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« Lets Talk Handset Features - My Hypothesis is that Screen Size Trumps Everything | Main | MWC Related News Day 1 - Samsung Galaxy S5 and other news and non-news »

February 24, 2014

Comments

RottenApple

@zlutor:

Sure, $20 can be an investment. But let's be serious here: These $20 will get held against the price for staying with the services vs. upgrading to better hardware when the time comes.

"Nokia Music..."

With those services it depends on what they offer and whether the existing content can be transferred.
As long as it's music bought in their store there should be a way to get if off the old phone and onto the new one. You can even do that on Apple's devices without too much of a hassle.

And if it's a subscription service, that can be terminated so that on the new phone another subscription service can be used, no big deal. There's no loss involved.

The stuff that can really cause a serious case of lock-in is like Apple's eBook offerings which are hardwired to Apple's hardware.

But if you ask me, offering a service that requires one's own product to be bought is a dead end business model. It only can work if one manufacturer, like Apple in the US, holds a major piece of the market. Microsoft and Nokia aren't even close to that in the countries where they are moderately successful.

Spawn

Thing is new $70-$100 Android devices running AOSP 4.4 on dual-core with 512MB RAM are standard already in this, the emerging, markets since a while now. This markets are highly competative, much choice, latest and greatest long before it hits in way more expensive and crazy limited variants western markets. In this markets Google Android is not number 1, AOSP is. Its a 1 minute job to add GSP but not much do because Google services are just not demanded. Thing is in this markets western services like Google, Facebook and Microsoft are not of much relevance.

Mao Nixon

It's really funny to watch microsoft astroturfer such as Leebase & Baron comment on this news.

They used to say that "Android user can't appreciate the apple luxury ecosystem, yada, yada, yada, apple got the most profit, yada, yada, yada"

But when Nokia announce cheap phone with small profit, they talk something else.

LOL.

foo

> Tomi - sorry to say, but you are missing the point.
>
> This is a MASSIVE attack on Google from Washington State - Both Amazon and Microsoft are now in the AOSP
> camp, eviscerating all signs of Google Services from their Android devices.
>
> Sadly, you (and others) will be reporting these devices together with Google Android for market share, and are
> missing the point that this is really a completely different ecosystem.

The question is... why hadn't Nokia done that before?

No, it's not an attack against Google. It is a desperate move.

And, maybe, a way to put pressure on Microsoft -- the deal is not complete, you know?

Vesku

These NokiaX products aren't really a replacement of anything Nokia previously had. This price band of smartphones is the fastest growing smartphone segment. WP simply doesn't run on devices at this price point (assuming positive margin) and WP also lacks support for dual-SIM, which is a mandatory requirement in the target markets for NokiaX. This is a very pragmatic product move from Nokia to stop bleeding market share, and I hope they succeed.

foo

Bad news for those expecting a huge success:

> Here, the phone-maker borrows, bends, and recombines elements of Android, Windows Phone,
> and Nokia's own Asha OS (...)
>
> The result is an awkward amalgamation that doesn't do justice to any of the hybrid platform's
> component parts. For someone familiar with all three inspirations, the Nokia X OS mashup is an
> ill-fitting mix at best and an unholy union at worst.

Source: http://reviews.cnet.com/operating-systems/nokia-x-software-platform/4505-3671_7-35835188.html

It looks like a half hearted project designed to force Microsoft's hand.

Given that the result of the experience is not good, and Windows Phone could be used in equivalent hardware, I don't see why Microsoft would keep the project alive after acquisition.

Spawn

Remember Elop announcing that WP needs to go faster low-end? Remember the pressure he got from investors for not offering Android? What we know is that NokiaX must have been in development since at least 1.5 years judging by use of AOSP 4.1. That matches to the time it became visible for everybody that the WP-strategy totally failed. It matches to Meltimi being canceled because Android was plan B. Asha/Smarterphone as desperate move to delay a Nokia Android.

But better yet, AOSP 4.1 means they didn;t bother to upgrade last 1.5 years even with the for low-end vital important optimizations done in later versions. 1.5 years ready but closed away in box and just now, after contracts with Microsoft are signed, moved out and pushed to public.

This is so fishy, so corrupt, so questionable. Nokia got f*cked up from inside by the whole upper management on intention.

pole

That is probably correct that chief Elop wants to get WP towards low end. The problem simply lies within the OS, its requirements and hardware which support the OS. The problems with that have been known from day one. WP has certainly moved to that direction but without success to get close with Android.
It just shows competitiveness status of WP.

Tomi T Ahonen

Hi all...

Great comments please keep discussion going

First to all. I saw the comments and also lots of comments on TW and read a few articles about Nokia X and decided I have to do some analysis both of the Why and then the How Much sides of this matter. I have that analysis in draft form, I'll hope to post soon. So I will skip many good comments here about 'why' Nokia did this and also the ones speculating of the market chances and what parts of the business could be cannibalized. That all is coming in the blog.

