On February 10, 2014, the Wall Street Journal published an article by Sven Grundberg and Shira Ovide, “Nokia Releasing First Android Phone”. Nokia has sold its handset business to Microsoft®. So this new phone, which will be sold by Microsoft, will mark a radical departure in product marketing strategy for the business.
What’s radically different here, is the expression of a new pragmatism on the part of Microsoft. If most consumers of smart phones (from the remaining markets promising dramatic sales growth, meaning emerging markets) are buying the Android O/S, then why shouldn’t they buy them from Microsoft? Any success Microsoft may realize from an effort to compete at the low end of the market will, of course, enhancing Nokia’s ability to justify its existence as a revenue contributor to the company.
In fact, this decision positions Microsoft as a curiously powerful player in the small, smart mobile device market. Not only does Nokia bring valuable patents to Microsoft, for which Google is presently paying royalties, but this press release points to a new opportunity for the business to earn revenue as an OEM of someone else’s operating system. Neither Google, nor Apple has demonstrated this openness, so this effort is definitely leading edge.
In some ways this positioning runs parallel to Intel®‘s decision to open its foundries to any business interested in exploiting additional capacity. Both Intel and Microsoft, one can argue, still represent the epitome of delivery capabilities, given their extensive, long-term relationships with the biggest companies and organizations in the United States, if not the world. Perhaps governments and very large organizations in emerging markets would rather acquire the smart phones they need from Microsoft, than a set of smaller vendors, with whom they do not enjoy the same trusted relationships.
This announcement, coming so soon after the announcement of Satya Nadella’s ascension to the position of CEO of Microsoft, is sure to be seen as an indicator of the business adopting a new way of thinking about very strategic opportunities.
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