Normandy? Mview? Nokia X? Whats the Thinking Behind Android Based Smartphone by Nokia... Now?

Of all that wild and weird saga around Nokia's past three years from that moronic Burning Platforms memo (so poisonous, Nokia's Chairman Jorma Ollila reprimanded then-new CEO Stephen Elop in front of the Nokia Board - the memo is the costliest management memo of all time) to the even more incredible revellation that Elop was paid 25 million dollar bounty for destroying the handset business so badly that it was sold to Microsoft (and that the new Nokia Chairman wasn't even aware of this new bonus clause motivating his CEO who was destroying the profit engine of the corporation). Now we have the ultimate madness in the weird love-hate relationship that was Microsoft and Nokia. 

Normandy, ie project Mview ie Nokia X is the secret internal project to rush-develop an Android based smartphone for Nokia as it became obvious last year that Windows Phone was doomed. The Android project was very effectively used by Nokia in the negotiations with Microsoft to force MS to make a better offer for Nokia's handset business (the original offer was worse than the one we finally heard about). Microsoft could not have its primary smartphone partner Nokia to suddenly seem to lose faith in Windows Phone and start a shift to Android. We know for a fact that Microsoft hated the idea of an Android-based Nokia smartphone already last summer. It would hate one even more now as Windows Phone market share is sinking and Android is nearing 80% of the market.

All the logic seems to suggest the Android based Nokia 'Normandy' is a ridiculous rumor and will never be sold. As Microsoft is now finalizing the Nokia purchase, it would hever allow this. So why on earth are so reputable news sources as the Wall Street Journal reporting that Normandy will be launched at MWC in Barcelona on 24 February, mere weeks before the Nokia handset business is handed over to Microsoft. What is going on?

I don't want to waste our time on this blog running after every silly rumor. But did you notice - neither Nokia nor Microsoft have been willing to state categorically that it is not true? Every day that the media plays with this story that Nokia will introduce an Android smartphone in the next 11 days or so, will only serve to depress Windows Phone based Lumia sales - and stall any software developers from pursuing any new Windows Phone app development (as Windows Phone had 3.6% market share of all smartphones sold in Q4 and Android had 79% - the obvious place to develop apps for Nokia phones will be Android the moment that phone is announced and end all WIndows Phone app silliness)

So lets discuss this matter and see what factors in it.

WE ALL WANT IT

First the obivous. The Windows Phone experiment is a colossal fiasco for Nokia. They managed to convert only 1 out of 10 customers they used to have on the 'obsolete' Symbian to come to the 'new and magnificent' Windows Phone. Yes, 9 out of 10 loyal Nokia smartphone customers ran away to any other platform, rather than Windows Phone. Most of those went to Android.

If we can't have the best-ever seen mobile OS (at least this side of an iPhone) ie Nokia's Linux based MeeGo on new Nokia smartphones, then the next-best thing would be Android. We all would love to see Nokia's hardware excellence deployed on the latest Android and having the access to the vast library of the best apps in the Android app store rather than the pale selection of mostly lame watered-down versions of those apps on Windows Phone. So please don't bother to comment that 'yes we all would love the Android smartphone from Nokia'. That comment does not add to the discussion. This discussion is about what is best for Microsoft and/or Nokia, not whats best for us consumers. Because Microsoft has bought Nokia's handset and an Android smartphone would be poison.

ANDROID POISON TO MICROSOFT

Lets put aside the fact that Microsoft hated Google already. Lets put aside the fact that year 2012 Android sold more new devices (as smartphones, tablets and laptops) than all Windows based devices (PCs, tablets and smartphones) combined - in new sales. Or that in 2013 Android installed based passed Windows in the even more meaningful statistic - devices in use. Yes today Android powers more computing devices than Windows and Microsoft no longer rules the software world.

From April 1, 2014, when Microsoft takes ownership of the handset division from Nokia, the worst bit of news for Microsoft's mobile ambitions would be if there is a brand new Android based Nokia-branded smartphone stealing all the news. This would be a MASSIVE CATASTROPHY for Microsoft. Why? Because any developer who heard of Nokia launching an Android smartphone - would immediately draw the conclusion that Microsoft will teminate Windows Phone sooner or later and go fully Android. That is what happened many times in the industry already after various giant handset makers found that Windows based smartphones are perennial losers in the market - so they went exclusively to Android like LG and SonyEricsson (now Sony). If not abandon Windows the other option is to diminsh Windows to a token device of almost no relevance which is how Samsung and HTC have played Windows recently shifting almost all of their smartphone production to Android. If Nokia now 'started' the ball rolling towards Android - any sensible developer concludes that this is the end for Windows Phone.