ToTTen - 'Microsoft doesn't have much to lose' - in terms of handset sales, sure. Who cares if they are low-cost devices whether they run Nokia proprietary S40/Asha or Android. But that is not Microsoft's core business and foundation for its total empire. Windows is. Windows is in a death-struggle against Android for all the marbles, for world domination - and Windows is already losing. They can't have 'their' Nokia now waving the flag of surrender and jumping onto the enemy bandwagon. Microsoft would be far better served to simply eat the 7 Billion dollar investment in Nokia and shut down the dumbphones business than letting 'their' Nokia promote the superiority of their direct rival - the only global rival to Windows in 3 decades - is Android, which now ships on more computing devices than Windows and as of December 2013, is also in installed base on more devices than Windows. Microsoft is losing the war - badly - and one of Microsoft's best allies - Nokia is now shifting to fight on the enemy's side... Its like Italy switching sides in World War 2.

Jaqiit - yes that hit me too. There is eerie similarity to MeeGo in Nokia X. Its partly because Lumia was a bastardization of MeeGo (Lumia 800 was originally the third intended MeeGo smartphone after N9 and N950) and obviously the Linux history at Nokia...

NW - I am pretty sure that Nokia is forbidden to sell any phones for several years now, as Microsoft bought their handset business. So that scenario while lovely, is not going to happen. BTW Elop 'control'? If you were CEO and removed from CEO, you are now only a figurehead. The Nokia Board is livid that Elop ruined Nokia's crown jewels. Elop has no control whatsover at Nokia. Chairman Risto Siilasmaa who is acting CEO is no doubt scrutinizing every email and meeting that has Elop's name on it haha... no power whatsoever - but - but - Elop will be in full control not just of Nokia handsets but also Xbox and Surface once he and the Nokia handsets business is transferred to Microsoft. Trust me nobody in Finland trusts Elop for one half of one word. He is now just seen as a traitor and muppet and is ignored. But Elop is a good actor in front of cameras, send him to do press, that is what the clown is good for. He can even convince press to report that as Nokia teaches loyal customers to use Android now, that means they are easily converted to Windows Phone in the future (when that very same experiment failed totally from Symbian to Windows Phone - and Android is by no means as lousy as Symbian was)

There were some clauses in the transfer contract by which Nokia's exact compensation depends on sales performance of handsets up to the transfer. That is in Microsoft's overall best interest - they don't want Nokia to now strip the handsets division of all talent and resources and let it sink for half a year. Microsoft has written into the contract clauses to reward Nokia for growth in handset sales. That is partly what is motivating this action. Nokia Board knows that Windows Phone based Lumia is dead and won't deliver sales so they need something else - that is Android now and Nokia X. Even if they only are able to sell some weeks of Nokia X, that helps overall achieve better performance and have Microsoft pay a better final price than without it... What helps Nokia in the final analysis now, will be damaging to Microsoft's image but all the more certain that Microsoft will end the Nokia X project the moment they get their hands on it.

mark - brilliant point! I actually copied that onto Twitter, mentioning it was your comment. Thanks!

E.Casais - good thinking but it fails on the pricing. The prices for the X series fall right in overlap of lower-end of Lumia. They will yes no doubt cannibalize Asha but they will devastate low end Lumia sales where the only action is currently. Compare Lumia 520 vs Nokia XL and its no contest. Priced about the same with same CPU, you get bigger screen, second camera, LED flash, dual SIM etc on the XL. It will crush low-end Lumia. Yes the cheapest X series targets Asha but the top end will bite Lumia and hard. (I'll do the analysis in the upcoming blog)

Tomi Ahonen :-)


Jamie

"Outgoing chief executive Stephen Elop presented the new handsets, stressing that they will become part of the Microsoft product family."

This goes to prove that Elop was out to destroy Nokia right from the beginning. Why did he not plunge into Android right from start ? At this eleventh hour because MSFT will want to offload ASHA range then he jumps in bed with the Droid??

Tomi T Ahonen

E.Casais - about 'dead'. When the company that makes 90% of the devices and previously said they will only do Windows Phone, reports declining Lumia sales while industry grows, and now comes to the biggest industry event and show NO new Lumia devices but suddenly introduce THREE smartphones on Android - that means Nokia has determined that Windows Phone cannot sustain growth. They have to go to Android to get growth. It is tantamount to admitting Windows Phone cannot succeed. By the company that makes 90% of Windows Phone smartphones. WP is dead. It is only maintaining an illusion of life by the artificial injections of emergency cash by Microsoft to Nokia, and injections of more cash to carriers, and injections of more cash to developers, and injections of even more cash to other handset makers to make noises they might launch another device here. This is a barren dead land. Its been poisoned beyond life. If there was some chance of modest life in Lumia, Nokia would have shown us 3 new Lumia devices now. Not even one.

Bruno1024 - haha yes. Well guessed...

Mao Nixon - haha that would be great but no it will never happen. Microsoft was for most of the past 3 decades the most profitable tech company and by far the most profitable software company. Still today their profits are essentially all in software, anchored on Windows. Xbox is at best neutral and Surface hasn't come close to recovering its development costs and the new Nokia unit is massively unprofitable. They would be foolish to take the miniscule profits they could squeeze from the low-end of the smartphone market and give up in return the massive profits driven by Windows on the desktop and related Office Suite and other software... Remember Windows is in a death-struggle vs Android. Google's Chromebooks are already a major piece of the notebooks sector, etc. Its not just Android on smartphones and tablets.

