Apple, actually
Ah, Apple. How sick of that word all the other handset-makers must be. There are countless wise-after-the-event studies illustrating what a money making machine Apple is. But however sexy people may think the industrial design on the iPhone is - and I personally find it hard to get to aroused one way or the other - the secret of its success is, of course, software, specifically iOS.
Since the 80s, people have bought Apple products primarily because of the advantages they perceived in the OS. Now the vast majority of Apple's massive sales come from iOS devices and, because you can't get iOS devices from anyone else, Apple is able to charge far more for equivalent hardware than anyone else. This translates to breathtaking profits.
Nokia knows this, and wants what Apple has, but it's not going to get that by joining the Android herd. This is why, as I said at the start of the year, MeeGo is of paramount importance to Nokia. Everyone, Nokia included, knows Symbian is not the answer in the mid and high end smartphone markets. If MeeGo can provide some genuinely unique and appealing features, there's no reason why it can't compete with the other mobile platforms.
But it's been a year since MeeGo was announced, and both Nokia and Intel had been working on next-gen mobile platforms for a while before that. With all the time and resources being chucked at MeeGo you have to wonder why they have so little to show for it, and the natives are getting restless.
Earlier this week some analyst wrote an open letter to Stephen Elop - the new Nokia CEO - and Steve Ballmer - Microsoft CEO and former colleague of Elop - urging them to do a deal over WP7. The rationale is sound - both are struggling in high-end smartphones and Nokia needs a unique platform. So get shot of Samsung, HTC and LG, who are more focused on Android anyway, and start something beautiful.
But there are many flaws in this proposal, most of which are highlighted in a research note also published on Forbes. For me, over and above all the logistical considerations involved with Nokia embarking on a new strategy, Microsoft ditching its partners, and the supposed Nokia R&D savings, the main flaw is that it's Microsoft's platform, not Nokia's. Who runs the app store? Who profits from ancillary services?
In an article highlighting how relatively little return Nokia currently gets on its market-leading R&D spend, all things D reminds us of the following quotes from Elop during Nokia's recent earnings announcement: "Nokia must compete on ecosystem to ecosystem basis. In addition to great device experiences we must build, catalyse or join a competitive ecosystem," he said.
"Whatever the strategy is we outline on Feb. 11, we very clearly ensuring that it will give us the opportunity to reopen markets such as the U.S. and some others, where we have not recently been present."
Elop is referring to a speech he's going to make to investors in London in a week's time. There is much anticipation that a Microsoft deal will be announced, and apparently this is boosting Nokia's share price. I still think this would be a mistake. I don't see how WP7 and MeeGo could coexist, and surely Nokia wouldn't ditch MeeGo before it's even launched. But desperate times could call for desperate measures.
