Nokia Announces It Is Microsoft’s Bitch

Let’s call the Nokia/Microsoft deal what it is. An act of desperation by a company who is obviously lost. Did Nokia really need a new CEO to make this move? This is not a strategic move. This is nothing more than raising the white flag. By entering into this agreement Nokia labeled its Symbian OS as a loser. It also positioned itself as nothing more than a hardware manufacturer and bet its existence on its ability to design great phones. It bet its existence on something it wasn’t really great at doing to begin with. When was the last time a Nokia phone made someone stop and look? This is not to say that its phone were or are ugly. They are just not Apple or Motorola or Samsung. So Nokia decided that the only way to penetrate the U.S. market is to scrap its point of differentiation. Will this get Nokia more distribution? Maybe. But now they not only have to sell the consumer on a Nokia phone but on a phone that is not Android, Apple or Blackberry. Where are the cool applications? It hopes Microsoft will have developers recruited and writing them. Where is the cool factor? It hopes it will be able to design great phones that will make people stop and want it. There are a lot of questions in Nokia’s present and in its future.
But one thing is for sure, from my perspective, Microsoft doesn’t need Nokia more than Nokia needs Microsoft. Maybe not even at all. Why? because Microsoft, at least in the near term has a lot of revenue streams that generate billions in free cash flow a month. If Microsoft wanted to, it could make a bid for Blackberry. It could buy Motorola Mobility. Heck, it can try and buy T-mobile. Revenue streams gives Microsoft options.
So, my point is, very simply, that desperation is not strategy. Nokia would have been better off reworking the design of its phones, and hiring some top notch coders to revamp its operating system so it can be on par or surpass Apple’s. Or it could adopt Android. Anything would have been better than the go-for-broke plan they adopted.