Microsoft, Nokia and the prospect of hanging

Like any strategy, this one hinges on carrying it off

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Dr. Samuel Johnson, in the 18th century, observered that "The prospect of hanging concentrates the mind wonderfully." So it is with Microsoft and Nokia, both of whom have been facing that prospect in the fast-growing and fast-changing mobile market.

The idea is simple: Nokia adopts Microsoft's Windows Phone 7 as its smartphone OS. Win-Win, as they say.

Unless they don't achieve the one thing that Microsoft CEO Steve Ballmer clearly sees as the sole criterion of success: selling, sooner rather than later, a ton of smartphones.

I like the idea, at both the enduser/consumer level and the business level. I think Nokia has a design sensibility that's closest to Apple's: both companies are content with utilitarianism. That could result in Nokia smartphones that grab enduser's emotionally in a way that, maybe, many Android phones don't so far. (And yes, there are exceptions, such as Samsung's popular Galaxy S phone, with a new model due possibly on Monday February 14).

Windows Phone 7 also gives Nokia opportunity for innovation, building on an innovative, fresh, and compelling user interface. Company executives have hinted that Microsoft will be giving them more latitude to work with the OS. That's a risky move, since WP7 was created in part to achieve a consistent user experience on different models and brands of smartphones. So the extra latitude could mean that Nokia has more license not with the UI itself but with the underlying kernel and integration features.

(Symbian application developers face a touch choice: there's little future in that OS platform. They'll need to make a choice on what smartphone direction to take. I think Microsoft and Nokia can make a compelling case for transitioning to Windows Phone.)

But how quickly will Nokia move to bring out the first of a sustained Windows Phone product line? IDC's Ian Fogg says he was troubled by the vagueness of Nokia executives on when they might bring products to market. "They've said, in effect, that the future of their smartphone business isn’t in any of their currnet platforms," he says. "They need to have a speedy transition and ship Windows Phone 7 phones as quickly as humanly able." Nokia has a history of delays or glitches with a number of its E and N series smartphones, he notes.

Fogg says its clearly in Microsoft's interest that Nokia beging scaling up with a Windows Phone product set in 2011, not 2012. Nokia's manufacturing scale can give Windows Phone a much greater visibility in many more markets.

If Nokia can create phones that consumers want to buy, the volumes will start driving down the costs of both hardware and software, according to Fogg, enabling both companies to shift Windows Phone from the high-end to the booming mid-range market, where an array of Android phones at different price points are finding success.

Nokia also may have a better feel for marketing and advertising Windows Phone handsets. So far, these efforts by Microsoft and its carrier and handset partners have been dismal: boring or cutesey or just lame. Apple continues to crank out ads that make the TV viewer the iPhone (or iPad) user, emphasizing the device's UI, actions, and activities. The Windows Phone marketing effort keeps trying to sell a concept: that WP7 phones solve the alleged problem of spending too much time wrestling with another smartphone. What's wrong with that idea is that most consumers are not switching from one smartphone to another, so they don't have a point of smartphone comparison. They're upgrading from a feature phone to a smartphone for the first time.

So, I think the alliance can work. But the two parties have to work, hard, at making it work. Because the hangman's noose is waiting.

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