The Nokia X Android-based smartphone has been official for less than a week and already the talk of the industry is that Microsoft will kill the phone as soon as the acquisition of Nokia is final. 

“Let me put it this way,” one Microsoft employee said to me at Mobile World Congress in Barcelona this week. “Microsoft is a company built historically on Windows.”

Historically, that is true. But the “new” Microsoft may be a bit of a different kind of company. It truly wants to be a devices and services company. For Microsoft, the Nokia X is all about services and emerging markets. If Nokia can get millions of people using Outlook, Skype and OneDrive with the Nokia X, Microsoft will be more or less content to leave it be. For now.

The Nokia X has been in production for about 18 months. Microsoft has known about it for long enough to firmly suggest to Nokia to not ship the smartphone if Microsoft wanted to. But Microsoft did not kill the Nokia X and let it hit the market. Part of this is because of legal reasons (after all, these are still two separate companies), part of it is because Microsoft realizes that the Nokia X could be good for the Microsoft services brand if the phone sells as well as Nokia’s executives seem to think it will.

When asked if Microsoft would consider killing the Nokia X after launch, several Nokia employees basically scoffed at the notion. The general consensus is that killing the Nokia X would seem callow and vindictive of Microsoft and that it would not serve Redmond’s purposes. 

That doesn’t mean that there is a long road map for the Nokia X. The next iterations of the devices are in planning stages. Nokia won’t build top-end devices using Android, but it will likely expand the mid-tier aggressively in short term. If one were to bet, the Nokia X series may go through two or three iterations before Microsoft quietly lets it die. 

The X Doesn’t Jive With The New Windows, But It Doesn't Need To

The “X” in Nokia X stands for crossover. A cross between Nokia hardware and design, the Android Open Source Project and Microsoft’s services.

Nokia CEO Stephen Elop Nokia CEO Stephen Elop

Microsoft as a company has more or less completely rebuilt itself over the last couple of years. It made some hard decisions (twice killing its existing mobile platform in Windows Mobile CE and Windows 7) and brought the entire Windows ecosystem under one common core. The next goal for Microsoft is to spread Windows 8 through the world, lowering the barrier of entry for manufacturers and developers to build on the platform and deploy hardware and applications.

In the mobile arena, Microsoft wants to start pushing Windows Phone down market. The forthcoming update to both Windows 8 and Windows Phone 8 that was announced at the beginning of Mobile World Congress (literally, the first event scheduled in Barcelona) was a statement from Microsoft that it will aggressively push Windows Phone to “growth” markets around the world.

From a technical perspective, what that amounts to is the idea that Windows Phone can now be built on commodity hardware. Part of the reason that Android has eaten the world is that it is built on cheap commodity hardware. It should be noted that Google has already made this move with Android. Older versions of Android (up to 2.3 Gingerbread) could run on inexpensive hardware and the most recent version (Android 4.4 KitKat) was designed to ensure that the most newest features and design of Android can run on lower-end specifications. For Microsoft, it is taken a lot longer to get to the same point as Google has with Android, but it has finally created a system for Windows Phone that will allow it to spread through the world.

When it comes to the Nokia X, the fact that it is built on Android doesn’t mesh into this, “Windows eats the world” strategy. But that doesn’t mean that Microsoft doesn’t want or need the Nokia X. What should be remembered is that Microsoft didn’t just buy the ability to make Lumia devices from Nokia, it bought the entire catalogue. That includes the S series feature phones, the Asha phones and the Lumia Windows Phones. These phones are pushing users to Microsoft experiences like Bing search and Skype. 

From Nokia’s perspective, the Nokia X should be viewed in the same way as the S series and Asha and not as an existential threat to Windows Phone. The Nokia X may not jive with Microsoft's Windows strategy, but that doesn't mean it doesn't fit well within Microsoft's goal to push its services across the world. With that in mind, Microsoft has no intention to kill the Nokia X.