Further to my report on Friday - Nokia joins forces with Microsoft in mobile – the reaction seems to have been a big thumbs down. Earlier in the week, The Times had used my ‘Ratner moment’ jibe - see Nokia torn between burning alive or drowning - in its headline. I’m afraid to say that I think Elop will come to ‘rue the week’. The Nokia/Microsoft partnership will not bear fruit in terms of a joint handset until 2012. So why would anyone in their senses buy a Nokia smartphone until then? Elop has already told potential purchasers that its handsets are at least two years behind the competition. And by 2012 they will be obsolete. Forecasters reckon that Nokia’s share of the smartphone market could be halved from 30% to 15% by then. No wonder Nokia shares slumped c15%.
Microsoft also failed to get any boost from the announcement. Other manufacturers will now think again about using Windows Mobile. By 2012, Microsoft’s battle will be so much tougher – indeed maybe the struggle will be impossible.
Apparently the word ‘ecosystem’ was used 15 times in the short Nokia/Microsoft presentation on Friday. But that just emphasised the predicament. Developers have to choose where to put scarce resource. Apple and Google/Android would be obvious choices but the case for Windows Mobile now looks less compelling – indeed why bother until next year? The ‘ecosystem’ argument is really compelling. Once you have bought all those tracks from iTunes, downloaded all that video, bought all those Apps for your iPad, the thought of changing becomes a bit expensive. By 2012, the smartphone/tablet war might well be over.
But that’s not to say that there aren’t new opportunities. There is still a chance that Microsoft could swing behind Holway’s MyTop concept although Facebook looks more like winning that race each day.
My quote about the Nokia/Microsoft partnership being “a combination of two last generation powerhouses” was much repeated. But it wasn’t half as cruel as one analyst who said “They’re like two people at the end of a disco who think “Oh, you’ll do”’. Or Vic Gundota (Google’s VP of Engineering) who tweeted “Remember two turkeys do not make an eagle”.