Jun 14

Windows Phone/Nokia : they are coming close to passing

In March fellow Constellation Research analyst Paul Papadimitriou raised the issue that his new Nokia Lumia, bought in the previous 3 months with which he was very happy, would not upgrade to Windows Phone 8.  He was not happy about this, a Microsoft decision, which resulted in the blog post iPhone theft consequences (Part 3): Is Microsoft about to kill off Nokia (plus HTC and itself)?; this explored the possibility that preventing WP upgrades would harm the short term sufficiently to make the long term untenable.

Yesterday’s announcement from Nokia — that it will shed another 10,000 employees and does not know when the red ink will stop flowing — provides more bad news for Nokia and Microsoft (and for those others like HTC, Samsung, et al who have invested in WP devices).  It is also bad news for the enterprise world, because WP did present a potentially credible ‘in-between alternative’ to the restrictiveness of Apple/iOS and the resolute openness of Android.

Yet the Nokia announcements should not be a surprise.  In a minor way I have contributed (though it gives me no pleasure to say so).  After that iPhone was stolen, and after Paul’s praise for the functionality of his Lumia 800, I had pretty much decided that a combination of Windows (whether WP, RT or Win8) on smartphone, tablet and laptop was the way forward.  I was about to buy a Lumia 800 (a premium smartphone) — until Paul’s analysis, that it would become obsolete within 12 months, changed the whole picture.

After waiting to order until this week (though before the Nokia annoucement), the replacement for the stolen iPhone is not an iPhone (to expensive, too restrictive, too Apple).  It is not a WP phone.  It is an Android one (specifically a Galaxy S II, because the functional advantages of the S III are no greater than the iPhone 4S over the 4 — minimal).

This means that Nokia, and Microsoft, lost the sale.  In losing, I and no doubt many, many others continue to drive Nokia closer to the point where Nokia may no longer be viable.  This is hardly Nokia’s fault.  Rather it is the boneheaded approach of Microsoft which seems intent on assisting its WP partners to an early grave (charging between $75-$90 per device for WP does not help).

Yes, smartphones are evolving into fashion items.  But, as with most expensive fashion items, value matters.  WP7.5 longevity proposition does not provide this.

Unless Microsoft wakes up the enterprise appeal of a common 3-legged Windows platform (on smartphone, tablet and PC) from a mature OS provider to enterprises (Microsoft) is losing one of those legs.  Two-legged stools do not have a natural balance.  Enterprises and employees will continue to look to iOS and Android, at least until WP8 devices arrive — by which time the bleeding of red ink from WP devices may have weakened the providers to the point of irrelevance.

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