Reading the tech news over the last couple of days, one story which has been fairly high in profile is that of Nokia. Today, for instance, there is news that Microsoft and Nokia are to form a strategic partnership where Nokia is set to use the Microsoft mobile phone operating system on its smartphones. This followed the news earlier in the week that the Nokia CEO, Stephen Elop, had announced that the company was at a crisis point.
Nokia has a huge market share of mobile phone sales around the world, if not the largest share. But, the area of the market where there is greatest interest is in the 'smartphone' market. Smartphones are better known as devices like the Apple iPhone or the Blackberry from RIM. They are the devices over which the manufacturers are fighting like cats and dogs.
Apple stole a march over everyone in 2007 with the launch of the iPhone (is it only four years ago?) which had customers becoming as emotional about buying one as screaming Beatles fans in the 60s. Google has now toppled Nokia from its position in the smartphone market share rankings in a matter of two years with its Android mobile phone operating system.
So, where is Microsoft in all of this? Well, Microsoft has had smartphones for over ten years. I have had a couple of Windows-based mobile phones and, until their latest operating system was released (Windows Mobile 7), their phones were a poor experience compared to a Blackberry or an iPhone. On my Windows Mobile phone, for instance, when someone called me, the phone would cut the caller off when I pressed the green button to answer. Also, Microsoft had not been very imaginative with their applications. The main applications were just small version of Word, Excel and PowerPoint. Granted, you could synchronise your contacts and emails, but that was not a differentiator from something like the Blackberry.
But, now, by all accounts, Microsoft's Windows Mobile 7 operating system is much better. If Microsoft is to really make a go of this latest version of their mobile phone system then they are facing some stiff competition.
Firstly, the availability of applications. The choice of free and paid-for applications for the Apple iPhone and the Google Android phones is large and growing. Microsoft has to hope that application developers will do as much work to develop 'apps' as the the iPhone and Android developers are willing to do.
Secondly, I understand that Microsoft charges handset manufacturers about $25 to load the operating system onto their devices. Google, on the other hand, gives their operating system away for free. In a competitive market, where margins are tight, paying an extra $25 dollars on a handset is a major difference in how much profit you can make.
How about Nokia? They've been using the Symbian operating system for some time. Symbian has been the nervous system of mobile phones for a long time. However, using it is no longer good if you have ever used a Blackberry, iPhone or an Android phone. So, that has to go, for start. Nokia handsets, in my experience, are very good. They can take a battering and still they work. They're a bit like the car equivalent of a Toyota Hilux. Push a Hilux off a cliff and you can still start it and drive it away after a quick spray of WD-40 and an adjustment of the wing mirrors.
So, neither Nokia or Microsoft is going away soon. They are big businesses and many people around the world will still use one of Nokia's run-of-the-mill handsets albeit that is not a smartphone. Microsoft will still be around producing its Windows operating system for some time yet. But, the fact remains that neither Nokia or Microsoft produce anything in the smartphone market which has anything near the cache that owning an iPhone engenders or the competitiveness that Google brings to the market. They are both slow moving companies in a fast-moving world. Granted, Nokia has been around for a long time (it started as paper milling business in the 1860s) which shows that it is a great adapter to the market.
They will both survive but I can't help but feel that they are not well-suited to the smartphone market these days.
Nokia has a huge market share of mobile phone sales around the world, if not the largest share. But, the area of the market where there is greatest interest is in the 'smartphone' market. Smartphones are better known as devices like the Apple iPhone or the Blackberry from RIM. They are the devices over which the manufacturers are fighting like cats and dogs.
Apple stole a march over everyone in 2007 with the launch of the iPhone (is it only four years ago?) which had customers becoming as emotional about buying one as screaming Beatles fans in the 60s. Google has now toppled Nokia from its position in the smartphone market share rankings in a matter of two years with its Android mobile phone operating system.
So, where is Microsoft in all of this? Well, Microsoft has had smartphones for over ten years. I have had a couple of Windows-based mobile phones and, until their latest operating system was released (Windows Mobile 7), their phones were a poor experience compared to a Blackberry or an iPhone. On my Windows Mobile phone, for instance, when someone called me, the phone would cut the caller off when I pressed the green button to answer. Also, Microsoft had not been very imaginative with their applications. The main applications were just small version of Word, Excel and PowerPoint. Granted, you could synchronise your contacts and emails, but that was not a differentiator from something like the Blackberry.
But, now, by all accounts, Microsoft's Windows Mobile 7 operating system is much better. If Microsoft is to really make a go of this latest version of their mobile phone system then they are facing some stiff competition.
Firstly, the availability of applications. The choice of free and paid-for applications for the Apple iPhone and the Google Android phones is large and growing. Microsoft has to hope that application developers will do as much work to develop 'apps' as the the iPhone and Android developers are willing to do.
Secondly, I understand that Microsoft charges handset manufacturers about $25 to load the operating system onto their devices. Google, on the other hand, gives their operating system away for free. In a competitive market, where margins are tight, paying an extra $25 dollars on a handset is a major difference in how much profit you can make.
How about Nokia? They've been using the Symbian operating system for some time. Symbian has been the nervous system of mobile phones for a long time. However, using it is no longer good if you have ever used a Blackberry, iPhone or an Android phone. So, that has to go, for start. Nokia handsets, in my experience, are very good. They can take a battering and still they work. They're a bit like the car equivalent of a Toyota Hilux. Push a Hilux off a cliff and you can still start it and drive it away after a quick spray of WD-40 and an adjustment of the wing mirrors.
So, neither Nokia or Microsoft is going away soon. They are big businesses and many people around the world will still use one of Nokia's run-of-the-mill handsets albeit that is not a smartphone. Microsoft will still be around producing its Windows operating system for some time yet. But, the fact remains that neither Nokia or Microsoft produce anything in the smartphone market which has anything near the cache that owning an iPhone engenders or the competitiveness that Google brings to the market. They are both slow moving companies in a fast-moving world. Granted, Nokia has been around for a long time (it started as paper milling business in the 1860s) which shows that it is a great adapter to the market.
They will both survive but I can't help but feel that they are not well-suited to the smartphone market these days.
Related articles
- Nokia and Microsoft form alliance (bbc.co.uk)
- Nokia Ties Up With Microsoft (online.wsj.com)
- Is this the end of the line for Nokia? (dialtosave.co.uk)
Comments
Post a Comment
Thank you for your comment!