Today, Microsoft shattered any speculation that it was about to release its own Windows Phone device. There was a lot of expectation after the previous week’s Surface announcement that the company may have the Windows Phone 8 enter the market dressed in its own hardware. But those rumors have been quashed by Microsoft’s senior marketing manager, Greg Sullivan, stating, “We have a strong ecosystem of partners that we are very satisfied with.”
While HTC, Huawei, Samsung, and Nokia must be happy to hear that Microsoft enjoys their company, they should be a little concerned about the partnership. Microsoft’s Windows Phone 8 just sank Nokia’s latest entrant – and subsequently bottomed-out Nokia’s stock this morning – by releasing a product that won’t run on the Lumia 900. But did Nokia ever plan for the Lumia 900 to sell extensively?
While the buzz around the phone dominated the news through April, with Nokia reporting they were selling out of Lumia 900s, other reports suggested that they were shipping low quantities, possibly to produce a manufactured buzz around a last-ditch effort to gain market traction. They even paid AT&T to put the phone in store employees’ hands. But why push a phone so hard, if there’s no supply and running on an operating system with an expiration date two months away? With former Microsoft executive, Stephen Elop at the helm of Nokia (not to mention the main driving force behind switching to the Windows OS), he must have been aware that they were about to be left in the dust.
Wouldn’t Elop (who’s known for shaking reality into Nokia by stating “[Our competitors] are taking our market share with an entire ecosystem” as well as ditching the Symbian platform for Windows OS) have been aware of the running specs for WP8? It’s hard to imagine Windows would sink so much into Nokia, providing it with “specific support”, just to let Nokia’s first breakthrough Windows smartphone crash and burn. And this, especially after such a tumultuous launch.
So why would Microsoft not enter into a market that they desperately need to compete in? Even the release of Surface was a clear sign they’re aching to produce their own branded physical devices. As well, there are reports of more mobile patents for its own co-operative touch pen and other mobile functionality. And the market has been positive about Microsoft’s efforts.
The excuse that they’re simply happy with their current environment is hard to buy (not if that happiness involves actively firebombing Nokia and Elop, who they’ve propped up for the past year). Or that they can compete in the mobile ecosystem, the same one that Elop reprimanded Nokia for missing out on, without a solid physical device.
Meanwhile, Apple is moving into a secondary phase of dominating the market, moving to deeply integrate valuable social media properties into its phone – recently adding Facebook to its mix, and reports today suggesting that Yelp will be next to worm its way into Apple, with Yelp reviews showing up on iOS 6 maps. Microsoft’s now-confirmed Yammer purchase suggests an enterprise ecosystem, one that RIM is increasingly unable to fill, and which Apple and Android haven’t committed to entering. And as RIM decays, the ground is fertile for Microsoft to grow, but it’ll require the right device, one that’s secure and runs on a native platform.
The two companies have been lazily flowing closer together over the past year, and even if Microsoft doesn’t want to buy Nokia (they probably do), they may be forced to make the purchase. The final confluence between Microsoft and the No. 1 phone manufacturer for the past 14 years running at an incredibly low valuation would provide a solid mobile push forward that both companies require.
Both companies have shown their ability to reinvigorate their product line. Fortunately, it’s coming at a time when the only competing smartphone company with an enterprise-focused OS is drowning in its own lack of innovation.