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Mobile World Congress: Nokia Flips the Flop

MWC 2014

Anyone who follows cell phone technology has probably heard of Mobile World Congress, the annual show that serves as a four day launch party for all manner of mobile tech. Generally, this week sees more cell phones announced and previewed than any other single time of the year. It’s like E3 for mobile devices. Keep checking back here for our coverage.

Mobile World Congress is a big deal, and most of the major manufacturers will show up and show off what they’ve been working on. Remember Nokia? Yeah, you know, the guys who made your first cell phone? That brick of a thing that you could buy different faceplates for? Well, those guys have stepped up their game in the past couple of years and brought out their Lumia series of phones. These handhelds feature an unique shape and feel while a great fit and finish. The only thing that really seems like it could be holding the Lumia series back, in general, is the operating system, but more on that later.

Things you may know, but I’ll refresh anyway, is that Nokia is one of only a few cell phone manufacturers who not only build Windows Phone, but who’s handsets were the poster children for the platform. According to the figures I read, Nokia accounted for more than 93% of all Windows Phones sold in Q3 of 2013. Another thing that you may have forgotten is that Microsoft actually bought Nokia for something like $7.2 billion back in September 2013. So it looks like both Microsoft and Nokia knew which side their respective slices of bread were being buttered on, and the acquisition seemed like a natural next step, right? Microsoft makes Windows Phone operating system, and Nokia makes the hardware, why not share a roof? It seems like a pretty good idea…

Flip to the Flop

It might not really be fair for me to call Windows Phone a flop. They’ve sold some units, they have a market share. But when you’re the company who’s desktop operating system has dominated the lion’s share of the market for more than 20 years, it smarts a little to be sitting at a 3.6% market share in the mobile space. In fact, Windows Phone as a platform was only ahead of two other mobile platforms: BlackBerry with 1.7% and “Others” with 0.6%. I’m pretty sure that “Other” is referring to “dumb” phones that don’t run a modern mobile OS. So that means that other than phones that aren’t considered smart phones, the only company that Microsoft did better than was BlackBerry, and we all know what kind of shape those guys have been in over the last year.

Here’s the flip: Nokia just announced three new phones at MWC, the X, X+, and XL, and they’re all running Android. Oh, SNAP! So, you just got bought by Microsoft six months ago, and now you’re making ANDROID phones? Bold move, Nokia. Bold move. Ironically, the skin Nokia built for these phones makes them look more like a Windows Phone than any version of Android. But the reasoning behind these three devices is sound. They are less expensive smart phones aimed at “emerging markets” meaning people who don’t have the money to spend on an expensive phone. This space has been absolutely owned by Android, and Nokia seems to want to get in on that action. Personally, I can’t blame them one bit. If you’re really good at what you do, and if you haven’t held a Nokia lately they’re really nice, and you’ve hitched your wagon to an operating system that appeals to less than 4% of all consumers, I can see why wanting to jump in on some of that sweet sweet 80+% market share love.

To be clear, I don’t hate Windows, Windows Phone, or Microsoft. I have owned multiple Xbox’s and I currently have two gaming PC’s in my home. I’ll tell you what I do hate: confusing products. Windows Phone is not intuitive. I am an IT guy by trade, and have had the opportunity to try out a variety of different mobile operating systems, and the least intuitive is Windows Phone. Now, again, to be fair to Microsoft, how do you stand out as something special when you’re being compared to Android and iOS? Both of those operating systems are unique, but in a way very similar to one another. It is my belief that Microsoft’s tiled operating system is an attempt to separate itself from the rest of the market. Trouble is, I think it might have distanced itself too far.

To Sum Up

I think that the X series is a very wise move on Nokia’s part, and shows two things: they’re keeping their eye on the market, and Microsoft doesn’t control their every move. I also think it’s going to be very interesting to watch the relationship between Nokia and Microsoft as they attempt to find a dynamic that works for them. Luckily for them Steve Ballmer’s out of the picture. I can just see his giant dome going blood red in rage. But that doesn’t mean that the people still at Microsoft are happy. Joe Belfiore -who heads up a team that focuses on, among other things, cell phones at Microsoft- was quoted as saying that there would be things that Nokia did that they (Microsoft) would be “excited about” and that there would be other things that they would be “less excited” about. Only time will tell how this will all shake out, but my final thought would be this: If I were at Microsoft and I was trying to strengthen the company, it would be a double-edged situation. On the one hand, you don’t want a company that you own to be building products for the “enemy”, and on the other hand if you’ve had less than amazing results with things like Windows 8, Surface, and Windows Phone, do you turn away money? A stronger Nokia could mean a stronger Microsoft, but not if the money being made undermines the parent company.

It’s a tight-rope walk trying to be gentle as you bite the hand that feeds.

About Justin North

Justin North
Yeah. 220... 221, whatever it takes.