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If Nokia survives as an independent company, it is going to shrink considerably. They don't need a lot of people to be a little patent troll still making a product just to avoid the NPE pigeon hole.
They really have good products with the Lumia phones. I think they will make it, however I agree it will probably not as an independant company.
The Lumia hardware is really nice and robust. Lumia with Android would probably sell like hotcakes right now.

Now they are at the mercy of Microsoft, who seem to have trouble wrapping up WP8, can abandon the platform any moment (as they have done with Windows Mobile, WP7), or stop delivering updates for slightly older phones.

You might have a bias against WP. I own a Lumia and the experience is good, WP7 is a very decent OS.
I don't. I also have a Lumia with WP7, and I do like the operating system quite much. What I do not like is the lack of updates and that the Lumia that I bought relatively recently is now already obsolete. Coming from the iPhone, where I had years of updates, that's a few steps back.
Nokia were the kings of mobile back when phones were simple, so why the hell haven't they ditched Windows Phone and made phones simple once again?!

I bet there's a huge market out there for older users that want a simple and usable phone with stripped functionality, and it's a tactic that worked very well for Nintendo when they realised that they couldn't compete with Sony and Microsoft in the console market. A lot of older users just want a mobile phone so they can get in touch with family, send a few texts to people and occasionally browse the web.

If linked with a company like Yahoo (providing mail and other basic cloud stuff) I'd be shocked if a phone that focused on being a phone and not a smartphone didn't sell millions amongst the tech-illiterate and older audience.

Painful metamorphosis is probably the right term to be used here.

They could acquire the smaller and profit-making players in dumb-phone markets and let them function independently - kill their own overheads in "small-margins" game.

Nokia should reinvent their focus to something else - not continue on mobile platform now. Just like they did in past by moving away from cables to rubber tyres and so on... They're late for the tablet game too, but an enterprise centric tactile surface (which is portable too) sounds like a good idea [Sheesh! Given away the idea, but the world would be a better place with it ;) ].

There is a gap in there which they could surely fill. I don't know about Elop's strengths or weaknesses, but for me Nokia is still a severely defocused bloat. Strip down to basics is the only advise here.

Just a few thoughts.

> They're late for the tablet game too, but an enterprise centric tactile surface (which is portable too) sounds like a good idea [Sheesh! Given away the idea, but the world would be a better place with it ;) ].

This is what killed RIM - they bet on an enterprise tablet over their phone market, and failed. The whole "enterprise tablet" market is either ripe for the picking or no-man's land - and I don't think Nokia could have done better than RIM.

When failing, you need to cut back on unprofitable side-ventures, double-down on your core profitable offerings, execute, then re-invest that into new markets.

Nokia do still make some great versions of non-smartphones, I've seen a nice dual-SIM one being aimed at South America via a friend working on the project. However, I think smartphones are where the profit is. Once companies have seen the huge profits Apple have made, they want a piece of that pie. And frankly, who can blame them?

My wife just got a new phone. She wanted a basic phone as she likes texting on a standard phone keypad, and wanted an OK camera on it. She couldn't get a basic phone that did that, so ended up with a low end HTC Android (of the same spec as my mid-high end HTC from last year.) It could be the phone networks just don't want to stock basic phones as they don't make enough money off the contracts for them, they want to sell all the extras. On the flip side, last time I looked at basic phones they all seemed very poorly made and with awful interfaces, which is why I went to a smartphone a few years ago.

There are simple, large print phones targeted for older folk, they mainly seem to be advertised in the little pull-out magazines that come inside TV listing mags and similar in the UK, and during advert breaks on daytime TV.

The problem with your Nintendo analogy is that Nintendo introduced a new market into playing video games (families, non-gamers).

A more accurate analogy to Nokia making dumb phones would be if Nintendo had created a console that appealed to legacy-gamers, people who want to play SNES and NES games. A much smaller (and dwindling) market.

Guess what, there is already a phone that works wonderfully for people who only wants to call people, send a few texts and occasionally browse the web. It's called an iPhone and my parents have one. They perfectly fit the use case you're describing.

