Many assumed that Microsoft’s agreement to buy Nokia’s handset business would herald its debut as a fully fledged smartphone maker, and the end of close partnerships with other Windows Phone vendors. However, Huawei says it still plans to support the operating system, a welcome endorsement for the OS, but one which raises many potential conflicts of interest for Microsoft, assuming it completes its acquisition.
Like Google, with its purchase of Motorola Mobility, Microsoft will have to strike a balance between pushing its own Windows Phone and Windows 8 devices, and creating an ecosystem of partners for handsets and post-PC products as it has in the past for PCs. Since Nokia was responsible for the vast majority of Windows Phone sales, and was the only OEM which had made WP8 its primary platform, it would be logical for its new owner to defocus on its licensing program and adopt an Apple-style approach of fully controlling a hardware/software offering.
However, the software giant was quick to insist, when announcing the Nokia transaction, that it would continue to license Windows Phone to partners ‘ even though it knows, from the hostility of some long-time PC partners to its own-brand Surface tablets, the conflicts that can spark off.
Richard Ren, a senior executive in Huawei’s European consumer business, told The Wall Street Journal that his firm would continue to expand the Windows Phone range, which currently consists of just one model, the Ascend W1. Like many operators, the OEM is probably keen to maintain a fallback operating system to avoid over-reliance on Google, and to please carriers which want a viable ‘third way’ to be available alongside iOS and Android. It remains to be seen whether the other main WP8 vendors, Samsung and Microsoft’s longest-term mobile partner HTC, also stick with the OS.
Meanwhile, it has also emerged that Nokia may have been experimenting with Android handsets prior to the Microsoft deal ‘ a move often demanded by shareholders to expose the vendor to larger addressable markets. Such developments may have sparked Microsoft’s decision to upgrade its Nokia alliance from close partnership to full ownership. If Nokia had remained fully committed to a WP8-only smartphone policy, there would be little point to the expense and disruption of a takeover, but that situation would change significantly if the OEM adopted a multi-OS strategy, leaving Windows Phone with no flagship supporter.
Nokia’s deal with Microsoft was due for renegotiation at the end of 2014, and a small team within the company was experimenting with a possible switch to Android, according to sources who spoke to the New York Times.