Is the Microsoft-Nokia pact doomed?

14th February 2011

In an earlier post we talked about Nokia announcing a new strategic tie up and I’d have bet my house it was going to be with Android. However it looks like Nokia has stunned me and the whole industry by announcing a strategic partnership with Microsoft.

But could this announcement be the death of both Nokia and Windows phone 7?  The first hurdle is engineering. Until now, Microsoft has kept tight control on the handsets running Windows Phone 7, to make sure the phones don’t fail. But Nokia is a rat’s nest of form factors. To try and get around this, the companies have said Nokia will contribute its expertise on hardware design and language support to put Windows Phone on a larger range of price points, market segments, and geographies.

But there’s another problem.

Microsoft will have to rely on Nokia’s engineering heritage to get Windows Phone working on its many and varied handsets, to make sure phones work and don’t get a bad reputation for performance or reliability that’ll damage its market share further as consumer turn off. Yet, Nokia has no experience of Windows Phone 7. Iit wasn’t even in last year’s original OEM line up.

For HTC, Samsung, LG, Asus, and Dell, Microsoft’s partnership with Nokia has powerful competitive ramifications: their biggest competitor will now help Microsoft build and sell the same phone operating system that they are trying to make money from. Nokia will not just specify what goes into Windows Phone. It will also try to ensure its handsets work best with the operating system. And then Nokia will try to get more consumers through aggressive marketing. It would be like Hewlett-Packard helping design and build Windows in the early days of Microsoft when it was also partnering with IBM, Dell, and others.

It’s about now that Google’s Android has to be looking like an attractive, independent option. And don’t think Oracle’s legal action against Google over claimed Java patent violations in Android will keep Windows Phone OEMs in the Microsoft camp through fear.

As a software development company we’ll continue to watch the situation closely, but as our web application department already specialises in developing Microsoft .NET applications, making the transition to Windows Phone 7 should be easy if it becomes the market leader thanks to the help of Nokia.