Microsoft And Nokia Deserve Each Other

I can’t stop thinking about this Microsoft, Nokia partnership.

I can’t stop thinking about how desperate Microsoft has become. This deal with Nokia is something that makes total sense if you look at it logically while at the same time completely ignore history.

Nokia needs to cut costs because it’s hemorrhaging market share. Microsoft’s entire business model is finding hardware partners to distribute it’s software. Microsoft is being frozen out of the tablet space most recently with HP announcing their tablet, completely free of any MS software.

They are hungry for partners. It’s what they’ve been doing for 30 years.

So just put Windows Phone 7 System 7 Phone OS Mobile (or whatever it’s called) on Nokia phones and everybody wins.

It’s a match made in….well we’ll see.

In the meantime, asymco has a look at the history of Microsoft’s Mobile partners. I can’t believe how many of the companies went bankrupt.

Remember that famous 2007 Steve Ballmer video, you know, where he’s laughing about the iPhone…

“$500 fully subsidized with a plan. I said that is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine.”…”I like our strategy, I like it a lot”.

Well, as Horace Dediu points out, the man he was sitting beside was then-CEO of Nortel Mike Zafirovski. Nortel went bankrupt two years later.

Robert Scoble says Nokia fans who are disappointed are nuts. Scoble points out that Nokia has a vast distribution system that Microsoft can leverage.

Employees at Nokia have staged a walkout.

My question about the European Nokia customers, how many bought Nokia phones because they were a proud Finish company? Is regional pride a factor? Do Finland cellphone customers buy a Nokia phone because it’s a local company? And now that Nokia phones will be running Windows, will that loyalty evaporate?

I’m sure people in Waterloo, Ontario feel some loyalty to BlackBerry because RIM is headquartered there.

Emotion does play a part in people’s choice of phone. It’s a very personal device, a fashion statement. Steve Jobs understands this. Google understands this (think of their positioning around open). Steve Ballmer doesn’t see this. That’s why he couldn’t see how anyone in their right mind would pay $500 for a phone that doesn’t have a keyboard.

What I’m getting at is this. I think many Nokia fans will abandon the platform and switch to Android. Microsoft will pile $800-million into the Nokia partnership. Nokia will go bankrupt.

UPDATE…Nokia says Microsoft paid “billions” to get Windows Phone 7 on their phones. So they’ve already lost billions, rather than the $800-million I made up for fun.

UPDATE 2…Nokia CEO Stephen Elop denies that Microsoft has paid Nokia billions of dollars. Still, 0 plus 0 is still 0.

“Those who cannot remember the past are condemned to repeat it.”

George Santayana philosopher, essayist poet and novelist.