They haven't downloaded any apps, they browse the web once in a while, but mostly they use the phones for calling and SMS (and my father checks his email). With their previous Nokia dumbphones, they never even learnt how to use the T9 dictionary.

Of course, it's still an expensive phone, but many of those older people get their iPhones for free when their children upgrade to a newer model.

If that's all they are doing, then any smartphone will do the trick.

If your basically throwing away your old iPhone anyway then sure give it to your parents. For anyone who isn't getting a free iPhone, spending $800 on one would be absolute overkill when you can buy a cheap $100-$200 phone that makes calls just as well.

It is kind of expensive, and relatively easy to break. You could get an indestructable Lumia 900 for $0 on contract for a while and I think it never went over $100. Right now you can get one for $20 on the Amazon Wireless page.
There are multiple problems with your statement ...

- It shows you're an American, otherwise you wouldn't hand-wave the price of an iPhone, even when speaking about phones being given by kids to parents.

- the iPhone seems simple to you because you've gotten used to it. Compared with classic rotary phones, the iPhone is anything but simple - of course, for the provided functionality, the iPhone has a lot of features packed in a tight package that has a pretty simple interface by today's standards. But regarding parents, on the contrary, I've watched my mom struggle with an iPhone, before she got back to an older Nokia model, with a simple key pad and no extra functionality other than SMS.

- because of the specs, the iPhone consumes a lot of battery, even by using it only for your basic needs - it's sure nice to have a phone with a battery that lasts for 7 days of normal usage.

- mobile phones are designed to be usable for 2 years, after which the battery and the hardware start falling apart.

Also, the T9 dictionary was really awkward. I don't think anybody was suggesting that Nokia should return to their older models. I do think that some company in the future will come up with a sexy design and a set of features for simple phones that customers will absolutely love.

- I'm not American. I don't upgrade my phone every year, but when I do the old one usually gets handed over to a family member. I think this is quite common, although some may sell it for a price depending on the age of the phone.

- Turning off WiFi, GPS and bluetooth, you get quite a bit of battery life out of an iPhone.

- I can only answer for the people I've met who are non-technical. They had no problem using an old Nokia phone to make calls, but for everything else (including contact lists and SMS) the iPhone is easier.

The only usability problems I've discovered has to do with the buttons, as they don't discover what the sleep/wake button and silent/ringer button does, and because they think the Home button is an "end whatever you're doing" button, which makes them push that button to end a call (this of course doesn't work since it just returns to the home screen with the call backgrounded).

Since I'm curious, what was your mother struggling with?

- The iPhone hardware has a tendency to last a long time unless the display breaks. My mothers phone is from 2009, for instance. Although I agree that replacing the battery is a problem since you have to know someone with a screwdriver or pay to have it replaced.

I don't really know why my mom struggled with it, but I guess it's because of the tree-like interface, and because normal users are used to rote learn their way around such interfaces, the classic problem of graphical interfaces ... she's used to all the options being available at first glance.

For instance if I wanted to make a call right now on my Android, I would press the green button with a phone icon on it. The logs view would pop-up because that's the last view I've used. To dial a number manually, I would have to select the "Keypad" tab. To search of a contact I have to press the "Contacts" tab, which on Android at least is a different app with a different top bar of tabs. Clicking on a name would show me that person's profile. I would have to do another click on his phone number to actually initiate the call.

This is in contrast with her Nokia phone - to dial a number out of memory, you just need to start dialing the number on the always available physical key pad, then you press the green button, which is also always available on display. To search for a contact, you press the down arrow and then upon selecting the desired entry you press the green button. To look in the logs, maybe to dial the last number dialed, you press the up arrow, dialing involving a press on the green button again.

So basically I think it's because every basic use-case involves a number of 2 or 3 steps that can be easily remembered because all the buttons are on display and there's also some consistency (dialing involves either typing or selecting a phone number + a press on the green button). Of course, she probably could have learned to use an iPhone if she really wanted to. But she doesn't have the patience anymore.

iOS and Android aren't the simple beasts people make them out to be. They're still extremely complicated for the most basic of users.

