Too Late Nokia

Unable to grace wonderful Barcelona for the Mobile World Congress, I’ll pontificate from 6000 miles away instead about the latest Nokia Microsoft partnership. Let’s start with a story: 3 years ago at an interview, I was asked about companies I found interesting, and what I’d do as CEO. I immediately answered Nokia, reasoning that with its market share and brand, it’d be a colossal waste to give up the upcoming smartphone market. I viewed it operating without a clear direction and suggested it ditch its failed OS, run with the then immature Android, leaving the OS work to Google and allocating its resources to building the best application market possible on top of its line of sturdy hardware.
 
So what did Nokia accomplish in the past 3 years? It languished in every possible metric: market share, revenue, technology. So after an exodus of failed executives and talent, they finally abandon Symbian and Meego to partner with Microsoft. (Quick refresher for those not up to date, Nokia announced late last week that it would ditch its own mobile OS platform and go with Microsoft’s Windows Phone 7.) Too little too late. 
 
From a business perspective it makes sense for both companies. Nokia will receive a huge boost in short term profits by taking whatever money and efforts Microsoft throws at them while cutting out its own unproductive development resources. Microsoft leverages Nokia’s remaining brand equity and hardware penetration to buy its way into the mobile platform discussion.
 
Short term gain aside, it’s unclear how and unlikely that Nokia will become a relevant player in the mobile market again. The current competition at the platform level consists of iOS, Android, (my favorite whipping boy) RIM, and HP’s upcoming webOS. Their CEO Stephen Elop is technically correct when saying their “competition isn’t other Windows Phone manufacturers, it’s Android.” Yet while labeling its hardware to battle against the Samsung, Motorola, HTC, Apple, and RIMs of the 
world while letting Microsoft fight the platform battle hardly sounds like a winning strategy. Already behind in hardware, Nokia will now compete against some tough leaders on a platform that is also playing catch up to others. Talk about handicapping oneself.
 
While there are some good ideas for Nokia out there, like Cringely’s rushing the net strategy, I couldn’t come up with one that gives me a warm fuzzy. At the higher level of the stack, the application layer that drives consumer adoption, I believe over the next few years fragmentation will be one of the biggest hurdles for mobile app developers. But what can Nokia realistically accomplish on that front, given it’s Microsoft who controls the platform?
 
Consumers having options is usually a good thing. For those who choose Windows as their mobile valentine, another hardware manufacturer in the game helps too. As for Nokia, I’ll take a pass. Like most of my friends, the last time I owned a Nokia handset was eons ago and won’t likely in the future.