Greg's bite: Microsoft pays Nokia $1 billion to use Windows 7?
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Greg's bite: Microsoft pays Nokia $1 billion to use Windows 7?

By Greg Mills

Talk about mutual desperation or a marriage from hell. "Bloomberg" reports that Nokia has held out for US$1 billion from Microsoft to use Windows 7. Microsoft head honcho Steve Ballmer seems to think he can buy his way into the smartphone market that Microsoft abdicated over the last few years.  

Nokia and Microsoft both have seen Apple eat their market share with the viral iPhone and iOS since it was launched. At one time Microsoft had some traction in the semi-smart phone market with its rather primitive phone software. The market shunned the Microsoft OS as it was light years behind Apple's iOS. Nokia, likewise, had a giant share of the dumb phone market and has seen its share drop dramatically since the iPhone 1 taught the world what a true smartphone could do.  

A few weeks back the CEO of Nokia famously pounded his chest with a visceral proclamation of defeat at the hands of Apple and Android. The dumb phone market is doomed to sink, to represent a minor league market as consumers choose smart phones as the difference in price between dumb and smart phones is erased. Why buy a featureless cell phone, when for the same money you can get a full featured smart phone?

Nokia, despite the enormous market share they enjoyed, failed to realize the days of  the "just a cell phone" devices was over. Now, too late to the party, their desperation has led them to "jump off a burning oil platform into the sea." The dramatic description likens staying with the status quo and being burned to a crisp by Apple or jumping into unknown waters seeking software solutions from an outside source.  

The development of the Apple and Google infrastructures -- which includes both the operating systems and well developed app stores -- is a very hard act to follow. The Nokia software department was hopelessly floundering; management knew it but was unable to fix the problems.  

Microsoft has seen a very low level of acceptance for its Windows 7, sort of a smartphone comparison to the awful Windows Vista computer OS that was just about completely shunned by the PC market, for a long list of good reasons. With the revelation that Nokia demanded and got a billion dollars cash from Microsoft for adopting WIndows 7 comes the question, "Did Microsoft also pay other handset makers to launch their Windows 7compatible handsets?" If not, the dismal failure in the market place would have me think the handset makers ought to also demand serious money from Microsoft or quit supporting the failed Windows 7 OS.

Sometimes bigger isn't better, it's just bigger. Grasping at "the wrong straw" may well turn out be the last major gaff that takes Nokia down for the count. A failure for Nokia-branded Windows 7 smart phones will likely bring down both Nokia and Microsoft's "too lame, too late to the party" smartphone OS offering that have to be at least a year off.  Apple isn't sleeping at the switch. Already hopelessly behind, another year is an eternity in the fast developing smart phone business of today.

The CEO of Nokia seems to forget that if he likens Apple and Android to the fire on the preverbal oil platform, jumping into the sea is also hazardous as there is a deadly great white shark circling the waters who eats half baked products for lunch. That shark is also Apple. The stock market gets it and has seriously discounted both Nokia and Microsoft, expecting the worst.  Bigger isn't better, it's just bigger -- and more spectacular when it fails. Windows 7 as a platform hasn't been well supported by the developer community so far, despite begging, cajoling and outright bribery by Microsoft.  

The power of a substantial three-point system is impossible to beat. You need solid hardware, solid software and an app store that can compete with Apple and Android. Windows 7 isn't that substantial, their app store is lame and there isn't a good reason for that to change. Nokia should have gone with Android, but that also has its risks as Apple is suing every handset maker who produces handsets for that platform and patent infringement suits are going to hit the fan this year. Look for the Android platform to get seriously hurt by Apple's legal assault.  

The smart money has already laughed off the Nokia/Microsoft collaboration as two has beens, trying to resurrect a dead duck. Nokia stock has taken a 25% hit and there is a strong push within Nokia to push back on the deal with Microsoft, which hasn't been signed yet.

History is full of giant companies that didn't see the direction their market was going and slowly faded to black. As I sometimes muse when I wear my oriental wise man hat, "those who stand too long in the road of progress will be run over."  Nokia and Microsoft Windows 7 are very likely road kill under the runaway Apple smart phone and iPad machines. Both Nokia and Microsoft failed to see the future and will pay the price.

 That's Greg's Bite for today.

(Greg Mills is currently a graphic and Faux Wall Artist in Kansas City. Formerly a new product R&D man for the paint sundry market, he holds 11 US patents. Greg is an Extra Class Ham Radio Operator, AB6SF, iOS developer and web site designer. He's also working on a solar energy startup using a patent pending process for turning waste dual pane glass window units into thermal solar panels used to heat water see: www.CottageIndustySolar.com Married, with one daughter, Greg writes for intellectual property web sites and on Mac/Tech related issues. See Greg's art web site at http://www.gregmills.info He can be emailed at gregmills@mac.com)

 

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