Also, who on Earth would you buy an iPhone if you didn't want to use it for its intended purposes?

There is a market for a beautiful and cheap phone, and the iPhone isn't a part of it. You could use it as a dumb phone in the same way you could use a chainsaw to cut your steak. It'll leave it in chunks, but it's overkill for what you need.

IMHO Nokia had a promising platform in Meego. Would be interesting to see what would happen if it was given half a chance.
I don't think they have any time left to risk it on going all-in with another platform with non-existent market share. If they fail to get significant momentum with WP8 this year, the kind of momentum they need to actually recover and also replace the Symbian sales, then they need to immediately switch to Android. If they want they can still do Meego on the side. But going Meego-only would be an even worse decision.
Agreed. It's too late now, and it's very sad to see.

If they had gone all-in on Meego a few years earlier, or chosen it instead of WP7 and made it run Android apps out of the box, maybe they would have had a fighting chance.

I'd buy if they went back to meego/harmattan
And for added fun port Dalvik to it, so it can run most Android apps in addition to the native Qt5 stuff. Not going to happen, but one can dream.
They could sell this to a few geeks. But that's it. Meego never came even close to Android in terms of quality. And ern Android would probably not work for Nokia. Nokia is doing exactly the right thing - just years too late.
The main reason they are "too late" is that MS has screwed them - first by limiting the capabilities of WP7 phones, then by betraying them right at the time they launched their flagship and saying there'd be no upgrades to WP8 for ANY phones, and then finally for forcing them to wait forever to get Windows 8 devices out. In my view the Microsoft partnership has been a disaster for Nokia.
Quality is not something you "have" or "not have".

Quality is polish. Android 1.0 didn't have any, but then it became better and better with each new version.

You're not alone in not understanding this. HP trashed WebOS because their first shaky release didn't show "quality". Ditto Nokia and Maemo/MeeGo.

The only way to make a "quality" OS is rub and rub and rub and rub.

Once Microsoft buys them at a suitable price, they've got nothing to fear. Just like they did with Bing, Windows Phone, Xbox etc. Microsoft has deep enough pockets to continue pumping money into Nokia for making WP handsets until they gain meaningful market share.

I am not trying to critique Microsoft here - just that I see that as a likely scenario given the past and current circumstances. It only helps that both Microsoft (with Windows Phone 8) and Nokia (with hardware) are doing things mostly right.

The thing is if Microsoft buys them, I'm not sure how the other manufacturers would react. At least Google promised them to help fight against both Apple and Microsoft with Motorola's patents, and also manufacturers can't just quit Android. But they could easily quit WP8. They must not be very happy about how Microsoft is heavily promoting Nokia's devices already, while making it so everyone else ignores their own.
Microsoft has already started to give Nokia exclusivity and buying them out doesn't change much - OEMs are not not dependent on Windows Phone anyways - they can keep their WP handsets a small affair but they still gotta pay Microsoft on their Android sales in patent royalties, even if Microsoft favors/buys Nokia.

Even if non-Nokia OEMs totally ditched Windows Phone - Microsoft could just take the royalty money and continue to invest it in Nokia and use all tricks in the book to gain some meaningful market share. No matter how you look at it - it looks good for Microsoft.

> has deep enough pockets to continue pumping money into Nokia for making WP handsets until they gain meaningful market share.

I'll believe it when I see it.

Them achieving meaningful market share with windowsphone would shock a lot of us in the industry since microsoft's track record so far has been that they suck pretty badly at hardware rollouts.

If they keep trying at it - they will eventually go somewhere. Monkey with a gun - he can't shoot, oh he figured out the trigger but what about aim etc.
> they suck pretty badly at hardware rollouts.

The Xbox, and MS branded keyboards and mice are all highly successful and highly regarded.

Microsoft doesn't have to buy them.

They already have cross-licensing and will be able to use and probably sub-license Nokia's patent portfolio to every Windows and Windows Phone maker out there.

