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NokiaSoft grows stronger by the day

by Scott Bicheno on 8 September 2011, 18:28

Tags: Nokia (NYSE:NOK), Microsoft (NASDAQ:MSFT)

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Biding their time

Among the advantages of being written off is the fact that you're not thought worth attacking. Both Nokia and Microsoft were considered yesterday's news when they were rendered obsolete by the Apple iPhone, and it took both of them a while to face up to that.

But face up they did. Microsoft made the difficult decision to abandon the Windows Mobile roadmap, and Nokia did the same with Symbian. After a year of groping blindly for alternatives they fell into each other's arms once Nokia appointed an ex Microsoft man to the top spot.

There has been much wailing and gnashing of teeth ever since from people who still hadn't faced up to the severity of Nokia's predicament, and even conspiracy theories that Microsoft was taking over Nokia by stealth. But Stephen Elop's decision to adopt WP7 exclusively seemed like a pretty rational one to me: we're doing a rubbish job of creating our own platform and Android is already overcrowded, so that leaves WP7.

It was still easy to deride the NokiaSoft alliance as two fading dinosaurs clinging to each other in a forlorn bid to delay the inevitable, but then the great mobile patent war escalated. Apple attacked Android OEMs and they retaliated. Meanwhile Nokia quietly settled its own dispute with Apple and Microsoft promised not to sue HTC so long as it paid a royalty for every Android device sold.

A major reason they were both able to do this is the strength of their respective patent portfolios - both in terms of number and quality, with the latter arguably more important. Apple's patent portfolio is a fraction of the size of Samsung's, for example, and yet Apple is the aggressor, with Samsung seemingly unable to dig up enough patent power of its own to scare Apple away.

So now we have the ridiculous situation of Google having to buy patents in order to give them to Android OEMs as ammo in their defence from Apple's onslaught. Meanwhile Google is buying a rival OEM, and saying it's doing so to help the others. The fact that Motorola will have a massive competitive advantage over the other Android players is discreetly side-stepped.

When the NokiaSoft deal was first announced I said it would only work if the other OEMs cleared off, in order to avoid exactly the kind of differentiation problems that put Nokia off Android. But subsequent conversations with those OEMs reminded me that having an alternative platform to Android is strategically important to them for many reasons.

At the same time Microsoft has been quietly adding to its stable of Android bitches who have to pay it royalties every time they sell a gadget. Today it added Acer and Viewsonic, and specifically stated the latter will pay royalties.

Also today Nokia revealed the relationship with Microsoft has become so cozy that Microsoft is offering a bunch of productivity apps, for free, on Symbian Belle phones. "Just as Symbian Belle extends the everyday possibilities for social interaction, we wanted to extend the possibilities to manage personal worklife for individuals and employers. Microsoft Apps is another example of Nokia's ongoing commitment to continue delivering value and innovation to Symbian users," fawned Purnima Kochikar, VP of business mobility at Nokia.

Apple's attacks on Android make it very unlikely any WP7 OEMs will desert, as shown by the latest HTC launches. But Nokia will be Microsoft concubine number one for the foreseeable future, and there will be a lot more buzz around the NokiaSoft launches when they finally arrive.

For all their collective failure to anticipate the seismic shift in the technology industry, Microsoft and Nokia must be watching Apple and Google (and Oracle) knocking chunks out of each other with unbridled glee. While they expend time, effort and resources on fighting each other NokiaSoft is getting ready to rumble in 2012. If the two of them gain as much market share as many have forecasted, Apple and Google might conclude they've been distracting each other rather too much.

 



HEXUS Forums :: 8 Comments

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Excellent piece - I found it informative and insightful

I really hope Nokia+Microsoft do make a good showing with WP7 next year, if for no other reason than if they become successful will Apple try and sue them. If so, then I suspect that the potential countersuit based on a combined Nokia + Microsoft patent portfolio would be a sight to behold - and damn near irresistible. So, for that reason alone, I suspect if Apple does try going after WP7 then they'll pick on a softer target - say HTC (again!).

Just as long as NokiaSoft launch their new phone by June (when my current contract comes up for renewal). ;)

Microsoft and Nokia must be watching Apple and Google (and Oracle) knocking chunks out of each other with unbridled glee.
For some reason (Friday feeling?) that quote above reminded me of Wacky Races, with Apple as Dick Dastardly. :D (and Oracle as Muttley of course).
crossy
Excellent piece - I found it informative and insightfulwill Apple try and sue them. If so, then I suspect that the potential countersuit based on a combined Nokia + Microsoft patent portfolio would be a sight to behold .

Apple know full well that Microsoft can go toe to toe with them when it comes to legal disputes and patents - They have a long history of it.

It is unlikely Apple will stretch its resources into attacking Microsoft while going after Samsung, Google and HTC - but even so, a counter attack by Microsoft/Nokia would probably cause too many issues for Apple.

I think Apple has attacked HTC and Samsung because it feels they can bully them - They know full well they can't bully Microsoft.
Isn't Microsoft a large share holder in Apple? I assume that alone would prevent commi Apple sueing M$ re: Win Pho 7?

Any update on when the Samsung Galaxy Win Pho 7 version will be released?
Denis_iii
Isn't Microsoft a large share holder in Apple? I assume that alone would prevent commi Apple sueing M$ re: Win Pho 7?

Intel possibly are, i don't think Microsoft are though?
I believe Microsoft did have share but they were NON voting shares and from what I have gathered they sold the shares in the company a while back.

It's always been a game of cat and mouse but Nokia has been in the phone business for a rather long period and with MS researching a lot of hardware these days you'd like to think they will have plenty of patents in the drawer. Especially with the Zune which pretty much covered most hardware you would see in a phone.