Bruno1024 - yes this is what Nokia could have done in 2011 if the 'do we select Android of Windows' choice was done honestly. If Elop had ay integrity, he would have recused himself from that decision-making process and would have brought in some past Nokia exec like Pekka Ala-Pietila to run an evaluation project with no bias. Obviously as most industry experts said on Feb 12, 2011, the right choice was Android not Windows. But what we saw when MeeGo came out, the best case for Nokia would have been Linux based open source Android-compatible Nokia-controlled software, MeeGo. Like we saw on the N9 and N950, Now the Nokia X is a desperation move to recover a few million sales. If Nokia's CEO had fully supported MeeGo and let the N9, N950, Lumia-800 MeeGo version and other devices be sold widely in 2011, Nokia would never have been in trouble and would easily rule still today as the world's largest smartphone maker - remember, the N9 was judged better than the iPhone - no other phone by ANY manufacturer has had that kind of reception. And now the evolution of MeeGo, Sailfish OS by Jolla, is Android-apps compatible. If rather than destroying MeeGo budgets and forcing MeeGo managers to resign, Nokia's new CEO would have supported MeeGo, we'd have fully Android apps compatible but Nokia-optimized Linux based open source MeeGo on all Nokia smartphones today and Nokia's market share would be near 30% and Samsung's somehere near 20%. And Nokia's smartphone unit would still today be reporting the second best profits of the industry behind only Apple as it did still in 2010.

Wayne - I'll do my math on the blog but roughly speaking half of Asha and half of Lumia. But that is if Nokia still controls the handset unit through most of Q2. If Microsoft takes over on April 1, the X series is killed on April 2 and we'll never see 2 of the 3 promised devices.

Keep the discussion going

Tomi Ahonen :-)

CharlieSouth

I agree with LeeBase on the notion that MSFT can act rationally. It's about time, lol.

What I don't get at times is Tomi's glorification of the MeeGo platform. If there was an alternative to the 'obsolete' Symbian other than WP, it was clearly Android or AOSP. Why spend millions on in-house software development and support when another company (Google) already put in all the effort?!

What benefit did MeeGo offer over AOSP, when the latter is fully modifiable and can be made to look like anything you want?

Nokia X, like the Kindle Fire, is a proof that AOSP-based devices have serious potential to become mainstream and make a dent on Google's dominance in web services. Isn't that what MSFT ultimately wants?

Henrik Nergård

If X is the death for Windows Phone I dont think we should read this:

"Microsoft has announced that it is now working with nine new Windows Phone 8 hardware partners as it seeks to "scale the platform" to higher volumes. The new partners include industry heavyweights LG, ZTE, Lenovo, and Foxconn, plus a number of smaller OEMs in the form of Gionee, JSR, Karbonn, Lava (Xolo), and Longcheer."

Bar-Mobi-on

Ballmer’s relations with the board hit a low when he shouted at a June meeting that if he didn’t get his way he couldn’t be CEO, people briefed on the meeting said. The flare-up was over his proposed purchase of most of Nokia Oyj (NOK1V), and part of an ongoing debate: Should Microsoft be a software company or a hardware company too?

Several directors and co-founder and then-Chairman Bill Gates -- Ballmer’s longtime friend and advocate -- initially balked at the move into making smartphones, according to people familiar with the situation. So, at first, did Nadella, signaling his position in a straw poll to gauge executives’ reaction to the deal. Nadella later changed his mind.

Ballmer was so loud that day in June his shouts could be heard outside the conference room, people with knowledge of the matter said. He’d just been told the board didn’t back his plan to acquire two Nokia units, according to people with knowledge of the meeting. He later got most of what he wanted, with the board signing off on a $7.2 billion purchase of Nokia’s mobile-phone business, but by then the damage was done.

from: http://www.businessweek.com/news/2014-03-05/microsoft-ceo-nadella-inherits-legacy-of-ballmer-board-division#p1

zayıflama

Realy ? More than 1.1 million devices running Android are expected to ship this year compared with 360,000 using the Windows operating system, according to data from research analysts Gartner!

AndThisWillBeToo

The Windows Phone that is now dead is rumored to see new devices.
http://www.wpcentral.com/nokia-will-unveil-morelumia-world-april-2nd
It's probably Nokia reading this blog and reacting accordingly.
No, better yet: it is Nokia launching new phones since China and Korea regulations issues lenghten the closure of M$ Nokia deal.
Actually - I think it is Elop being clueless.

What do you Tomi think? Desperation? Windows Phone dead? Microsoft spinning the story?

AndThisWillBeToo

What Does It Mean that Nokia Launches 3 Smartphones on Windows Phone, Now? It means desperation and that Microsoft deal is dead

http://conversations.nokia.com/2014/04/02/lumia-930-lumia-630-lumia-635/

The comments to this entry are closed.

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