The genius here (on Microsoft's part) is that the two other players (Apple and the Android ecosystem) will have to do whatever it takes to prevent Nokia's portfolio ending up in the hands of an NPE.

When he took over, Elop stated that it is 'a battle of ecosystems'. Having spent significant time with Nokia devices (including Maemo/Meego), I completely agree with him. A few years back Android itself was second choice for most mobile developers, and it was almost impossible for Nokia to get them to write apps. Also, Android picked up because of Google; if Samsung made Android it would have gone the Bada way.

WP8 is the first OS that gives Nokia a fighting chance against iOS/Android devices.

- I have only seen positive reviews of this OS.

- It is do or die for MS as well, expect massive ad spend this season.

- Shared kernel with Windows. Attractive to millions of Windows developers. (Windows isn't cool anymore; but there are way, way more developers on Windows than any other platform.)

- If resource constrained WP7 is anything to go by, WP8 will be smoother than any android phone in the market.

This is Elop's first, last and only chance. I'd rather give the man a fair chance.

Edit: formatting.

> Windows isn't cool anymore;

windows has never been cool; ubiquitous is the word you're probably thinking of.

In the 90's, having a Windows gaming machine was cool.
Especially considering consoles didn't have multiplayer beyond the living room. Having access to B.NET, Kali, MPlayer, and other gaming networks of the day was very cool.
I still think my dual boot Windows/Linux machine is cool, but I seem to be in a minority around here. Haters gonna hate.
Between 95 and XP there was a period of "What's next?" similar to Apple in the 2007-2012 time frame and Google in the 2002-2007 time frame. What made them cool was the ability to change the way we work and play.
I haven't praised Windows for a long time but even I have to admit Windows for Workgroups made small office networks useful, that Windows on 386 was a nice (not OS/2 nice, but nice still) way to multitask MS-DOS programs and that Windows NT was a very decent desktop OS if you had the hardware it required. My first multi-processor computer ran Windows and, at the time, I wouldn't be able to install Linux on it. Solaris would be an option, but it was expensive, difficult to install and required careful selection of compatible hardware.

Of course, other OSs have surpassed it and Windows now looks like an evolutionary dead-end, crushed by layers of legacy compatibility and unable to evolve in significant new directions.

"If resource constrained WP7 is anything to go by, WP8 will be smoother than any android phone in the market."

What do you mean resource constrained? If anything, I think WP7 should be a leaner OS than WP8 which shares the core of the desktop Windows. Also so far I've only seen WP8 phones use Qualcomm's last-gen architecture, Krait, so of course it's supposed to be fast. As for smoothness, I think a lot of people are getting impressed by the animations. Like "look how cool the animation is...so nice", and they think that's what "smoothness" is. I remember when WP7 had terribly long transition animations, but WP7.5 cut down on those.

I think what jeswin meant was that WP7 phones are all pretty low spec, but still look buttery smooth.

> I think a lot of people are getting impressed by the animations... and they think that's what "smoothness" is.

That IS what smoothness is to the end user. A frozen screen for 0.5 seconds feels much less smooth than a well done 0.7 second animation.

I think the burning platform analogy he provided was perfect. Nokia has now jumped from the platform and are floating in the ice cold North Sea water with a life jacket on, and the big question is whether the rescue boats will make it there in time.
Maemo was indeed a tiny ecosystem, but I still believe they would've had a chance with the Qt strategy of providing a single development environment for their smartphones, Symbian, MeeGo, and even Android. Even just for the tiny Maemo 5 ecosystem we've served more than 120 million app downloads: http://maemo.org/downloads/Maemo5/ (this is just for the open source apps in Downloads. I have no idea of the numbers Ovi Store had)

Developing MeeGo took a lot of time and money, but the results were quite good. Same that management had lost faith by then. http://www.domusweb.it/en/design/portable-cathedrals

There are way too few apps for WP7, which means they (either MS or Nokia) seriously need to step up their game in attracting developers. My brother loves his Lumia 900 except for the fact that there are no games for it. If he didn't have an iPad for gaming, he would have switched phones by now because of the tiny "ecosystem".
"Nokia still sells almost a million phones a day"

"Greenwich's Rehle said Nokia should focus on rolling out smartphones running on Google's Android software for millions of consumers in emerging markets who often still prefer Nokia's brand. Android models cost under $100 while the cheapest Windows Phone costs around $200"

OK, so they're selling a million phones a day and not making a significant profit. The reason is that too few of the phones are high margin smartphones.

