What the Web Is Saying: Nokia Partners With Microsoft

Its not exactly a surprise, but now that its official, the Nokia-Microsoft partnership is still stunning in many ways. It shows how desperate Nokia is and how willing they are to cede control to Microsoft in a bid to stay alive. Its also a recognition that the smartphone market in just a couple of years has become a two-horse race, leaving former powerhouses Microsoft and Nokia on the outside looking in.

There are huge implications and tons of questions, from execution to integration and how Nokia will fare as it weathers two years of transition betting the farm on a single, emerging OS.Heres a sampling of what the web is saying about the deal, its implications, potential pitfalls and the reasoning behind it. On the whole, observers dont seem to see much good coming from the partnership.

In an e-mail note, analystDavid McQueen, principal analyst at Informa Telecoms & Media called the partnership a make or break strategy that will give Microsoft scale and inject more competition into the market, which carriers will welcome. But he questioned the wisdom of the move for Nokia:

This may not be the best move for Nokia and it is questionable how open Microsoft will be to work with. Even if Nokia fear Googles dominance, an open platform like Android would allow much more possibilities to Nokia.Also, two losers dont make a winner, particularly given their scale and cultural differences. Its hard enough for massive companies to innovate on their own much less with another massive partner with a completely different culture. Whether Steve Ballmer and Elop can be ! the whit e knights that the operators are looking for will depend largely on the ability for Nokia and Microsoft to execute their partnership effectively.

Others raised similar concerns, including analyst Bob Egan who tweeted that much comes down to execution, which hasnt been a strong suit for Nokia:

Execution has been Nokias shortfall yet now it seems they are taking on even more execution complexity. Was hoping for simpler more focused.

The Armed and Dangerous blog said the moves by Nokia will fragment the company into confusing factions that wont be able to execute on their different goals:

The reorg may dissipate Nokias people and energies into so many officially-sanctioned missions that it cant execute onany of them in fact I think thats the outcome to bet on. Its the company thats burning now, not the platform; I would no longer bet on Nokia surviving another 24 months.

Nokia CEO Stephen Elop, however,answered critics on Twitter with a quote, effectively responding to a statement by Google VP of Engineering Vic Gundotra earlier that Microsoft and Nokia were two turkeys that didnt make an eagle:

Or this: Two bicycle makers, from Dayton Ohio, one day decided to fly.

Rene Schuster, CEO of TelefonicaSAs O2 mobile business in Germany, told the Wall Street Journal that Nokia and Microsoft bought themselves some time and had a pretty good shot at trying to get it right:

Strategically it makes sense, I think actually both parties win. Nokia still is a powerhouse. I know people have been talking doom and gloom and all! that, b ut they have significant market share and they still have a huge customer fan base. From a Microsoft point of view, Microsoft will actually benefit with the positioning and the Nokia fan base. Nokia gets an operating system that we all agree in the industry is really, really good, and if theres any criticism that we have, [it] is what took them so long?

Tech blogger Robert Scoble added that the deal, while not popular with Nokia fans, will prove to be a good one in the end for Nokia, helping it attract the attention of developers.

Nokia just doesnt have the right people to play in this new world. They needed to join the engineering teams at Nokia who know how to build great hardware with someone else who knows how to build services. That someone else is Microsoft. No one else was as strong a fit and if you think Google is it, well, sorry, no. That would be even worse for Nokia because Nokia needs to have something different than HTC has (Nokia cant compete with Chinas brightest minds).

But Tomi T. Ahonen, a former Nokia executive and book author expressed shock at the partnership, especially becausehe dismissed Elops recent memo about the state of Nokia as a possible fake. He said today this was the beginning of the end for Nokia, something the company will regret long into the future. He said the evental abandonment of MeeGo and Symbian means much of the work and research that went into those platforms is for naught. And Ahonen said it will ultimately slow down Nokia, not speed it up:

So, all Nokia R&D and product development guys need to be retrained for Microsof! t abilit ies, tools and methods. This is not learning new, this is unlearning the past, and re-learning the same but by the vocabulary, methodology etc of another company. That is a huge internal training effort, huge, for what? Will definitely be costly, and there will be very many times a Nokia contact, internal or external, will now see as the automated reply I am not available now, I am in training haha.. Yeah, Nokia is moving to internet speed exactly how? This means the whole organization is mummified for at least what, 18 months? All processes will now be made slower and in the end, will they be any faster when they have to often consult with their Microsoft partners on issues (rather than internal Nokia colleagues). Yeah.. Look up Sony and Ericsson, how long it took for those two partners to understand each other. Or check Alcatel and Lucent. And this can very well end belly-up, see Daimler and Chrysler. It will not make Nokia a more responsive and modern company. At least not for the next 18 months, maybe longer. And the end result wont be something faster it was today. Not with this partnership.

The partnership brokered by Elop, a former Microsoft executive, led some to question if the ultimate end game is a total buyout of Nokia by Microsoft, somethingChris Selland raised in a tweet:

If Elop was brought in to sell phones its the wrong move. If Elop was brought in to sell the company, its the right one.

Nokias embrace of Microsoft will have a huge impact on longtime Nokia developers, who have been migrating to QT, the software framework Nokia pitched as a bridge between MeeGo and Symbian. Now with both those platforms heading for the door, many developers feel burned. On Forum.Nokia, developers sounded off on the plans, with many dismayed at the news:

Wow what can I say, Nokia just flat out killed any enthusiasm I had to develop on Nokia platforms, I never have and never will use a Windows platform. You have just killed QT, even worse killed the most promising OS out there in MeeGo. Elop is the worst thing that has ever happened to Nokia.

Avi Greengart, an analyst with Current Analysis pointed out in a tweet that the deal with Microsoft still doesnt address the exploding market for cheap smartphones:

So thats the strategy at the high end. How does Nokia fend off competition in emerging markets?

ZDnets Mary Jo Foley, who covers Microsoft, wonderedwhat Windows Phone 7 manufacturers such as Samsung and LG will do now that Nokia is partnering with Microsoft:

Nokia didnt become just another Microsoft handset partner via todays agreement, like HTC, LG, Samsung and Dell. According to the announcement, Nokia would is going to have direct input on the future of Windows Phone, influencing key areas like maps, imaging and the marketplaceSo if youre HTC or Samsung, do you keep your eggs in the Windows Phone basket or put more in the Android one?

Despite Nokias belief that it faced commoditization going with Android, others still wondered why Nokia wasnt open to multiple platforms if it wasnt sticking to its own. Analyst Ray Wang conveyed the following in two separate tweets:

Nokia should have bet on multiple platforms if they werent going to h! ave thei r own [...]If you dont have your own platform, you are relegated to being a slave to someone else. Thats just how it is.

Analyst Michael Gartenberg added a number of interesting quotes, questioning the logic behind the deal, which seemed to be motivated by fears of Apple and Google. Gartenberg tweeted:

The enemy of my enemy is my friend is usually not a good basis to form a partnership.Marry someone because you love them not because you share a common foe.

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