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since now the carriers were even less
likely to want to work with Microsoft
since they were not just the software
supplier, they were the hardware
supplier, too. The business continued
to bleed away. With the obvious
exception of Apple, the mobile industry
had standardized on Android, and the
Windows Phone market share went
down to insignificant.
Conspiracy theorists surmise that Elop
was “sent” byMicrosoft to Nokiawith two
goals. First, to switch Nokia to Windows
Phone so that their huge market share
would jump-start Windows Phone and
other manufacturers would want to
follow. Second, having done that to
deliver Nokia’s smartphone business to
Microsoft with a pink bow on top. Well,
both those things happened but that
doesn’t make any of it a success.
Nokia phone Almost exactly a year ago,
Microsoft realized that the acquisition
had been a huge mistake. They wrote
down the acquisition by $7.6B (around
the acquisition cost) and laid off
thousands more people.
In May this year, Microsoft gave up on
the feature phone business and sold
it all to Foxconn (the company that
famously manufactures the iPhone,
among other products) for $350M. They
said they would continue to develop
Windows Phone and support the Lumia
smartphone brand, but it seems to
me only a matter of time before they
will be forced to give up on that too.
They won’t be coming back from their
miniscule market share.
So why did I add “and maybe rise
again” to the title to this post? Because
just last month, Nokia announced that
it would return to the smartphone
business. Under the terms of the sale
of the handset business to Microsoft,
Nokia was barred from using the Nokia
name to sell mobile phones, since
Microsoft had a period of exclusivity.
That period is up this year.
CEO Rajiv Suri announced that Nokia
could design the smartphone (it still
has resources in house, and after all
the layoffs there are probably plenty
of the old team left in Finland who
could be rehired). Nokia doesn’t have
its legendary manufacturing facilities
since Microsoft got those so it would
license the design and the Nokia name
to as yet unnamed partners. Maybe
even, ironically, Foxconn, who could
presumably also put the Nokia name
back on the feature phone business
it just bought from Microsoft. Nokia
feature phones were legendary in
places like Africa and South America for
robustness and that name probably still
has a lot of brand equity in emerging
markets where smartphones are too
expensive (for now).
Moreover, just as the carriers decided
Microsoft would not be a success,
maybe they will decide Nokia will be.
This story is not over yet.
Thanks to Tomi Ahonen who created
the graphs from Nokia data and makes
them freely available on his blog.
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