Sunday, February 13, 2011

Sleeping With The Enemy - Nokia and Microsoft

Nokia's recent announcement of chucking out their Symbian platform and bringing home the Windows Phone 7 is an interesting move by both Nokia and Microsoft. This is marriage of two partners who were once the greats and now are fighting younger, nimbler opponents on their own turf. Apple with its iPhone and later Google's Android platform has made life very difficult for Nokia. Similarly, Microsoft is battling its monopoly on operating systems and office suites on multiple fronts like the Google Chrome OS platform, Google Docs, Facebook, Open Doc movement.

What is interesting for me is Nokia's perspective here. They were still the market leaders overall in mobiles. By moving away from their own platform, they have own relegated themselves from a A league to the B league. There is no difference now between a Chinese or Taiwanese mobile assembler and Nokia. They have moved from a high margin business to a commodity oriented low margin business. What prompted them to do this is what would be interesting to understand.

Microsoft, on the other hand, has been a gainer in the transaction. They suddenly get a reputed brand endorsing their platform and enhance their market share manifold. Mobiles, tablets, handhelds are the likely consumer devices of the future. Microsoft, from being an outsider in that segment, all of a sudden would be catapulted to one of the top-three positions. So, its all great news for them. It just needs to be seen how they capitalize on the opportunity.

What happens to Nokia is anyone's guess. The next 2-3 year would make or mar the company's prospects. They remind of so much of great technology companies of the past – Kodak, Xerox, Palm, Motorola, Texas Instruments and a lot others – who were all big names during their hay day but now are also-rans in an ever-changing and unforgiving industry.

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