Business Today

Just married. Now what?

Can tying up help Nokia and Microsoft stay relevant in the world of mobile devices?

     Print Edition: March 20, 2011

The news that Nokia and Microsoft were tying up came at the start of our issue cycle, so I am sorry that I have to bore some of you with yet another article on the tie-up. But, the news is fascinating. Nokia is desperate to stay relevant in the space of mobile devices as Apple and Google eat its lunch and Microsoft is desperate to make a bigger mark in the world of mobile software.

I still believe that Nokia makes some excellent hardware. The problem has been on the software front. The Symbian Software Series 60 that powers Nokia's Nseries smartphones was perfect when it was launched. But as smartphones added features and capabilities, the software and Nokia's reluctance to put in faster processors in its devices (the Nokia N8 has a 680 MHz processor, while the competing iPhone, Samsung Galaxy S and HTC Desire all have 1 GHz processors) crippled its ability to compete.

Kushan Mitra
And even though Nokia remains the king of smartphones in India, thanks to its amazing distribution network and brand goodwill, the growing number of Android devices being used is giving Nokia a run for its money. Worse still, the reluctance of application developers to develop applications for the Symbian platform, preferring Apple's iOS and Google's Android instead, fatally crippled Nokia among high-end smartphone users who live off apps. But how does Microsoft change all that?

From what one can extrapolate from Stephen Elop, Chief Executive Officer of Nokia, and his statements at London and Barcelona industry events is that Microsoft is throwing a lot of money and engineers behind this effort as well. Windows Phone 7 is much better than Windows Mobile 6.5 and at par with Android and even the iOS. Also, Microsoft does have plans to integrate Xbox Live into Windows Phone 7, and while the depth of the tie-up remains to be seen, it might give both partners a say in what the other is working on.

But what about India? As I said earlier, Android is getting bigger in India. Most of the recent device launches at the Mobile World Congress in Barcelona were Android devices. While that in itself possibly explains why Nokia did not choose to go down the Android route, as it increasingly seems that Android devices will become commoditised, it also highlights Nokia's challenge. But, if one discounts this by arguing that this impacts only the high-end of the market, the problem runs deeper. Today, one can buy the Micromax A60 Android 2.1 handset in the market for less than Rs 7,000.

And with 90 per cent of the Indian mobile device market below the Rs 5,000-mark, mobile chipmaker Qualcomm predicts a Rs 5,000 Android device to be available in India by mid-2011 and a deluge of such devices by 2012. Nokia has said that it will keep Symbian 30 and Symbian 40 on their low-end devices. When, rather than if, cheap Android devices start f lowing into the Indian market, Nokia might have a bigger problem than just dealing with Apple at the high-end. It could be a multitude of manufacturers making Android devices across the range. And while Nokia might remain a volume leader, Android will dominate the operating system charts in India (as it probably will across the world). Frankly, the best thing Nokia can do right now is to get a high-end Windows Phone 7 device out quickly, probably in less than six months and also announce some mid-to-low-end devices running Windows Phone 7.

Will this Microkia (or Nokrosoft) marriage work? It is difficult to say, but you really never know.

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