eWEEK
Microsoft, Nokia Alliance Doesn’t Mean End of Windows Mobile
By Nicholas Kolakowski
August 13, 2009
http://www.eweek.com/c/a/Windows/Microsoft-Nokia-Alliance-Doesnt-Mean-End-of-Windows-Mobile-347508/
Microsoft and Nokia formed a partnership to load a mobile version of Microsoft Office onto Nokia smartphones, the better to compete against RIM’s BlackBerry, and analysts immediately began discussing how the alliance would weaken Microsoft Windows Mobile. However, Microsoft had shown signs that it fully intends to keep backing Windows Mobile, even if the operating system has a small share of the smartphone market.
Immediately after Microsoft and Nokia announced a partnership to load a mobile version of Microsoft Office onto Nokia smartphones, debates erupted online as to what the alliance would mean for Microsoft Windows Mobile, Redmond’s own mobile operating system.
Under the terms of the agreement, the mobile Microsoft Office applications will come pre-loaded onto Nokia Eseries smartphones, allowing out-of-the-box functionality for the business-centric devices. Nokia and Microsoft would later port the application platform onto other smartphones.
That porting of Office functionality onto a competing mobile operating system has drawn certain analysts to the conclusion that, while the alliance will allow both Microsoft and Nokia to compete more heartily against RIM, it leaves Windows Mobile somewhat isolated.
Even before the announcement, it seemed as if Microsoft was designing the upcoming version of its mobile operating system, Windows Mobile 6.5, with the intention of making an aggressive unilateral push against the Apple iPhone, Palm Pre and other smartphones. Mobile 6.5’s new features include improved touch capabilities, allowing the user to navigate through tapping and other gestures, as well as customizable widgets.
But certain analysts now see Microsoft as retreating a bit from its original intention of going it alone in the mobile arena, particularly with regard to the enterprise.
“I see [the agreement] as a tacit admission from Microsoft that WinMo [Windows Mobile] hasn’t made the grade,” Nick Jones, an analyst with Gartner, wrote in a blog posting following the joint announcement. “Imagine you’re Steve Ballmer, and in two years’ time WinMo was still fourth in smartphone market share. How much longer do you keep throwing money at it?”
In an interview with company spokespeople following the announcement, neither Microsoft nor Nokia would comment on any structuring within the deal that would allow the mobile Office side to proceed without being affected by competition on the OS side of the equation. With both Nokia and Microsoft feeling pressure from Apple and RIM in the marketplace, however, the alliance may take priority over other concerns.
An August report from research firm Gartner found that, while industry-wide smartphone sales had increased by 27 percent during the second quarter of 2009, Nokia experienced decidedly softer-than-expected results for its newly launched N97 smartphone. Nokia and Microsoft both saw their shares of the smartphone OS market decline, to 51 percent and 9 percent, respectively.
Click here for more information on the Nokia N97 smartphone
Tiny market-share for Windows Mobile aside, a number of analysts see Microsoft sticking behind the system.
“I don’t think the news necessarily hurts OEMs who have historically produced [Windows Mobile] devices, except that they can now expect stronger competition from Nokia,” Chris Schreck, an analyst with IMS Research, said in an email to eWeek. “The tight integration with Microsoft products is especially important as Nokia eyes the North American smartphone market, where Windows Mobile is strongest.”
Nor does Schreck think that a mobile version of Office will necessarily hurt Microsoft Mobile’s market-share, at least initially.
“I don’t necessarily expect any OEMs [original equipment manufacturers] to drop Windows Mobile tomorrow just because of this announcement,” Schreck said. “There is a huge investment in supporting a platform, whether open source or not, so those decisions tend to happen slowly.”
“However,” Schreck added, “if an OEM was wondering what platforms to support five years from now, the argument for continuing to pay royalties to license Windows Mobile just got a little bit weaker.”
Other analysts see the deal as potentially successful only if Nokia and Microsoft can overcome substantial challenges to preserving or gaining market-share.
“It may ultimately blunt some of the market advantage that BlackBerry has in the enterprise, and may also thwart some of the up and comers,” Jack Gold, an analyst with J. Gold Associates, said in an August 12 research note. “However, it will be incumbent on both Microsoft and Nokia to implement a sound extension to these primary steps if this partnership is to fulfill its full potential.”
“Microsoft will need to establish itself as an interconnectivity and management technology leader across all platforms to be successful,” Gold added.
Perhaps the surest sign that Microsoft intends to continue backing Windows Mobile, at least in the short-to-medium term, is the launch of the Windows Marketplace for Mobile this fall. Earlier this summer, Microsoft announced that it was opening to developer submissions, and would include a dedicated Business section for enterprise applications. The evident hope is that Windows Mobile will have a large enough portfolio of applications at launch to challenge Palm’s App Catalogue – although the goal of catching up to Apple’s App Store, which has over 65,000 applications, may prove impossible in the short term.
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