And from this the conclusion is that they should switch to Android and sell commodity smartphones? This doesn't sound like analysis. It sounds like Microsoft bashing.

A lot of the million phones a day that they sell are featurephones with Nokia's own OSs. With Android they might be able to push margins slightly up there, and with the volumes they have that could be a big thing.
> the conclusion is that they should switch to Android and sell commodity smartphones?

They already sell commodity phones. In these markets people don't pick Nokia because of brand or features - they pick it because they need voice and text calls and Nokia's phones seem to be a slightly better value proposition (rugged, long battery life) than other low-end units.

Once other manufacturers manage to bring Android 2.x into the S40 price range (something Nokia certainly won't be able to accomplish with WP8), you'll see quick erosion of Nokia's share because other sets will have a much better value proposition.

I think Nokia seriously underestimated the "Instagram/Zynga" factor when they decided to go with Windows Phone. The average consumer does a minimal amount of research before buying a phone, and typically buy whatever the sales representative recommends (unless they are looking for a specific model, like the iPhone or SGS3). But on top of that, consumers will still ask questions like:

1. Oh my friend uses this app called "Instagram", does Windows Phone have "Instagram"?

2. I want to play "Words with Friends" with my friends, can I do that on Windows Phone?

If the sales representative is honest (I mean he has to be or will get an instant return), the consumer is just going to pick up an equally cheap or cheaper Android phone.

The 920 does not solve this problem despite having pretty sweet hardware. Not only that, its a huge phone like the SGS3, but quite heavy, which will turn off a lot of consumers who want big screens, but light devices (you don't see Apple making bigger phones that are heavier). Even if the camera is the best on the market (and to be honest, I don't think it will be noticeably better than the iPhone5 and upcoming Android phones), without useful apps for sharing those photos, people won't be drawn to the platform.

Finally, things like wireless charging and using the phone with gloves on are not major selling points, just like NFC has never been a major selling point.

Rumors say they're paying the makers of various "must have" apps to get them on their platforms. This probably explains why my old Symbian phone has Twitter, Foursquare, and Facebook.

Since the companies making those applications are not really interested in these platforms the apps usually are halfhearted at best.

The sales representative isn't always honest, but he _will_ try to push whatever model the carrier is interested in pushing. Right now, carriers are interested in pushing Android since that ecosystem is aligned with the carriers interests (easily customizable).

Carriers are generally not interested in Windows Mobile and Nokia, and very few carriers are interested in pushing the iPhone even though they have to carry it due to customer demand.

> the conclusion is that they should switch to Android and sell commodity smartphones?

I had my phone upgraded a couple months back and I certainly saw a lot of pushing for Lumia phones. Even when I asked specifically for an Android phone, the salesperson wanted me to consider a Lumia. After some friendly interrogation, she admitted the commission for selling a Lumia was about twice as much as the commission she would get for selling my the Android device, and part of it would be paid directly by Nokia through some incentive program.

Microsoft is spending a ton of money on it and a lot is channelled directly through Nokia.

That's right, I forgot that they had a push for the Lumia a while back, and maybe it's still ongoing. But even so, the sales have been low.
> using the phone with gloves on

This could be huge feature in colder climates. I can see Koreans and northern Eurpeans going nuts for this.

> NFC

Too early to tell, because phones have only just started using it.

> wireless charging

I can see this becoming really important in the future. A sound docks that wirelessly charges your phone while wirelessly receiving the music - and works with any WP8 or Android phone - could be a huge seller.