After months of speculation, Nokia made a number of huge announcements Friday, the biggest of which is that they will be adopting Windows Phone 7 as their primary smartphone platform going forward. I speculated earlier in the week about the various options available to Nokia, but they surprised even me in going as far as they did in putting Windows Phone 7 at the front of their plans for the foreseeable future. At Nokia's Capital Markets Day, new CEO Stephen Elop invited Microsoft CEO Steve Ballmer onstage to introduce the partnership. Nokia will not only be licensing Windows Phone 7, but they will be working closely with Microsoft, integrating their maps and other services into Microsoft's own Bing services, as well as working to drive Windows Phone into low-power handsets for emerging markets.
As a consumer, I'm personally thrilled to see this new partnership because it gives Windows Phone a fighting chance going forward as the smartphone race intensifies and the space is increasingly dominated by Apple and Google. Nokia adoption of Windows Phone means that Redmond will be able to stay alive while they work on finishing their very unfinished new mobile OS. On Mobilified, we've been very complementary of Windows Phone 7 in terms of responsiveness and overall experience, but there's no question that they started far behind and they've given every indication of falling further behind. Their copy and paste update has been pushed from January to March (projected), and the major update for late 2011 can't happen soon enough. Lack of multitasking and other assumed features is a major problem for the platform. With this new deal, however, they have a deep-rooted interest from the world's number one phone manufacturer for years to come. They have time to add those missing features and make their case against Android on user experience, quality of apps, and developer interest in their store.
As an observer, however, I'm both confused an shocked by the depth of Nokia's involvement with Microsoft. While they said clearly that they are free to pursue other platforms at any time, there's no indication that they have any major plans to use a smartphone platform other than Windows Phone for their high-end devices for many years to come. Nokia didn't just adopt Windows Phone, they expressly laid out the time they expect to phase out Symbian and almost outright killed their partnership with Intel on the Meego platform. While Meego didn't appear to be going anywhere fast, it's still surprising to see Nokia leave itself without any options should Microsoft prove to be an unworthy partner. If this partnership with Microsoft doesn't translate into sales, they will either have to adopt Android at a much later date, falling behind other manufacturers, or start from scratch with yet another smartphone OS.
Furthermore, the de facto Windows Phone exclusivity turns Nokia into just another hardware OEM overnight. While Nokia has always had impressive design and hardware innovation, they lack the in-house manufacturing advantages of Samsung or LG. Other than in impressive cameras, has Nokia ever put out the type of high-powered hardware that HTC is now releasing? Perhaps that was part of the reason for not going with Android, to avoid direct comparisons. Still, it seems like a short-sighted decision to trade their advantages in software and services to become an OEM for an unestablished platform. Now, those services are going to be rolled into Windows Phone and Bing. Stephen Elop has already made a few comments about how stopping Android from becoming dominant is a major goal. What's they're essentially saying, however, is that Windows Phone is a better choice because they are currently smaller and less-successful. But what happens if Windows Phone gains momentum and reaches legitimate competition with Android? All of Nokia's unique assets and contributions will be there for the taking by competing manufacturers.
The apparent imbalance of this arrangement with Microsoft seems to indicate a deeper problem. This arrangement is rife with complications and negative possibilities for Nokia, but they may not have had any other option. In fact, the analogy put forth in Stephen Elop's now-famous "burning platform memo" doesn't seem terribly overdramatic. Nokia put themselves in a corner and this may be their only way out. Unfortunately, this only way out is also a ticket to dependency on Microsoft and a reduced stature as industry-leader.