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Microsoft Should Embrace Nokia's Android Project

Jan 11 2014, 8:01am CST | by

Microsoft Should Embrace Nokia's Android Project

Photo Credit: Forbes
 
 

While the rumours are still unconfirmed, there’s a lot of talk about Nokia’s Android phone. It appears to have the codename Normandy and developed to complement Nokia’s low-end Asha handsets. It may also have been a useful bargaining chip as Nokia’s Windows Phone contract came to an end. When Microsoft’s purchase of Nokia’s Devices and Services section is completed, Microsoft should embrace Android.

I’ll point out that all of this online discussion has been driven by a handful of unsubstantiated leaks and stories. Let’s assume that these rumors are broadly true. The idea of Microsoft having their own Android fork is one that I think Redmond should seriously consider.

Microsoft has a significant investment in cloud services for their users. Hotmail was one of the first web-based email services, and Outlook.com continues that tradition while adding in support for multiple calendars, an address book that connects to the major online social networks (including Facebook, LinkedIn, and Twitter), and providing online storage space with SkyDrive.

Windows Phone users will be aware how this tight integration can be a benefit. Photos and videos can be set to automatically back up to the cloud, calendar changes are synced over the air as they happen, and you can reach out to people from a central point no matter what network they are on (the same integration is present in Windows 8 as well).

Microsoft is in the process of a huge push into the cloud. Almost every Windows Phone user will sign up and use some of the features. If Microsoft was to release Nokia’s still to be substantiated Android handset, I would assume that it would be tied as tightly to their online services as the Nexus handsets are tied to Google’s. That’s a win right there for Microsoft.

Windows Phone is established as the third player in the smartphone market. With some smart marketing, decision-making, and focus during 2014, Microsoft can consolidate that position and reach a 10% share in the US and world market. Windows Phone may carry on steady growth over the next few years, but most analysts are pegging the potential share in the 15%-20% range over the next four years. Without some disruption, ‘comfortably third’ is going to be Microsoft’s final destination in the market.

If Microsoft is going to disrupt themselves, then Nokia’s Normandy phone is the best wedge they have. It takes Nokia’s traditional strengths with low-end devices (using the operating system to get the most from the lower hardware specification, marketing relationships, and logistics), and would couple it with Microsoft’s drive into cloud services for the second half of the decade.

Windows Phone is not yet ready to take on the feature phone market that Nokia’s Asha range of handset now sells into. Assuming the purchase of Nokia’s Devices and Services team does go through, then the Asha momentum would carry on and Microsoft would have a platform that would need to be integrated into their cloud. Why not keep Asha around as a short-term measure, but spend the engineering team building on Nokia’s fork of Android and fully integrate it with Outlook, SkyDrive, and the rest of Microsoft’s cloud based services.

If you’re going to be selling a handset with low financial margins, you need to make up more on the upside. User acquisition for Microsoft’s online services is a very persuasive upside.  After three years Windows Phone has established Microsoft in third place,  there is sufficient strength and support to maintain that position, but it’s unlikely that there will be a sudden hockey stick of sales, user adoption, or developers flocking to the platform.

Looking around, Android variants are relatively easy to find in the smartphone world. From the full-blown forks you can find in the Chinese marketsCyanogenMod and Amazon’s Kindle Fire OS, to BlackBerry’s smart use of Android for the BB10 platform and the compatibility with Android offered by the Jolla handset, Android cannot be ignored.

There is a certain level irony that Microsoft would be using Android to disrupt Android, but business is business. The time to make this move is rapidly approaching. Microsoft can carry on their steady course in the smartphone world, but designing a new ship and sending a second mobile fleet out to raid the low-end market of the Android seas would be a fantastic adventure for 2014.

Nokia Lumia 1020

Source: Forbes

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<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

 

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