their handheld business or bring it to a higher level.

It is decisions like this which makes you wonder what the board of Nokia was thinking at the time when they brought in Elop. I am sure they are scratching their head right now since Nokia’s shares went down from $12 to $9 in 2 days.

Future platforms

Google, Apple, Facebook and Amazon (GAFA) are now the most valuable and successful companies in the …

What is here today might not be there tomorrow

Checks and balances on new products

Yesterday, the Jibo robot shut down permanently. It was marketed as a social robot, I never owned on…

Market saturation on a different scale

Peak attention

We’ve reached peak attention on the internet. As you can see from the graph below, the time spent on…

10,000 connections for each of our 10 billion brain cells

Why AI is hard

Artificial intelligence was one of the first buzzwords I can remember from the previous century. It …