Then it doesn't matter at all whether there are cool new Lumia smartphones ALSO launched to run on Windows Phone. Windows Phone is the dying platform at 3.6% and Android the growing dominant platform at 79%. Every single other Windows partner has shifted to do most or all of their smartphones on Android. If Nokia now started onto that path, it is 'obvious' that Windows Phone is now in terminal death journey. No matter what Microsoft would say or do, that is what any sensible developer would conclude, especially after all the ridiculous nonsense of the past 3 years.

Whether it is fully native Android or a 'forked' version of Android is irrelevant. Whether it is top end phones or bottom end phones, is irrelevant. Whether it supports Android apps or Nokia apps is irrelevant. If Nokia after 2 years of pursuing pure Windows Phone would suddenly add Android to the portfolio, it can only be seen in one way - Windows Phone is dead and Android is the desperation move to try to salvage something.

MICROSOFT CANNOT ALLOW IT

So up to March 31, 2014, technically Nokia is in control of its handset unit and can do what it wants with it. But from April 1, 2014, Microsoft takes over. If Microsoft were to discover a brand new Android project, it would kill it on the spot on April 1, and with big public fanfare. Microsoft's own Windows based operating system would be the only one that Microsoft's own new handset division would use in its smartphones.

There is no doubt that Nokia knows this. So what on earth could be the logic of announcing an Android phone at the end of February? Could Nokia actually have time for a few weeks in March to actually start to sell it too? As Microsoft would kill the Normandy immediately on April 1, why would Nokia want to so deliberately and blatantly want to damage Microsoft's new handset business?

Note how vulnerable Microsoft is. Its own Surface tablets are struggling while Android tablets are now more than half of the total tablet market. Nokia has just released its first tablet (and a phablet) for Christmas. If the developers see that Android is coming and Windows Phone is going out, they would also be very well motivated to stop Windows tablet app development - and shift all that focus also to - Android.

Meanwhile the PC market is in severe decline and also there Google's Chrome OS is emerging as a new rival. Microsoft has a long history of unreliable developer paths and of sudden deaths in the evolution, especially in mobile (WIndows Mobile had no growth path to Windows Phone; Windows Phone 7.x the version Nokia first deployed did not allow upgrades to Windows Phone 8, etc). Any uncertainty now would only be counted against Microsoft because of its recent past.

Would Microsoft's new CEO and the big hardware production acquistion by Microsoft be celebrated by great news about Windows Phone based Lumia smartphones - or would that be totally overshadowed about the brand new Android smartphone(s) and what happens next with those... 

We know that Windows Phone is not suited for very low-cost smartphones - where the market growth is (sadly, Nokia's own Symbian was suited for that low end of the market, and even more sadly, Nokia had a new Linux based development of a low-cost smartphone operating system called Meltemi that was also destroyed by Elop). 

If Microsoft keeps the S40 'featurephone' operating system of Nokia in production powering Asha and low-cost phones, that is safely not seen as a rival smartphone move by Microsoft. The Asha and basic S40 handset business can be gradually diminished and ended. But it would not be seen as a threat to Windows Phone. However, if Microsoft were to now switch from Asha/S40 to Android - that is a clear signal that Android will eventually power most of the 'Nokia' smartphones owned by Microsoft. How weird would that be? It would be a clear signal that Windows Phone is deemed dead by Microsoft management. We have seen that movie before - when Sony finally launched VHS based video cassette recorders. At that point the whole Betamax VCR business died.

THREE SCENARIOS

First and BY FAR the most likely scenario. There will be no Android based Nokia smartphone. This is the logical outcome. Its just a silly rumor.

