Nokia to unveil new OS strategy

Horace Diedu’s awesome Asymco site has really been a revelation since Daring Fireball linked to it last fall. Horace who previously tracked Nokia has a great sense of the cell phone business and has provided great analysis and opinions on the emerging smartphone/feature phone market changes. He’s also started doing great stock analysis on Apple, and does a great job of parsing all the relevant data available about the impact of the iPhone and the iPad. He’s also a chart genius.

Now, new Nokia CEO Stephen Elop during their Q4 earnings call made mention of an announcement coming February 11th concerning the future of Nokia’s OS strategy (which has been a total mess, completely disconnected from the iOS and Android world despite it being 4 years now since the iPhone’s introduction).

Based on these comments, Horace makes a number of bold guesses about what Nokia might do;

  1. There will be a multiple OS strategy.
  2. The US market will be the first to see a new non-Nokia OS. I would guess Windows Phone with AT&T.
  3. Low end devices will remain with Symbian due to price considerations for the chipsets, components.
  4. MeeGo will be phased out in phone products but development will continue for tablet

The biggest bombshell here would be the team up of Nokia and Microsoft in the US market. Ironically both giants are struggling in the key US market (there are other markets which equal the volume share of the US, but the US market is so influential in mind share and application developer attention), unable to get much traction from any of the US carriers especially with both AT&T and Verizon now having the iPhone and Sprint heavily going with Android devices for their 4g WiMAX network.

This move would basically admit that Nokia’s been making nothing but mistakes since the iPhone launched. It creates a huge question as to why Nokia did not outspend everyone and purchase Palm’s WebOS during that intellectual property firesale. Nokia could have purchased Palm back in 2010 and had a lineup of WebOS hardware ready by CES 2011. Instead they let that huge opportunity to purchase a ready modern touchscreen OS slip out of their hands.

Does Windows Phone OS 7 even make sense for Nokia? Elop joins Nokia from Microsoft so he’s choosing the OS option that he has the most knowledge of future roadmap, and you have to wonder if he was brought to Nokia to make this deal. On the surface, some analysts are going to equate this move to the start of a Intel/Microsoft Wintel alliance, “WinNok” is my early guess for the nickname attached, although “FinWin” phones has a nice edge to it. There’s some obvious synergy here between the two. Nokia has no shippable modern OS. Microsoft’s hiatus while retooling their mobile OS has lost a number of their key phone vendors to Android (Samsung, Motorola, Dell), HP to Palm, and even traditional Windows Mobile vendors HTC and LG are in bed heavily with Android. Getting Nokia onboard, would give WinPhone 7 and massive boost in credibility.

However, Win Phone 7 is right now trailing both iOS and Android in capability and before these Nokia devices could hit shelves in America HP looks finally ready to release a new round of WebOS phones. RIM will be launching a host of updated phones using Blackberry OS 6 with improved screens and hardware specs. And if these Nokia devices don’t reach America until this summer, then the updated iPhone will also further complicate the smartphone lineup especially if Apple releases the iPhone to T-Mobile or Sprint. Win Phone 7 is still missing a host of features and capabilities of the iOS/Android combo, and their application lineup is very limited. Win Phone 7 did not have an impressive launch during the key holiday 4th Quarter with 2 million licenses being sold to vendors (how many of those phones have been sold is unclear). Also, Win Phone 7 does nothing about helping Nokia get into the tablet market in 2011, so Nokia appears set to be shut out of the massive mobile tablet market growth of 2011. And there are conflicting signs from Microsoft about whether Windows 8 will be available for smartphones, and that it’s the real the future mobile OS from Redmond which leaves one to wonder what is the real future of Win Phone 7.

The biggest question unanswered is if this FinWin phone is a stopgap measure, does Elop plan to announce some new OS in development that is different than Meego or Symbian? Nokia seems to find itself stuck in the same boat as Apple in 1990s stuck with an older OS and unable to internally engineer a new solution all the while seeing their competitor deploying a new OS. Does Nokia have an OS X plan? Is Win Phone 7 ironically their OS X like savior smartphone operating system? Elop should expect numerous questions  and second guessing around why Nokia isn’t choosing Android as the basis of their future smartphones.

February 11th might mark a huge day in the smartphone wars. The day that the market leader for almost a decade announces that they are no longer going to develop their own smart phone operating system. Is it the start of a resurgence by two huge players in the smartphone industry, or an irrelevant way too late response by two aging dinosaurs?

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