Analysis
A quick look at the initial response to the announcement of Nokia's smartphone partnership with Microsoft says a lot about the respective media. The mainstream have gone for straight reporting, the blogosphere has asked some questions, while social media is generally full of scoffing as part-time experts jostle to out smart-arse each other.
As the headline of this piece states, I think the success or failure of this partnership comes down to exclusivity. While Nokia has to share WP7 with Samsung, HTC and LG it's exposed to exactly the kind of commoditisation Elop fears, but if Nokia is the only handset-maker you can get WP7 on, it has a unique selling point.
Furthermore, while the two Steves talked a good game about all the great things their respective engineering teams are going to do together, surely the presence of these other OEMs will be a massive distraction for both. Microsoft still has to adequately support other partners, and Nokia will have to focus on differentiating from other WP7 handsets first and foremost.
Elop said the mobile ecosystem (I prefer platform) environment is now a three horse race. To run with that metaphor: Elop now looks like a Microsoft Trojan Horse inside Nokia. Within months of coming on board from Microsoft he has virtually merged the two companies, and given WP7 a much-needed boost.
But while old-school Nokia loyalists wail and cry foul, he has also brought the kind of instant influence over Microsoft that few other potential CEOs could have. You could see up on stage how close the two men are, and anyone who thinks this isn't the beginning of the end for the other OEMs on WP7 is grossly underestimating the importance of personal relationships, even at the highest level.
So I think this is the Stephen and Steve show. BBC business journo Robert Peston wrote a blog post on the deal saying that, while he's not qualified to comment on the techie side of things, he had serious concerns about the ability of two such large and geographically separate companies to collaborate in the way that's being promised.
The only way it can work is if Elop and Ballmer are singing, word-for-word, from the same hymn sheet. If their relationship holds up then this partnership will too. And the stronger Ballmer's relationship is with Elop, the weaker it must be with his counterparts at Samsung, HTC and LG.
It's looking like all the mobile OEMs (bar Apple, of course) will be launching new handsets at MWC next week. We know Samsung and SE will launch Android handsets and we expect the LG and HTC launches to be Android too. Meanwhile Moto will be demonstrating its Android tablet.
If Nokia launches a WP7 handset this Sunday, which I expect it to do, then that will say everything you need to know about WP7. The other OEMs are at best half-hearted about WP7 already, and most of their energies are already focused on Android. I think this deal is exclusive, it's just a matter of Microsoft paying off the other guys to abandon whatever arrangements they have with each other.
Once that's done, the tricky bit is how the two companies divide revenues from the platform. Nokia will presumably be paying a negligible amount to license WP7, because both companies know the real goldmine is apps and services. There's a lot of overlap with things like Ovi, Navteq, etc duplicated to some extent within Microsoft.
But I back Stephen and Steve to be able to resolve these matters swiftly and amicably. I think Nokiasoft will be the third platform and will compete well. Nokia will make some sexy handsets and the app/services ecosystem will grow. So my initial feeling about this deal is cautious optimism, and relief that it guarantees Apple and Google won't have everything their own way.
