In 2011 when Nokia announced it was throwing its lot in with Microsoft – in that it will use Windows Phone exclusively on its phones – it painted a picture of two players from different areas of the market dwarfed by their respective competition, teaming up in order to impose a larger frame. Like Benelux, or something.
It came after what must have a been a difficult bit of pride swallowing on Nokia's part, admitting that it’s own operating systems just weren’t going to cut the mustard anymore.
Becoming properly unified is the natural extension of that alliance– and can certainly be seen as making Microsoft more dangerous looking as a challenger to the monolith of Apple’s iPhone, and the cabal of HTC, Samsung and Sony smartphones in the Android bloc.
The problem that’s been facing both firms is the same, though for different reasons.
Microsoft made zillions in cash over 30 years of the PC business, and became a huge global operation in the process. It could be said this sheer scale, it’s massiveness alongside its entanglement with laptops and desktops (not that it doesn’t make plenty out of those still), stopped it responding as quick as it might when the world turned its head suddenly towards smartphones.
Nokia at one point, ten years ago say, sat astride the mobile phone market. But as soon as smartphones became the thing, it took the firm an awful long time to come up with some kind of legitimate contender.
The new Nokia Lumia’s are good – but the first phones anyone really thought of as proper contenders was the Lumia 820 and 920. That was in 2012 – the iPhone came out in 2007.
Despite critical acclaim for these Windows based blowers – they’ve not really set the world alight. It seemed like despite proving itself technically capable of producing a very good smartphone (which you could not say before) that might not be enough.
You now needed a have a reason not to go for the iPhone or the latest Samsung/Google collaboration – which is a different thing to having a reason to go for a Nokia.
Presumably there are some at Microsoft eying the Apple model of complete software/hardware offering, which has needless to say served the iPhone business pretty well.
A wholly owned ecosystem not only means you don’t have to share the wealth, but it is presumably much easier to make a nice simple product that just works (to coin a certain bit of hyperbole).
Google is in a similar position having bought Motorola – and we’re still waiting to see a big impact with that. But there are potentials pitfalls to this strategy – i.e. you render your other hardware partners like HTC and Samsung a bit cheesed off.
Microsoft has deals with other phone makers of course, but its market share is in single digits. It has less to loose in terms of the current deals with them, it could be argued.
But it has more to lose if it doesn’t start carving its self out a wider space for itself in smartphones. This could be the beginning of that.