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Print 21 comment(s) - last by ResStellarum.. on Feb 21 at 9:43 AM

New phone will be priced in the $50-$150 range, feature budget spec

Nokia Oyj. (HEX:NOK1V) made a credible attempt at promoting Windows Phone in the global market.  After kicking things off with the Windows Phone 7.5 "Mango" Nokia Lumia 710 and 800 devices in Oct. 2011, the first full-fledged sales test of the Windows Phone line on the global market ensued in 2012, with Nokia moving an underwhelming 13 million units. 
 
I. Normandy Cometh?
 
But last year Nokia showed that Windows Phone was down, but not out.  In total it sold 30 million units for the year, earning Windows Phone the distinction of being the mobile industry's fastest growing platform.
 
A key to the success was the rise of budget Windows Phones.  Priced below $200 USD, the Lumia 520 and 521 rose up to capture roughly a third of Windows Phone's market share by the end of 2013, according to advertising metrics.
 
But if you factor in developing markets, the Lumia is still on the low-end of mid-range.  Nokia needed a truly budget Windows Phone device, but the question was how to squeeze Windows Phone onto a handset that cost as little as $80 USD.

Nokia QWERTY teaser

Here's a trick question: how do you sell a Windows Phone for $80 USD? The answer is you don't sell a Windows Phone.  Nokia planned a secret fork of Android that was heavily modified to bear semblances of Modern UI's (Metro) Live Tiles.  Google Inc.'s (GOOG) core services -- Gmail, Google Maps, and the Google Play store -- would be stripped out of Android, preventing Google from receiving a cut of the profit.
 
So having replaced Symbian with Windows Phone, Nokia now had a replacement for the aging Symbian-based S40 operating system that populated Nokia's current Asha budget lineup.  It would use a reskinned, forked Android build that would appear like Windows Phone.  That build was dubbed Normandy.



Then Microsoft Corp. (MSFT) announced it was purchasing Nokia's devices unit.
 
Nokia had kept a tight lid on Normandy.  Aside from the perpetual rumors dating back to 2012 and earlier that it might be toying with an Android release, there were no concrete leaks until after Nokia announced in September 2013 a $7.2B USD sale of Nokia's devices unit to Microsoft.
 
Thus when we first heard about Normandy, the question was whether it was a dead end.  Most believed that it was.  After all, Microsoft wouldn't release an Android smartphone, would it?

II. Normandy Gets the Greenlight and What We Know

But the doubters appear to be wrong.

Word has it that new Microsoft CEO Satya Nadella has approved of the Android device.  Thus when Microsoft completes its acquisition of Nokia Devices sometime before the end of March, it will likely look to replace S40 Ashas with Normandy devices.

Before we get to what we know about the device in terms of recent specs and launch date leaks, let's look at what we know about Normandy and the Nokia Devices sale in general.

So what do we know for sure?
  1. Nokia is transfering nearly its entire devices business, including both smartphone and feature phone design, marketing, and manufacturing teams to Microsoft.  In total the deal will comprise 32,000+ employees, most of whom are global employees outside of Finland.  This sale is permanent, not a rental, as some misread.

    Source: From Nokia's press release:

    Microsoft will acquire substantially all of Nokia's Devices & Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services production facilities, Devices & Services-related sales and marketing activities, and related support functions. At closing, approximately 32,000 people are expected to transfer to Microsoft, including approximately 4,700 people in Finland.

    Nokia phone
    Microsoft is buying Nokia's devices, units, including the feature phones unit, while "renting" the brand, so to speak.

     
  2. Microsoft gets a patent license (likely at no additional cost), but most critically it can extend that license forever by pledging crosslicensing.

    From the press release:

    As part of the transaction, Nokia will grant Microsoft a 10 year non-exclusive license to its patents as of the time of the closing, and Microsoft will grant Nokia reciprocal rights related to HERE services. In addition, Nokia will grant Microsoft an option to extend this mutual patent agreement to perpetuity.

