Redmond Diary

By Andrew J. Brust

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Nokia and Windows Phone: What Could Still Go Wrong

The much ballyhooed release of Nokia’s first Windows Phone handsets finally took place Wednesday at the Nokia World event in London. There had been a lot of anticipation building up to this “reveal,” and it is genuinely a watershed moment for the Windows Phone platform. That’s because Nokia’s adoption of Windows Phone brings several firsts:

  • For the first time, a major mobile phone player has standardized on Windows Phone as its exclusive smartphone platform.
  • For the first time (apparently) an OEM will be working actively with carriers to see to it that Windows Phone will be well-promoted and featured prominently at retail points of sale
  • For the first time, a Windows Phone OEM has within its comfort zone the ability to push products out to numerous global markets (not just North America, Asia and Western Europe) and to manufacture handsets at price points that can work in those markets
  • For the first time, a major mobile hardware company has a self-interest, if not its self-preservation, at stake in the success of Windows Phone.

Now that the first two Nokia Windows Phone handsets, the Lumia 800 and 710, have come out, Windows Phone can stop waiting. But it also has to stop merely hoping, and start actually achieving. This is a big deal, but this is not the finish line. And make no mistake, the odds are still stacked against Windows Phone. The challenges are not insurmountable, but they are numerous and they are formidable. Among them:

  • Windows Phone needs to be an express stop for app developers; right now it's a local station open during limited hours. Although there are now more than 35,000 apps for Windows Phone -– a very impressive number for a phone that's a bit less than a year old –- there are numerous major or important apps that aren't on the platform. Even apps on Windows Phone have more token representation than on iOS or Android. Compare the lone ESPN Score Center on Windows Phone to ESPN's app presence on the iTunes App Store, or try searching for "ESPN" on the Android Market and see what comes up.

    Likewise, Windows Phone has Angry Birds, but only one version of it, as opposed to the three versions on the other two major smartphone platforms. Will this situation improve? Will Windows Phone become a mandatory chennel for apps developers? Or will we keep looking forward to better app availability tomorrow?

  • Windows Phone doesn't have a carrier champion. Apple may not have needed one, given its own retail network, but it had one nonetheless in AT&T. Android had a champion in Verizon. An OEM champion is good, but carriers may be even more important worldwide, and they definitely are in the United States. Will Nokia make this better, especially in the United States, where it has so little influence?
  • The Smartphone landscape is no longer a green field, and even in "the Enterprise," preferences and prejudices are in evidence. IT may have a disincentive in deploying Windows Phone handsets to employees, because those employees may have a strong preference for something else. That wasn't true for Blackberry/RIM in the last decade, and it's not true for iOS in this one. It may or may not be true for Android. Microsoft has an uphill battle even in allegedly friendly territory. It has no home field advantage. Anywhere.
  • Windows Phone hardware has been lackluster. What we've seen so far is mostly repurposed Android chassis with three haptic buttons on the bottom instead of four. What Nokia showed today is better; at least stylistically, in the case of the Lumia 800 (pun intended), but features are still inferior with no front-facing camera and limited on-board memory. Today was a good start. Will the next phones be even better, or will the momentum slow?
  • Marketing of Windows Phone by Microsoft has been weak, and inconsistent. There was a media blast last year, when the phones were launched, and then things petered out. AT&T stores had a Windows Phone section early on, but that seems to have been withdrawn, too. Without strong, sustained marketing, Windows Phone needs to rely on grassroots popularity and word of mouth for growth. I'm skeptical that such viral popularity will spontaneously appear and build. Will Nokia fill the void? I think so, at least in Europe -- but will that build momentum for the Windows Phone platform overall?

Windows Phone has many hurdles ahead. It would be easy for any one of them to foil Microsoft (and Nokia) in the smartphone market. But I (a Windows Phone user) am not sure that it would be so hard to climb these hurdles, and even transcend them.

Microsoft and Nokia can seed the Marketplace with more major, high-quality apps. Nokia can come out with a second wave of handsets that could kick some butt, in looks and in technology. Microsoft can now (finally) integrate Skype into the Windows Phone OS to create consumer appeal and help "bring your own device" Enterprise employees save on their calling plan minutes. Microsoft could decide tomorrow to market and advertise Windows Phone aggressively, and hire the right agency to do this in a hip way, and hopefully in coordination with Nokia. And with that combination of positive changes, a carrier could finally become interested. One example is Verizon (rumored to have had employees onsite in London today) and its 45 percent London-based owner, Vodafone.

Would such a turnaround take perfect alignment of the stars to pull off? Maybe. But determination to win would make this outcome most likely.

Posted by Andrew J. Brust on 10/27/2011

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