Nokia and Microsoft, not sitting in a tree
While I'm late to the party commenting on this (holidays, what can you do), you may have seen numerous news reports about Nokia considering Windows Phone 7 as an OS instead of (or in addition to) Symbian and MeeGo.
Context & Ripple Effects
The question of whether Nokia might ship a Windows phone has been open since September, when VentureBeat asked whether Nokia would build Windows phones at all (asked outright back in September). What is new at year-end is that the idea has hardened into a reported option: Nokia is said — still unconfirmed — to be weighing Windows Phone 7 instead of, or alongside, its own Symbian and MeeGo platforms.
The timing matters because Microsoft only launched Windows Phone 7 in October, meaning the platform entered the market without the world's largest handset maker and spent its first quarter carried by licensees like HTC and Samsung. A Nokia defection would be the single largest validation available to a platform that is still debating whether its strict design guidelines leave manufacturers enough room to differentiate.
First-order effects
- If the reported consideration becomes reality, Microsoft gains the scale partner Windows Phone 7 lacked at launch, while Nokia's Symbian and MeeGo roadmaps — and the developers committed to them — face an immediate credibility problem.
- Nokia's current licensees-free position ends either way: adopting Windows Phone 7 means shipping under the same tight design guidelines that Samsung and HTC already chafe against.
Second-order effects
- Samsung, HTC, and LG would find their differentiation inside Windows Phone 7 squeezed further if Nokia joins as the flagship hardware partner, intensifying the existing debate over how much expression the design rules allow.
- MeeGo's remaining ecosystem partners and component suppliers would have to re-price their commitments to an OS whose anchor backer was publicly shopping for alternatives.
Third-order effects
- A Nokia-Microsoft pairing would accelerate the consolidation of smartphones around a small set of operating systems — Apple's iOS, Google's Android, and potentially a Microsoft-Nokia bloc — pressuring every smaller platform to find a patron or exit.
- It would also mark a structural reversal: the dominant device maker of the feature-phone era buying its mobile software rather than owning it, trading platform control for time-to-market.
The trend: Smartphone operating systems are consolidating around a handful of backed platforms, forcing even the largest independent handset makers to choose between owning an OS and licensing one with real scale.