In may seem silly to say, but in the ongoing tragicomedy that is Nokia’s wedding to Microsoft, Nokia’s Android strategy could make a whole lot of sense. For both Nokia and Microsoft.
Jussi Nevanlinna, the VP of product marketing for mobile phones at Nokia, says that the goal of both Nokia and Microsoft is to get the next billion people onto the cloud. Not just on the Web or using smartphones in general … but on the Internet, using Microsoft’s cloud.
If nothing else, that is what the Nokia X Android smartphone is really about. This could be one of the ways that Microsoft attempts to turn itself into a true “devices and services” company. For Microsoft, the Nokia X is all about the services. For Nokia, the devices and the potential of broad reach with a cheap Android phone is the main appeal.
“Essentially the story is that Microsoft wants to connect the next billion people to the cloud,” Nevanlinna said in an interview with ReadWrite. “What we bring is very wide reach. We have access to these consumers.… We are a volume platform to connect the next billion people to Microsoft’s cloud and services.”
Nokia’s Diverse Portfolio
Despite shedding market share to the likes of Samsung and Chinese white label manufacturers, Nokia is still a valued brand in emerging markets. Nokia has four different layers of data-connected cellphones from the most basic like the new Nokia 220 (that has nominal data and connects to Twitter and Facebook) to the Asha series with the new Nokia 230, up the ladder to the Nokia X, the budget friendly Lumia 520 and the flagship Lumia devices like the Icon, 1020 and 1520. It's a full-featured product lineup intended to compete across the globe in the smartphone age.
The word on the Nokia X before its official released was that it would replace the Asha series in Nokia’s global portfolio. That will not be the case, as Nokia will slot it in between Asha and lower-end Lumia smartphones on its price scale. Yes, Nokia has an Android smartphone, but it wants to remind you that it is beneath even the lowliest Windows Phone it serves.
Chicken & Egg: Network Effects
The problem for Nokia and its market woes has been Windows Phone. By its very nature, Windows Phone suffers from the chicken-and-egg problem of network effects. Developers don’t want to build apps for Windows Phone because it doesn’t have a critical mass of market share and consumers don’t want to buy Windows Phones because of the lack of breadth in the app catalogue.
Android and Apple’s iOS have both critical mind and market share, and so neither faces this customer inertia that Nokia and Microsoft are so badly stuck on.
To eliminate the network effects on the app development side, Nokia has opened up its Android phone to every Android app market on the planet. Yandex, local Chinese app stores (the most common way users download apps in China), GetJar and the likes give Nokia instant access to all the top Android apps. No porting necessary for most developers, unless they want tighter integration with in-app payments and notifications on the device.
Nevanlinna would not say how long the Nokia X has been in production, but did say that Microsoft has full transparency to Nokia’s product roadmap as part of the acquisition process. So, one way or another, Microsoft is fine with Nokia releasing an Android smartphone. Well, to a certain extent.
When asked about the prospect of a Nokia Android smartphone at a press event in Barcelona at Mobile World Congress on Sunday, Microsoft’s VP of operating systems Joe Belfiore and corporate VP of OEM relationships Nick Parker shared an awkward pause, as if to say, “how exactly are we supposed to answer this question?”
Ultimately, platitudes won out.
“We have a terrific engineering relationship with Nokia. What they do as an independent company is what they do. They will do some things we are excited about and some things that we are not excited about,” said Belfiore.
Business Insider reports that one Microsoft source said that Nokia's decision to go with Android is, "embarrassing."
Microsoft likes to think of itself these days as a budding “devices and services” company. For the Nokia X, it is the services that are the most important to Redmond.
The nominal idea for Nokia and Microsoft is to make the Nokia X the “onboarding” process to higher end Windows Phones. Nokia’s user interface for the X mirrors the hubs-and-tiles look of Windows Phone. It has two homescreens, one for apps and another for notifications and activity called “Fast Lane.” It is meant to mimic Windows Phone so that when people theoretically upgrade from the Nokia X, they upgrade to a quality Lumia device.
At this point users will theoretically be hooked onto Nokia and Microsoft’s services like Skype, OneDrive, HERE Maps and Nokia MixRadio. The idea then is to upgrade them to Lumia devices with the full scope of Windows Phones capabilities and hardware.
Will It Work?
Microsoft has given its blessing to the Nokia X. Nokia thinks that it can penetrate emerging markets with the mix of Android commodity hardware and software while tying all the pertinent bits to Microsoft’s cloud.
This may not be a winning proposition in the Microsoft offices going forward. At Mobile World Congress, Microsoft announced that it is making “Windows Phone open for business.” An update to the Windows Phone platform will allow smartphone manufacturers to use basically any hardware they want to build a phone on top of the Windows Phone operating system.
The idea is that a manufacturer could theoretically use the same hardware they use on a low-to-mid range Android phone and instead use Windows Phone on top. The notion is to create diversity in the Windows Phone ecosystem by allowing manufacturers to build cheap Windows Phones that can ship to any portion of the globe.
In the meantime, we have the Nokia X. Its non-Nokia Android equivalent is, more or less, Motorola’s Moto G, an Android phone that has some of the best specs and user features of any device less than $200 without a contract. Before Microsoft’s announced update, Windows Phones 8 could not really use that same low-end hardware that the Moto G and its Android kindred use. With Microsoft’s move to embrace more manufacturers and focus on the lower end of the market, it remains to be seen if the Nokia X is really necessary.
That doesn’t mean that the Nokia X is destined to become vaporware. It is real and it will ship next week. But will we see a Nokia X2? How far are Nokia and Microsoft willing to go down the rabbit hole with Android when Microsoft is putting so much effort into spreading Windows Phone to any interested manufacturers? That remains to be seen.
For now, Microsoft is content in getting users on to its services business via any means possible—even if Android is involved.