Microsoft acquires Nokia: Will two turkeys make an eagle now?

  • 20-Sep-2013

In early 2011, Nokia significantly shifted its mobile platform strategy, preferring to place its bets on Windows 7 for smart phones ahead of its own Symbian platform. Vic Gundotra (a Google executive and a Microsoft General Manager prior to that) famously tweeted then, “Two turkeys do not make an eagle.”

Ouch. A bit harsh, but what must have hurt more was that it was also true.

Microsoft and Mobile

In recent years, Microsoft’s mobile strategy has been confusing – not just to customers but perhaps also for Microsoft’s own teams. Eventually, Redmond shipped a slick and shiny Windows 8 OS and won points for aesthetic appeal as well as cool design (something that you don’t normally associate Microsoft, Xbox notwithstanding). So now, Microsoft at least has some clarity on their smartphone strategy, if not commensurate marketshare.

Nokia's Fall

Looking back, Microsoft’s mobile muddle and largely missing the smartphone revolution perhaps does not surprise anyone. But what has been stunning is Nokia’s fall from mighty to now minuscule marketshare. Nevertheless, with Microsoft acquiring Nokia’s mobile phone business, it’s worth revisiting whether two smartphone also-rans can reverse their sliding fortunes or if the acquisition will only compound their insignificance.

Truth be told, I have a soft spot for Nokia. My first cell phone was a Nokia and in those pre-Twitter/Facebook days, Snake was what you whiled away your time on. So, a few months ago I bought a Lumia phone (partly for old times' sake because I feared that I wouldn’t be able to buy a Nokia phone a few years down the road) after years of using Blackberry/iOS/Android devices.

Now, we all know that the mantra for mobile success is "the ecosystem," and much has been said already about how iOS and Android ecosystems dwarf the Windows mobile ecosystem in terms of number of apps and developers.

What usually gets overlooked in those broader discussions is user experience and relevance – and Nokia/Microsoft doesn’t score very high on that front.  Based on my personal experience, Microsoft and Nokia won’t soar unless they remedy this fairly quickly.

The Primacy of User Experience

First the basics. Unlike my ancient Android, there is no native speed dial nor an easy app for that. (It may be smart but it’s still a phone, after all.) You’ll have to tap painfully numerous times to make a call. You could never log out of the Skype app, and Bangalore did not like being woken up in the middle of the night when my North American friends pinged me (though now there’s a workaround) .

The practical utility of the mobile-Office suite is reduced because they don’t handle track changes/comments when you’re reviewing documents with the team. There is no officially-sanctioned gmail app and what's on offer there provides only a subset of the functionality I need. 

Nokia’s maps app called "HERE" (licensed to Microsoft as part of the acquisition) is also outdated. When my colleague Apoorv visited Bangalore a few years ago, Nokia’s navigation / driving directions app was state of the art. Now, sadly they’ve fallen behind, with outdated location data for even a large city in what is a top-3 market for them globally. 

Of course, I like many things about my Nokia Lumia phone, but If they want consumers to switch from other smartphones, it’s going to be a Herculean task and they need to address the utility and user experience part fairly quickly.  Microsoft’s financial muscle will provide some breathing space for Nokia, but that won’t be a differentiator because they’re up against deep-pocketed rivals in Google and Apple.

Implications for Your Enterprise

Firstly, you’ll notice that in our Enterprise Mobile Technology evaluation report that many mobile platform vendors do not support Windows Phone apps. So, your choice of cross-platform development and deployment tools can be a bit restricted there. Secondly, even if you have a BYOD policy, most likely a majority of your employees won’t be carrying Windows phones, except in a few markets where Microsoft/Nokia have been historically strong.

To end with an avian metaphor, the challenge for Microsoft-Nokia is to break out of the chicken-egg situation in which they find themselves.  In the meantime, tailor your own mobile investments accordingly. You'll find our evaluations of 21 leading mobile platform vendors very handy.

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