     
  3. Microsoft will pay fees to get Nokia's HERE locations service.

    From the press release:

    Additionally, Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four year license. This revenue stream is expected to substantially replace the revenue stream HERE is currently receiving from Nokia's Devices & Services business internally. If the transaction closes Microsoft is expected to become one of the top three customers of HERE.

    Nokia Here
    Nokia's HERE locations service, spotted in renders of Normandy.


     
  4. Microsoft gets to continue to brand its new smartphones and feature phones as "Nokia" devices.

    From the press release:

    Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current Mobile Phones products. Nokia will continue to own and maintain the Nokia brand.

     
  5. The Symbian Based Series 30 (S30) and Series 40 (S40) which Normandy may swap out, are licensed to Microsoft, if it wants them.

    From the press release:

    Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current Mobile Phones products. Nokia will continue to own and maintain the Nokia brand.

     
  6. Microsoft also gets a license to use the Asha and Lumia brand names.

    Source -- Nokia Marketing director Tuula Rytilä via WPCentral:

    For the most part, Nokia illuminates questions on branding transition, including the relevant “Nokia Lumia” name. The Microsoft-Nokia deal transfers the name “Nokia” over for mobile phone use to Microsoft for ten years, along with the ‘Lumia’ and ‘Asha’ brands, which will be owned by Microsoft.

     
  7. Nokia can't license its brand to anyone else until 30 months after the deal closes (likely this restriction will last until Sept. 2016, assuming a close next month) and it can't build Nokia-branded devices through the end of 2015.

    From the press release:

    Upon the closing of the transaction, Nokia would be restricted from licensing the Nokia brand for use in connection with mobile device sales for 30 months and from using the Nokia brand on Nokia's own mobile devices until December 31, 2015.

III. What We Can Make Educated Guesses At
  1. Will Normandy release?

    Best guess:
    Almost certainly, yes.

    Aside from the torrent of leaks from reliable sources in recent weeks, the upcoming launch has also been confirmed by large financial news services, including The Wall Street Journal who confirmed the pending launch on Feb. 10.



     
  2. Does Microsoft become the owner of additional apps/core services, such as the Ovi store?

    Best guess:

    Based on the wording of the press release it would seem that Nokia retains rights to this.

     
  3. Does Microsoft have a license to use the Ovi and other core services/apps?

    Best guess:
    Given that upcoming devices in leaks have been seen with these items, the best guess is "yes".

     
  4. What are Microsoft and Nokia's roles in ongoing devices?

    Best guess:
    The Microsoft-Nokia relationship will likely be somewhat like the relationship between Samsung Electronics Comp., Ltd.'s (KRX:005935) (KRX:005930) and Google, albeit a bit different.

    Microsoft plays the role of Samsung, developing the hardware and pocketing the direct cuts from device sales margins.  Like Google, Nokia splits the role of software and services development with its partner, licensing certain key apps.  In this regard even if Microsoft wholly owns Nokia Devices units, Nokia will likely continue to profit off most of the Lumia and Asha devices Microsoft sells.  On the high-to-mid end (Lumia) Microsoft is expected to use less Nokia software (notably, it controls the app store on Windows Phone), but on the low end (Asha) Nokia appears to be providing much of the software (including the Ovi app store).

    The relationship is a bit different as, of course Microsoft is also developing the core operating system, but it's a rather nice analogy given that most of Google's time is consumed by perfecting the services for its partners, and partners like Samsung take an active role in OS development with their own UIs, kernel tweaks, and proprietary APIs.

III. What No One Knows*

*=Some at Microsoft and Nokia surely know these things, hence the disclaimer.  But as for the press, we're in the dark on these points.
  1. Who will be tasked with maintaining the branch of Android (more on that shortly) -- Microsoft, Nokia, or some combination of both?

    Speculative guess:
    There's no information that can really answer this question.  Nokia appears to be retaining ownership of certain apps and committing to putting them on Asha/Normandy.  This would seem to imply it might help with maintaining the Android branch as well.  Or it might not.

