Tools & Technologies

Microsoft + Nokia: Can Two Losers Collaborate to Win?

Late last week, Microsoft and Nokia announced a “broad strategic partnership to build a new global mobile ecosystem”.

Nokia and Microsoft intend to jointly create market-leading mobile products and services designed to offer consumers, operators and developers unrivalled choice and opportunity. As each company would focus on its core competencies, the partnership would create the opportunity for rapid time to market execution. Additionally, Nokia and Microsoft plan to work together to integrate key assets and create completely new service offerings, while extending established products and services to new markets.

My reaction is … when two market losers collaborate, they lose faster together.

Microsoft used to be a top-dog in mobile devices – before the iPhone hit the market, and as Palm was crumbling, it was Microsoft and Research in Motion. If you were in business and didn’t do Research in Motion, Microsoft’s Windows Mobile or Pocket PC approach was the only other valid way.

Nokia used to be a top-dog in mobile phones – its strategy of “a mobile phone for every pocket” lead to a huge proliferation of devices, all with different form factors and different price points. In the mid- to late-90s, Nokia was the “must-have” device.

In recent years, both Microsoft and Nokia have stumbled badly, and I think this bodes badly for their chance of success, alone or combined:

– Apple rewrote the rules of the game, changing the fundamental strategy to “an app for every pocket” with the iPhone. Nokia is struggling.
– Research in Motion have pushed beyond the business market, and have won admirers in the consumer markets, and even in the teenage girl age bracket. The integrated BlackBerry Messenger is a key strength.
– Both Google with Android and Apple with iPhone have turned the tables on Microsoft by building huge and strong development partners.
– Windows is no longer seen as an essential platform in business, with many individuals voting with their feet and dollars and going for Mac.
– Google owns search.
– Per NYTimes, Microsoft currently has 2% of the global market for phone software.

I was at a meeting last week – large global corporate, high-tech industry, 25 tech-savvy people. Half had switched to Mac laptops. There was one Windows Phone in the room, one Android device, and the rest were split equally between BlackBerry and iPhone. A few had iPads. This picture is not looking good for Microsoft nor Nokia.

Microsoft and Nokia getting together may make for a good headline, it may delay the inevitable, but will it fundamentally rewrite the rules of the game in their favor? I don’t think so.

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