The emperor’s new clothes
I was among those observers who thought, with the sheer amount of expertise and resources these two giants had at their disposal, a decent platform is bound to emerge. But we really needed to see MeeGo Nokia phones by MWC 2011 and it was soon clear to Elop that wasn't going to happen, and even 2013 would be a push.
In fact, after talking to the relevant stakeholders within Nokia and MeeGo, Elop concluded Nokia was on track to launch only three MeeGo devices before 2014, by which time most of the world would have switched to smartphones and everyone would have been writing about Nokia with the same kind of past-tense schadenfreude reserved for the likes of Pan-Am, Polaroid and Enron.
Elop called chief development officer Kai Oistämö on 4 January this year to share his grim findings. "It was truly an oh shit moment - and really, really painful to realize where we were," said Oistämö. "MeeGo had been the collective hope of the company, and we'd come to the conclusion that the emperor had no clothes. It's not a nice thing."
That metaphor seems the most apposite. Nobody wants to be the stupid one who everyone points and laughs at for saying something that runs contrary to consensus, even if it's clearly true. You could argue that Acer, and its strategy of focusing on the volume notebook market at all costs, is another recent example of this, and many people are drawing parallels with RIM, which dominated the corporate smartphone market for so long.
In this case it wasn't a child, but an outsider that stood up and said the emperor wasn't wearing anything, and it's to the Nokia board's credit that it appointed and empowered Elop to do just that. Once he decided on Microsoft the commitment on offer was absolute, but his demands corresponded with that. "We got a deal that was completely different from anything they'd ever done before, and it's because we promised to do our best work for Windows Mobile 7," said Elop.
By February the deed was done. I was surprised because it didn't occur to me that MeeGo development would have been so slow, but once the news was out I agreed with the assertion that Android would have been a bad choice due to differentiation difficulties. But for the same reason thought the deal only works, for Nokia at least, if it's exclusive. Elop insisted in the All Things D interview that he wants the likes of Samsung and HTC to remain because this is a platform, not a handset war now, and their presence will encourage developers, etc to contribute.
It looks like he wants their input, but not their competition, i.e. to have his cake and eat it. The other WP7 OEMs are all fully committed to Android and you have to wonder if they're inclined or even capable of putting as much effort into another platform. I now believe they will continue on the platform for the foreseeable future, but in a half-arsed way and very much as second class citizens in comparison to Nokia.
The recent profit warning from Nokia shows just how little time it has before it becomes marginalised like Motorola and Sony Ericsson before it. The rest of this year looks set to be carnage for Nokia, and its market cap is currently a twelfth of Apple's. Even the low end of the market looks precarious these days. So it may not be overstating the matter to say WP7 is the last chance saloon for what is still the world's biggest mobile phone company by volume.
I attended Nokia World last year, which happened immediately after Elop's appointment was announced. The keynotes I heard and Nokia representatives I spoke to there were still full of prickly defiance - in retrospect, denial. Elop has purged that denial, and any execs that still clung to it. All that's left is a grim admission of reality and a desire to fight back. That's the first battle won, but there are still many more to come.
