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November 28, 2012 – Comments (0) | RELATED TICKERS: NOK , MSFT

Board: Nokia Corp.

Author: TMFinept

How does that help/ hinder Nokia -- unless you're assuming MSFT will bail out Nokia's balance sheet?

Nokia's success in mobile is now wholly dependent on Microsoft's, or more specifically that of the Windows Phone platform. A typical argument is that Microsoft has the wherewithal to stay in the game for as long as it takes and to spend whatever is necessary in order to make itself competitive, just like it did with Xbox. My assertion is that the Xbox situation was different.

The competition in the Xbox scenario was vastly weaker than it is in Mobile and Microsoft still took almost a decade to build a defensible position even then. Factoring in that the competition in this case is equal if not superior and equally-well if not better capitalized, I think that it is wise to temper expectations for Windows Phone. Success for Microsoft has usually been a foregone conclusion due to its size and the fact that it used its balance sheet to compete. In this case, that's just not going to be possible. You cannot out wait Apple and Google.

You bring up an interesting point, by the way, with regards to Nokia's own balance sheet. Microsoft could ostensibly wait and wage war here for quite a long time against Google and Apple. It might not win, but it could probably skate by a long time without losing. Can Nokia? Nokia's financial position is decidedly much less healthy than that of its competition and it's not getting better.

But, judging by the much greater acceptance of Android's more laissez faire mindset, Lumia 920/W8 is offering significant personalization benefits, for starters. Plus innovations like NFC out of the box, best in class navigation (including offline, which is a major benefit in avoiding highway robbery by telecoms) compared to the laughing stock that is iMaps.

These types of arguments were no more relevant on the Symbian platform, where they were all just as true (with the exception of NFC, for obvious reasons involving the impossibility of time travel), as they are here. These are prerequisites now, not innovations.

I would point out that the same is true of the camera on the Lumia 920, by the way. That's actually an innovation of interest, especially to me, but as the N8 proved such an innovation in and of itself may not be enough if it's weighed down by an anchor. The N8 was a terrible regret for me, by the way.

Insofar as personalization is concerned, Windows Phone offers not much more than arranging your homescreen widgets (Tiles ®©™ - Tiles are just highly constrained, uniformly-styled widgets. Old hat. Deal with it.), changing backgrounds, changing ringtones, lock screens, etc.

Navigation is quite interesting, and that was formerly a huge draw for Symbian as well. Regrettably, like the N8's camera, it failed to really make the platform relevant or even stymie losses and I don't know why you'd expect anything different for Windows Phone. To wit, it has been available with Nokia devices since the Lumia 800 and it hasn't provided any evident boost to the platform.

Mapping and even route planning is clearly a critical feature for mobile, but navigation is probably lower priority and offline is lower priority still.

The takeaway here is that it's not a question of individual features and what this platform or that platform does and doesn't have. It's a question of the total package and the one that Microsoft is offering is at its very best merely competitive. That's not going to be enough to turn it into a winner in the face of overwhelming competitive forces.

It's not resonating with consumers and none of the numerous previous catalysts that were supposed to have jump started it have even come close.

Nokia's been around in the business long enough to know what it takes to compete in the world's fastest growing mobile markets - the so-called Rest of the World outside the iBubble. Which is where it perfectly complements Softy's ignorance of the subject!

History supplies us with 5 very dramatic years of evidence to the contrary. I held the same position as you in this regard 3 years ago - I was wrong. Nokia's foothold in the "rest of the world" is demonstrably slipping. Mobile phone sales are down and Android managed to barge in on the low end smartphone market while Nokia was floundering. Now it's raining fire and tearing up that space too, not surprisingly, just like the high end of the market.

I should add that if you're so dismissive of Microsoft's capabilities in mobile, you should be very afraid for Nokia. Every single thing that Nokia would like to be able to deliver in a device is dependent on Microsoft enabling it.

Dan

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