But we've seen many major mobile phone makers make many massive mistakes in the past. Just now a few weeks ago we heard that HP is having regrets about abandoning the smartphone races and will return (and of cousre now will launch new HP smartphones on .. Android)

So what of Nokia? Is it possible that for some bizarre reason, Nokia could announce the Normandy and rush it to market to sell it a few weeks before Nokia transfers the handset business to Microsoft? Could Nokia be doing this deliberately to 'damage' Microsoft? Now, I kinda like that haha, personally, as I see Microsoft as the biggest bully in the tech industry who just crushes rivals, and would love them to be given a bloody nose, but this would be a bewildering development by Nokia. Would it be revenge for something or could it be that somehow Nokia hopes Microsoft would be so enraged they would maybe pull out of the deal (there are probably different clauses of who has to pay what to whom if its Nokia who cancels the deal or of its Microsoft who cancels the deal). Yes yes yes I'd love to see that but it seems like an incredibly far-fetched Hollywood script.

And lastly. Could this be sanctioned - or maybe even planned by Elop? Oh, would I love that to be true. That he somehow managed to bless this idea and not think it through and Nokia gleefully would now just be fulfilling the plan as designed by Elop? Mr Burning Platforms who returning to Micrsoft would effectively set his Windows Phone platform on fire haha...

We will know on 24 Feb. I really can't see this happening but I will be monitoring it with amazement if it does come true. And then we have to see will Microsoft make nasty noises and terminate the Normandy immediately on April 1? PS if Normandy comes then do rush to you store and buy the 'very last real Nokia as not damaged by Microsoft software haha'

Comments

[E.Casais]

There is an alternative interpretation to the whole meaning of Mview/Project X: it was a quick no-frills testbed to replace S40 on the Asha line after Meltmi had been scuttled.

S40 is now basically the culmination of a feature phone OS -- it offers touch screen, browsing, e-mail, games, Facebook, Twitter, Whatsapp and even some form of Nokia maps -- but it has probably been stretched as far as technically possible. A successor is needed if one assumes that low-end, affordable devices, not necessarily based on a touchscreen, are commercially profitable in the long-run. Meltemi was supposed to be the successor, but the decision not to develop such an OS internally meant that some form of Android was the only viable alternative remaining.

Hence a fourth option: Microsoft will allow Normandy (or whatever it will called commercially) as a one-shot product. It will divest the entire S40/Asha/feature phone division rapidly and sell it to some other firm (possibly an Indian company). And Normandy will be included in the package as an enticing gift to the buyer (i.e. "look, you get the future-proof OS for Ashas as well at no additional cost!") with some strong contractual wording about what kind of apps can run on that OS, and what kind of hardware that OS can run on.

[cornelius]

If this rumor is true, then the only reason I can think of is that Microsoft chose Android because the Windows Phone operating system is a pig. WP requires good CPU and good battery. Microsoft sells cheap Windows phones but they are cheap to produce, they are cheap because Microsoft takes on losses for each phone sold. So if Microsoft wants to compete with the cheapest Androids and be profitable it needs to either cut down the specs (which will make the user experience bad because Windows is and resource hungry) or use an operating system that uses the resources more efficiently.
The irony is that a certain former CEO, yes, that brute, you know him, said that Linux is cancer. So now Microsoft will sell phones with cancer on them.
Also, there is another rumor that WP will be able to run Android apps. Man, we live in a crazy world. Imagine Microsoft encourages people to use Java for application development. Whatever happened to the beautiful Silverlight?

[cornelius]

I can't edit my previous post. I meant the WP are *NOT* cheap to produce.

[zlutor]

@Tomi: what about this one: "Microsoft could bring Android apps to Windows" - http://www.theverge.com/2014/2/12/5404098/microsoft-considering-android-apps-on-windows

That would be also interesting if becomes true. But that would mean anything but good for WP. Or not, Id o not know...

[Kobbe60]

I think its logical that Nokia has a Android phone brewing. Microsoft is in flux and facing problems on many fronts, new CEO, falling sales of PCs, the fail of Windows 8 and WP8. If Microsoft would decide to back out from the Nokia deal and pull the plug on WP8, Nokia would be left in the mobile desert with now easy way to rescue. A Android phone could be the flask of water that saves Nokia.

I do not think that Microsoft will back out of the deal. I believe that the Nokia android is Nokias way to play it as safe as possible.

[UVStaska]

Yes, there is a clause in the contract that MSFT will have to pay Nokia (about $1B, if I remember correctly), if they cancel the deal. Nokia also has that cheap EUR 1.5B loan they got from MSFT.

However - Nokia X has been under development since at least last summer, probably for more than a year, with a knowledge and (most likely) approval from Elop. My theory is that it started around the time Meltemi was killed, and probably was the reason why Meltemi was killed. Nokia decided that they won't be able to match Android, saw success of Amazon Kindle and various AOSP phones in China and went Android for Asha.

