Nokia, Microsoft head for “Last Chance Saloon”
(Reuters) - Microsoft Corp and Nokia Oyj are loading up for their best — and possibly last — shot at denting a smartphone market dominated by Apple Inc's iPhone and Google Inc's Android mobile software. — If the new Lumia phones …
Context & Ripple Effects
This is the second act of a long retreat. In late 2007 the New York Times already chronicled Nokia's struggle to regain U.S. ground against Apple and Google (Nokia's push to reclaim U.S. sales); by April 2010 Reuters was covering what proved another misfire in Microsoft's latest phone experiment, and by November 2011 analysts were openly questioning whether the Nokia–Windows Phone pairing would get traction at all (analyst doubts about Nokia's Microsoft phones).
What is different now, per the reporting picked up by PC Magazine and Computerworld, is timing: Microsoft has committed to revealing Windows Phone 8 handsets in September with an official device launch in late October, and the new Lumias arrive alongside sibling moves — Kid's Corner parental controls for Windows Phone 8 announced August 30, and the Zune brand being wound down with apps pulled August 31 — signaling Microsoft is clearing the decks behind one mobile bet.
First-order effects
- Nokia's new Lumia line becomes the sole vehicle for Microsoft's late-October Windows Phone 8 launch — if the phones miss, both companies have no second product cycle this year.
- The Zune wind-down frees Microsoft's media team to back the phone platform, but leaves early Zune HD adopters stranded days before the make-or-break pitch.
Second-order effects
- Developers burned by Microsoft's 2010 phone experiment must now decide whether to invest in a third Windows platform, and their build-or-wait calls will determine how complete the Windows Phone 8 app catalog looks at launch.
- Carriers stocking holiday shelves choose between proven iPhone and Android inventory and an unproven Lumia refresh, putting shelf-space terms — not just specs — at stake for Nokia.
Third-order effects
- If the Lumia push fails, the smartphone OS market hardens into an Apple–Google duopoly, and future challengers will need to buy their way into distribution rather than partner their way in.
- A weak outcome would also force Nokia toward more drastic structural options for its handset business than a software partnership alone can deliver — the direction analysts were already pointing in 2011.
The trend: Mobile operating systems are consolidating around two developer-scale ecosystems, pushing laggards into ever-larger all-or-nothing hardware-and-software alliances.