Nokia Eschews Android For Fears of Commoditization

By Clint Boulton  |  Posted 2011-02-11 Print this article Print

So I was reading AllThingsDigital reporter Ina Fried's live blog notes of Nokia's blockbuster, bet-the-company play to put all of its chips on Microsoft Windows Phone 7.

We knew this was coming, especially after Google telegraphed it with Vic Gundotra's "two turkeys don't make an eagle: smackdown.

My BS detector was set to high alert because I was scanning to see why Nokia CEO Stephen Elop chose Phone 7, essentially a fledgling OS few people seem to be interested in that has shipped only 2 million units.

(Yes, I realize Android growth was initially stilted, but this is Microsoft, which has cachet in the mobile market, however flawed it became under Windows Mobile.)

So I found this to be the interesting part of the Q&A period:

10:23 am: Why Microsoft rather than Android?

Elop: What we assessed essentially was three options: internal options with MeeGo and Symbian. Worried about expanding to low-end price points and quickly develop their own ecosystem. Those two things make it difficult.

"We absolutely spent time with our colleagues at Google." There were pros to chooising (sic) Android. "It's moving very quickly. It's gaining share."

"Our fundamental belief is we would have difficulty differentiating. The commoditization risk was very high."

I'm not sure about low price points. There are cheaper Android phones. That last line is what stood out to me. Elop is right: Android has become highly commoditized in two short years. It's growth in 2010 has been amazing.

Motorola, Samsung and HTC are beating each other up in the market, but if you've seen their growth stats from IDC, you know they're doing quite well.

So Elop fears going with Android won't help Nokia stand out. Rather than bet on a proven horse, Nokia picks an old partner in Microsoft.

This is more risky in my opinion. Not for Microsoft, which could use a big-brand hardware vendor who knows a little something about smartphones -- okay a lot of something -- but it's a big, bold bet by Nokia because WP7 is such an unproven quantity.

We know that people want Apple's iPhone and the passel of Android devices, increasingly more than they want RIM Blackberries. We don't yet know if people want WP7 devices, whether they're on hardware from HTC, Samsung, LG or whomever.

People may well want them, but it's just not proven yet. Nokia and Microsoft could be those turkeys Google was talking about.

That will mean more gobble, gobble for Google and Apple. |

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