With Elop in charge of Nokia the whole time, it's also highly doubtful that this is some kind of deliberate effort to damage Microsoft. Especially since Elop has been contender for CEO spot there until recently. And that both, Nokia board and most of Nokia shareholders are strongly in favor of the deal.

Since WSJ leak sounds like a controlled one, that probably came from Nokia, it actually might be a pressure tactics on MSFT, if some people in new MSFT CEO camp are getting cold feet for the whole Nokia phone unit acquisition. I think we saw similar planted leak in WSJ to pressure MSFT when the news that Nokia walked away from negotiations this summer came out.

Further complicating matters are antitrust laws, which say that MSFT can have no influence whatsoever on Nokia product planing and pipeline since the day the deal was announced in September:

http://hal2020.com/2013/10/16/how-much-influence-is-microsoft-having-on-nokia-right-now/

There were also rumors that the whole Asha on Android project was being developed by R&D department, under Nokia CTO office, which is staying with Nokia. So until the deal is done Elop may not have much say in the matter. (Asha is going to MSFT, and Nokia can not make phones until 2016 - so there's no chance Android phone effort will remain at Nokia after the deal)

So, yes, the whole Nokia X thing sounds like a huge mess right now, and nobody except people at Nokia have any idea what's it about.

And finally - your exact timing about the closing of the deal is off. All Nokia and MSFT said is they plan to close it in Q1, as soon as they get all regulatory approvals. They got most they need except China. Which is stalling to get guaranties Nokia will not abuse its patent portfolio. The contract they signed in September says that they have to close the deal sometime this summer, or its off (if I remember the timing correctly). So it may close next week, on March 15, on March 31st or even in June or August, if they get stubborn with China.

[Giacomo Di Giacomo]

Future Lumia phones will not bear the Nokia name any more, but Asha (and hence Nokia X) will. So, in the long run, it is just another Android phone manufacturer, with no connections to the Lumia line (except its owner), and won't do any more damage to Lumia than, say, Huawei selling Android phones.

[Earendil Star]

My analysis:

1) MS is in total control of Nokia, not only the part it bought, but the remaining company also. It's now full of ex softie managers

2) Whatever is being planned, it has total, unconditional approval by MS. Because it was decided by MS. Nokia had no freedom of choice since late 2010.

3) If there will be a Nokia Android phone, it will be because of some hideous plan to exploit the Android ecosystem, while trying to entice users to transition to the WP platform.

[Stevan Gvozdenović]

"could it be that somehow Nokia hopes Microsoft would be so enraged they would maybe pull out of the deal (there are probably different clauses of who has to pay what to whom if its Nokia who cancels the deal or of its Microsoft who cancels the deal)."

could be they are bluffing or elop is bringing yet another moronic business decision

[Mr Eric Wu]

Tomi, you have missed one scenario - this is planned by Elop to maximise the return on investment for Microsoft.

A few facts: Microsoft is only in it for WP, Microsoft has no need for S40/Asha, No one has any need for S40!, Microsoft gets patent royalties from Android phones, featurephone sales are declining, it will be almost impossible to convert S40 sales into WP sales, Normandy is based on Android, Normandy is not a smartphone (runs Android kernel but is not a smartphone).

So, this is how it works.
1) Elop trashes Nokia to lower the value and sale price.
2) Elop agrees sale to Microsoft, at a very low price.
3) Elop starts up a Android version of S40/Asha with the strict rule that it must be closed and not a full Android device. It is a featurephone running Android. It would be trivial to enable full Android on it, but for now it is nobbled.
4) Microsoft completes purchase of Nokia. They don't want S40 (it will be a burden of redundancies, a loss making division and a big confusing distraction). They want to sell it fast. No one is going to want to buy a featurephone maker. But wait, hang on this is an Android phone right? One that I can magically change a config file, pay a Google license and be a full smartphone manufacturer?
5) Microsoft sell the Android division to someone else, for a fairly high price given it comes with it's own factories (WP never needed them) and a design team/dev teams etc. with Android knowledge.
6) Microsoft's cost of buying Nokia is reduced, they don't have S40 anymore and they get a few dollars on every sale of the Android manufacturer formally known as S40/Asha.

