How Nokia benefited from going Windows Phone vs Android
A recent Forbes article states Nokia may finally be starting to see a reward for their decision to go Windows Phone vs Android.
It notes certain advantages Nokia has reaped by using the Windows Phone OS. These include:
1) Setting themselves up as a 3rd ecosystem, something carriers appreciate and which helped win them shelf-space and special promotion which they would not have given to just another Android handset OEM.
2) Marketing support by Microsoft, again something Google would not have bothered with with such a variety of OEMs.
3) Being part of an ecosystem they can dominate – with more than 80% of the market Nokia is Windows Phone, and Microsoft can not allow them to fail or be purchased by anyone else – if Nokia is to be purchased it has to be Microsoft.
Here is some items not touched on by the article.
4) Research and development expenses were $7.8 billion in 2010. In Q4 2012 this had reduced by 1/3 YoY, mainly by no longer developing Symbian and Meego. If they went Android they would have been caught up in the specs race to a much larger degree than now, which would have kept this budget high.
5) Platform support payments of $1 billion a year – also something which Google would never have paid.
Of course the question remains if Nokia could have been better off going Android.
I suspect if Nokia chose Android in 2011 they would not now be in Samsung’s position, but rather something more akin to Sony.
Nokia does not have Samsung’s vertical integration (from screens to processors to RAM to storage), which allows it to cheaply create a large variety of handsets with the very latest technology, and in addition I do not believe they would have slavishly copied Apple like Samsung did – a key reason for their success.
They would still have been shunned by carriers in US, who did not need a 4th Android OEM on the shelves, after Samsung, HTC and Motorola. While initial sales make have been a lot stronger, due to the greater market acceptance of Android, profit would have suffered like for most Android OEMs. Nokia could like HTC be selling 10 million Android smartphones and still be going bankrupt.
Of course all of this is a moot point at present – Nokia did chose Windows Phone in the end, and are now playing the hand they dealt themselves. Surly Nokia fans who are anti-Windows Phone should however bear in mind the advantages it brings Nokia – billions in saving in terms of R&D and platform support payments, accelerated development due to not having to develop the OS itself, better market penetration and better shelf-space due to not just representing an OEM but a whole ecosystem, and a direct influence in the development of the OS.
Thanks Sarkis for the tip.