Following the leak of the burning platform memo by Nokia’s Stephen Elop, the man himself has made the big announcement at Nokia’s Strategy and Financial briefing to place Microsoft’s Windows Phone (WP) as their primary operating system.

This marks a major shift and change for the company that has been a market leader in the mobile phone industry for a good 15 years or more.

Apple’s entry into the mobile market and Google’s Android were major disrupters in the status quo of the mobile market. Nokia’s slowness to respond to this change has led to a loss of the high end market sector and a loss in mindshare.

Nokia had two options. One was to go on their one and continue with developing the Symbian and MeeGo platforms using the the Qt programming language. The other was to form a partnership with an existing mobile platform. In the mobile world, there are essentially two options out there, Microsoft’s Windows Phone 7 and Google’s Android.

Nokia chose the latter option. A primary reason for this would be the current downgrade in Nokia’s credit rating by Standard and Poor(S&P). If Nokia stayed with Symbian and MeeGo, the time frame for making competitive devices to rival Apple and Google many not have been viable enough.

Nokia was in conversation with Google but the adoption of the Android would led to loss of Nokia’s ability to differentiate themselves from other handset makers such as HTC and Samsung. The Windows Phone platform is new and is dire need of a strong handset maker to back it up. Other handset makers who are in partnership with Microsoft have released somewhat lacklustre WP handsets. It appeared as if the manufacturers such as HTC and Samsung were not going all in with WP as these manufacturers have been more involved with the Android OS releasing key Android devices like the HTC Desire HD and Samsung Galaxy S.

Microsoft’s partnership with Nokia is more integrated than their partnerships with other original equipment manufacturers(OEMs). Microsoft gains a lot from this partnership with  stellar hardware courtesy of Nokia which would attract customers to buying WP based phones. This will be a massive shot in the arm for Microsoft. At the end of the day, it’s all about products.

Nokia losses its independence and ties its destiny with Microsoft. The Nokia Ovi store will be downgraded to the point of non existence and will be assimilated into in the Windows Marketplace. However, the Nokia name will stay and to the consumer, a Nokia phone still carries weight in terms of call and build quality.

The fruits of this partnership will not be seen until 2012. In the meantime, Nokia intends to sell approx. 150 Symbian based handsets. I find that a somewhat impossible target to achieve as the more informed consumers will refrain from buying a Nokia device this year. The lower end phones will not be affected as the phones function as mere phones. However, the higher end devices such as the Nokia N8 and E7 are likely to suffer in terms of sales. The Nokia E7 will suffer the brunt of this change as it is released at a time which marks Nokia’s receding support to the Symbian platform.

There are pro and cons to this radical change which has been dubbed by Engadget as Elopcalyse.

Stephen Elop’s previous connection with Microsoft fuels such conspiracy theories that this move was an All-American coup on a European company. It’s a tantalizing thought but the Elop was left with making a radical choice to react to the changes in the mobile ecosystem. The casualties of this decision are no doubt the staff of Nokia who have worked on Symbian, MeeGo and Qt. Nokia has essentially downgraded itself into a glorified OEM, making shells that house an OS that is driven by another company.

The downside for Microsoft is the potential loss of its other OEM partners. WP is new and can suffer that loss( if it is a considered a loss at all).

The upside to this decision is the possible emergence of a mobile ecosystem powerhouse to rival Apple and Google. This is a long term process and a reliable report card from this partnership will not emerge until mid 2012.

If there is a genuine opportunity here for innovation, I look forward to the fruits of this partnership.

Big changes indeed.

 

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