Microsoft will take a few months to finalize its acquisition of Nokia’s handset business, but the leaks and rumors are already buzzing. Two of the most interesting ‘ a positive one, that Microsoft will greatly enhance the Asha ‘smart featurephone’ platform with Xbox and other software; and a less likely one, that the surviving Nokia company will return to the cellphone business, this time with Android.
Under the terms of the deal, Nokia licenses its brand to Microsoft but retains the rights to use and manage it. The presumption is that the Windows giant will use the Nokia logo for the low end handsets, and merge the Windows Phone Lumias into its own Surface range.
There are some big assumptions here, notably that Microsoft has any desire to be in the unforgiving mass market handset space, especially if this will not be based on a strategy to get Windows to the world. However, if the company is serious about mobility, and is prepared to cut some of its ties to its operating system, Asha is a sound platform with many advantages in terms of its smartphone-like user experience, extremely efficient use of network and handset resources, and low cost to produce.
According to Nokia’s head of marketing, Tuula Rytil’, Microsoft is set to make Asha a “better offer” by bringing key services to the platform. Apparently, this strategy is already being discussed right up to the top level within the software firm, and CEO Steve Ballmer has ‘already stated that some Microsoft services that have previously been restricted to higher end smartphones may come to Asha,’ wrote Rytil’ on the Nokia Conversations blog. ‘They are looking into things like SkyDrive, Office and Xbox.’
Asha, which is predicted to reach 100m people within a few years, would be a powerful vehicle for Microsoft offerings, particularly consumer media brands like Xbox ‘ though some believe it will prioritize Office Mobile in order to give Asha a better enterprise play.
The other option is that Microsoft steers clear of the low end of the mobile device space and kills, or sells on, Asha, in order to pursue a more traditional strategy of defending Windows’ position by pushing it into post-PC devices such as smartphones and tablets.
In that scenario, some analysts believe Nokia might reassert itself in the handset midmarket, where its real strengths lie, and create a new family of devices, drawing on the same engineering and supply chain approach as Asha, but with a fully fledged smart OS ‘ Android or perhaps one of the new-style cloud-oriented systems.
The latter choice could even open the door to using some of Nokia’s own R&D heritage ‘ by adopting Jolla’s Sailfish, for instance, created by former Nokia engineers and based on the larger firm’s abandoned MeeGo Linux project. MeeGo also survives in the Tizen OS, though that has been primarily championed by Samsung. As ZDnet points out, Nokia can use its famous brand on handsets after December 31 2015.
Some do not want to wait that long. A Singapore-based firm, Newkia, was formed just the day after the Microsoft deal was announced, with the sole aim of acquiring Nokia employees and expertise for its own Android developments. Thomas Zilliacus, executive chairman and founder of Mobile FutureWorks, which is backing the venture, told ZDnet that the Microsoft transaction ‘reflects the complete failure of the Windows strategy Stephen Elop chose when he was appointed Nokia CEO some two years ago. Nokia, which only three years ago was the world’s runaway market leader in mobile phones, is today a small and insignificant brand. He spent over 15 years as a Nokia employee including seven as its Asia-Pacific CEO, but left in 1993 and now runs his investment firm ‘ which even tried to buy out Nokia a year ago to turn it into an Android player. He failed to raise the funds then, but aims to tap into Nokia’s undoubted excellent at phonemaking via this new route. Newkia’s core R&D efforts will be in Finland and Silicon Valley. “What Newkia wants to do is to use Nokia knowhow, technology and design to build the world’s best smartphones, but running on Android,” Zilliacus said.