I think this is very clever. But I also think Microsoft may well screw up and not handle the PR right.

Mr Eric Wu.

[Mark Levine]

Personally, I think that even if Android only appears on the S40/Asha, is terminated by Microsoft on April 1st and is a completely hobbled feature phone Android, that would still kill Windows Phone 8 (or what's left of it) and probably Windows RT too.

[Mao Nixon]

or..... Microsoft will Trojan Horsing the Google Android project....

Since android is open source, microsoft could take android, and put Microsof-Android-Store. and since microsoft is a software company (unlike Amazon), Microsoft could start poisoning android by creating Microsoft-Android-API that AT FIRST compatible with Google-Android-API (the non-open-source), but after a couple of version, it will behave differently.

Microsoft safe development money, ruin Google Play Store, and may be able to steal some Android manufacture/user.

[Satya Nutela]

Microsoft could sell the device in several country only that the user won't buy it, just the way Elop did to N9.

[TDC_123]

I think even if the Nokia phone are Android it shouldn't matter.

I think the mistake we make is calling them smartphones and grouping them with the the likes of Galaxy S4 and iPhone while really they are not.

These Android Phones are essentially Asha Phones but they run Android. They will be used by people who quite frankly can't really afford huge DATA plans. So it doesn't matter if they have all the apps but perhaps the basics like Facebook and Whatsapp and all. Such apps also come as separate Data plans as well which make it more affordable.

The Good thing about having Android is that PERHAPS developers will find it easier to port apps to these phone, wouldn't require much effort.

Furthermore, this could be a step for Microsoft as well to gain some knowledge or learn about Android and how to port some of their services on Android and make the low end of the market locked on to their Internet Services so that when these users do UPGRADE they do so to Windows Phone which will essentially have all of Microsoft Services

[eduardom]

Somewhat off topic: according to this article Microsoft is thinking about giving RT and Windows Phone licenses to OEM's for free:

http://www.theverge.com/2013/12/11/5199446/microsoft-considers-free-versions-windows-phone-windows-rt

[tz]

Revenge. A parting shot to the murdered Meego N9/950.

Come out with the ultimate Android phone, just one step below the best phone ever, get people lining up ready to buy it and let M$ kill it so that the remaining phones (give each remaning Nokia employee one free) go for $10000 on eBay.

[jj]

I don't believe in any revenge theory. That kind of childish revenge would only hurt those 5000 ex-Nokians that moved to Microsoft.

[willebra]

Microsoft can't yet control Nokia mobiles, that's due to lacking finalization of the deal and competition laws.

Nokia pushed Microsoft to the deal with a threat of moving to Android. Nokia needs to keep that threat credible, until Microsoft has no option to retreat from the deal. Penalties of 1,5B could be peanuts in a deal that looks is getting cosltier for Microsoft every day (low sales volumes, losses). So Nokia keeps up the Android threat. Nokia is not sure whether Microsoft would pull out of the deal, so they need to play it safe: i.e. have an Android phone in case the deal wouldn't finalise.

I guess the start date of sales of Android devices will be early April (unless cancelled).

[Scott]

Tommi is so right that the carriers are not selling windows phones. In local Telecom store today. A guy asked about Nokia windows phone, salesman who is the store manager talked him out of it. Recommended Samsung Galaxy range and the iPhone. Guy bought the iPhone.
Two years ago I had the same experience. Wanted a new Smartphone, salesman showed me Samsung Galaxy and HTC phones. I asked about the Nokia windows phones. He didn't recommend them and talked me out of it. So I bought the Galaxy.
So he didn't show me a windows phone. Even when I asked for it the salesman didn't show me a windows phone. Sales people refuse to sell windows phones. There is no way windows phones can succeed when the carriers refuse to sell them.

[Tomi T Ahonen]

HI everybody

Thanks for great comments! I'm at a conference in Kenya now on limited internet connection but quick comment - very good points by many, that a fourth scenario would be that Microsoft wants to rapidly sell off the dumbphone business and an Android project could be part of that (although it would still mess up the Windows Phone propaganda rather badly). The question in that case would become - why on earth didn't Nokia either keep Asha or sell that part itself (Nokia) while keeping the smartphone business, if there is an obvious buyer to the dumbphone business.... This is still quite a mess and we'll need to see how it plays out.

Pls keep the discussion going..

Tomi Ahonen :-)