Probably not, and that’s the quandary that Microsoft and Nokia find themselves in.
By now, you’ve probably heard the buzz about the latest Microsoft’s latest acquisition. Microsoft will be purchasing the Devices and Services division of the 150 year old Finnish mobile phone maker Nokia for a whopping 7.2 billion dollars. That’s billion, with a B. If you hold any shares of Microsoft, that news might give you pause; only recently, Microsoft announced it had to write off nearly a billion dollars for unsold Surface tablets. The company has a lot of money in the bank, but it’s not an infinite supply.
You might know that these two companies have had a close partnership for the last year or so. Nokia adopted the Windows Phone operating system, which gives Nokia a way to differentiate itself from Apple and Google, while Microsoft gets a high quality handset on which to show off its OS.
Win, win, win.
Indeed, some of Nokia’s Windows Phone models have been superb. The new Lumia 1020, which has a 41 megapixel camera, is shaping up to be an excellent handset. Nokia recently sent me one for an upcoming eHow Tech fall phone roundup, and I’ve been really enjoying it – look for it to also make an appearance in an upcoming Geek Vs Geek as well.
But everything isn’t coming up Milhouse for these guys. The Windows Phone platform still has only about 3.5% of the mobile phone market. Should you care about that? After all, market share is kind of Inside Baseball. Actually, that is important if you’re shopping for a new phone. With just 3.5% of the market, many developers are ignoring Windows Phone and developing just for Android and iPhone. That means many of the coolest apps are never making it to a Nokia handset. And these days, you don’t buy a phone for call quality; you buy it for the range of awesome things you can do with apps.
So why on earth did Microsoft buy a huge chunk of Nokia?
Well, Microsoft has explained a number of advantages – including lower costs and higher profits on handsets, more efficiently consolidated marketing, and access to Nokia’s mapping technology.
All that’s true, but there’s a bigger, implied truth here: Microsoft desperately needs to be successful in the mobile arena. PCs – both desktops and laptops – are no longer a growing business. It didn’t really matter whether Windows 8 had been a runaway success or the Vista-style failure that it turned out to be, because desktop operating systems are the buggy whip industry of the early 21st Century. Microsoft has tried to crack the mobile market over and over through the years. They’ve launched tablet PCs, SPOT watches, Pocket PCs, and Windows Phone. And none of them have flourished. In many ways, the Nokia acquisition might be Microsoft’s last chance to become a mobile success.
Which brings us back to the question I asked at the start.
Are you going to buy a Nokia phone running the Windows Phone operating system? Honestly, probably not. It doesn’t matter if Nokia handsets are great (they are) and if Windows Phone is a pretty good operating system (it is). The reality is that we’re all pretty entrenched in our iPhones and Androids, and the Windows phone app store isn’t wooing us to change sides.
That’s especially true today, when we’re increasingly using phones like remote controls to operate all the “stuff” in our lives. Case in point: Thanks to a rich collection of apps, my iPhone lets me control my Nest smart thermostat, my iSmartAlarm home alarm system, my Cisco wireless router, and my Sonos music system and TIVO DVR. It lets me see my Netatmo home weather station and see who’s at the door via my Doorbot. It connects me to my Pebble smartwatch and my Chevy Volt electric car. If moving to Windows Phone means losing control of even one or two of those gadgets, count me out. And right now, the Windows Phone store doesn’t have apps to control any of those things.
So I wish Microsoft and Nokia the best as they try to carve out more than 3.5% of the phone market. Competition is good, and the Redmond giant could potentially shake things up. But I’m worried that we’ve already passed the point of no return for Microsoft to reestablish itself.
What do you think? I’d love to know what you think – sound off in the comments.