Nokia drops first MeeGo phone before launch -sources
Nokia (NOK1V.HE) has ended development of its first smartphone using its new MeeGo operating system before it was ever launched, two industry sources close to the company said. A spokesman for Nokia declined to comment.
Context & Ripple Effects
The scrapping of Nokia's first MeeGo handset is the culmination of a year of visible decay in the program: the device chief behind it walked out in October 2010, and the OS that was meant to carry Nokia's high end has now produced no shippable product. The report lands three days before Nokia's Capital Markets Day, where the company is widely expected to lay out Stephen Elop's strategy.
That timing is what makes it consequential rather than merely embarrassing. Rumors have been building since February 4 that Nokia will announce a software alliance with Microsoft built on Windows Phone 7, and shares have climbed four straight sessions on exactly that speculation. Killing the first MeeGo phone would clear the deck for such an announcement — and Google engineer Vic Gundotra's widely circulated 'two turkeys do not make an Eagle' jab captures how rivals read a Nokia-Intel pairing. Bernstein's finding that Nokia fields as many smartphone software engineers as Apple does across its entire product line frames the scale of what may be abandoned.
First-order effects
- Nokia's flagship roadmap is left with no successor to Symbian above it: if the sources are right, the company enters Capital Markets Day with a dying OS and no launched alternative, forcing Elop to name a new platform direction or face operators with nothing to sell against Android.
- Intel, Nokia's partner in the MeeGo joint effort, loses its marquee handset reference design and must justify the project's continuation to its own developer base.
Second-order effects
- A confirmed MeeGo retreat would make the rumored Windows Phone 7 alliance near-inevitable, handing Microsoft its largest credible hardware backer and reshaping the operator pitch from 'another Linux OS' to 'a third ecosystem with carrier billing muscle'.
- Symbian, which was being wound down toward MeeGo, becomes a longer-lived cash engine than planned — extending maintenance costs but also extending the window during which Nokia's installed base has no migration path.
Third-order effects
- If Nokia exits in-house OS development, the smartphone market structurally consolidates around platforms owned by software companies (Apple, Google, Microsoft), reducing hardware-led vendors to licensees — a template other struggling OEMs would be pushed to follow.
- Open-source mobile efforts backed by hardware consortia lose credibility with carriers and developers unless they can show shipped devices, raising the bar for every subsequent Linux-based phone initiative.
The trend: Handset makers are abandoning proprietary and consortium operating systems in favor of licensing established software ecosystems, concentrating control of mobile platforms in fewer hands.