My initial reaction to Nokia, Microsoft alliance was … Nokia is still around? I could not remember the last Nokia phone I saw let alone what compelling smartphone hardware they had in the market. However, I often forget that the marketplace is on a world stage, and Nokia remains number one in overall sales but they find themselves losing ground to Samsung. Even more specifically they are losing ground in the smart phone market from 38% in Q32010 to 31% in Q42011.

So what happened to Nokia? Here are my favorite quotes straight from the mouth of their CEO, Stephen Elop:-

  1. "Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem."
  2. "They changed the game, and today, Apple owns the high-end range."
  3. "Google has become a gravitational force, drawing much of the industry's innovation to its core."
  4. "We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market."
  5. "...Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements..."
  6. "Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem."
  7. "We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times."

I think many people, including myself, question why the match of Nokia and Microsoft (instead of say Android) was the right choice, and considering the current state of affairs how would it change their future. After a ton of reading what was essentially the same analysis over and over again and not being fully convinced, I happened upon Robert Scoble’s take on the relationship:

    1. Nokia has distribution. Distribution Google doesn’t yet have. Nokia has dealers and stores in the weirdest places on earth. Places Apple won’t have stores in for decades, if ever.
    2. MIcrosoft has a great OS. I like it better than Android. If you actually USED a Windows Phone 7 you’d see that to be true.
    3. Microsoft has great developer tools.
    4. Microsoft has Xbox. Which has just been rejuvenated with Kinect (hottest selling product in history, even hotter than the iPad!) IE, some parts of Microsoft ARE cool!
    5. Nokia has great hardware design and supply chains. They always have great cameras, great screens. Supply chains matter. A lot more than anyone thinks (the stuff Apple never talks about, but works its ass off on is supply chain management — I got to see this first hand when I visited China).

Considering all this I think the most telling endorsement came from an unlikely source …HTC. Jason Mackenzie, is the Bellevue-based president of HTC for North America and Latin America and is quoted as saying "Nokia's following a similar lead to what HTC's been doing, in not investing in our own platform, taking solid platforms and filling the gap to deliver a solid experience to the end user".  Mackenzie said Nokia's partnering with Microsoft is "a validation of what we're doing."

Ultimately I think this move will help Windows Phone 7 in the world market much more than it will help Nokia in the North American market. Nokia is still relevant worldwide and is simply in need of a well structured OS with well positioned and mature ancillary services (Zune Music, Video, Podcast, Live, Xbox games, etc.). For me as a WP7 developer this news is fantastic! I want my apps to run on as many devices as possible and in as many English speaking locations as is feasible. This alliance just ensured that one more manufacturer is all in with Windows Phone 7, the twenty thousand registered Marketplace developers should rejoice!