     
  2. Wait, is Nokia going to turn around and using all its money from licensing (or "trolling", according to some), and simply relaunch its phone brand?

    Speculative guess:
    No one knows.

    But the agreement that was made public seems to imply that at the end of 2015 Nokia can start selling phones again.  At that point it could in theory adopt a number of market strategies.  One potential plan would be to position itself as king troll of the Android market.  Rival OEMs would be stuck paying three license fees -- one to Nokia, one to Microsoft, and one to Apple, Inc. (AAPL).  All other things equally, that would mean that basically there would be no way that they could compete with Nokia on price and profitability.

    Samsung Galaxy S4 wide

    Both Samsung (Galaxy S4, left) and Apple (iPhone 5S, right) are saddled
    with licensing fees to Nokia.


    It's unclear whether Nokia will go that route, but it's a serious possibility, given how much smartphone-related property it retains.  And remember there's nothing to stop former Nokia engineers -- now at Microsoft -- from leaving in a few year and going back to Nokia.  Cue evil laughter.

Now that we've cleared that stuff up, let's look at what we know about Normandy's spec and launch date.
 
II. Normandy Gets the Greenlight
 
So what will this Microsoft-Nokia Android look like?  Thanks to numerous leaks from EVLeaks, ViziLeaks, and others, there's a lot we know about the device and where it fits into Nokia's lineup.
 
EVLeaks has published a leaked spec for the first Normandy device, the Nokia X:
  • 4-inch display
  • Qualcomm Inc. (QCOM) Snapdragon S4 CPU
    • 1 GHz.
    • Dual core
  • 512MB of DRAM
  • 4GB of NAND flash + microSD
  • 5 megapixel camera
  • 1500 mAh battery
  • Dual-SIM
  • 6 colors


Tuula Rytilä, Nokia's marketing chief will reportedly reveal the Nokia X at a press event at the 2014 Mobile World Congress (MWC) in Barcelona, Spain on Feb. 24.  The device maker sent out event invites with green color and a subtle 'X' in the middle of four black arrows.  A leak from EVLeaks shows an artist's render of the device, with similar green and black themes.

From EVLeaks on Twitter:


From Nokia:

Nokia X

Leaked screenshots show us that Nokia X runs an odd mix of Microsoft, Nokia, and Google apps.  The phone app and messaging appear to be stock Android.  But there's Skype and BlackBerry Ltd.'s (TSE:BB) BlackBerry Messenger (BBM) onboard. 



Nokia's camera app can be recognized by its icon; likewise Nokia's HERE Mapping service makes an appearance.  There's obligatory Facebook, Inc. (FB) and Vine apps, as well.

III. Google Bites Back
 
Where things start to get interesting is with the browser, app store, and Office.
 
In theory Microsoft could practice a strategy similar to Amazon.com, Inc.'s (AMZN) Kindle Fire OS (an Android fork), encouraging developers to repackage their Android apps for the third-party fork.
 
That approach may be difficult.  Google formally continues to pledge to support open source via the Android Open Source Project.  But to prevent the fruits of its labor from being leverage for others' profits (e.g. Amazon, Microsoft/Nokia, and various Chinese OEMs that have forked Android), Google has quietly been shuffling its core apps and APIs off of Android.
 
Android closing APIs
Android is closing off its APIs, to beat back forking. [Image Source: The Naked Android]

This leads to a tough to answer question: looking ahead will most developers be able to submit unmodified apps to Normandy OS or Amazon's Fire OS?  As of Android 4.4 Kit Kat, the answer is increasingly looking like "no".  For example, if you have a game, you will need to remove calls to Games APIs, Location APIs and other APIs that are now considered part of "Google Services", a proprietary offering that is not open source.
 
In other words, Google's idea of "free" when it comes to Android is sort of like offering a "free" car that you've stripped the paneling, hubcabs, doors, stereo, windows, and air conditioning out of.
 
Among the other features Google cut from the Open Source version of Android is the Chrome WebKit browser.
 
The screenshots leaked thus far have just shown a ubiquitous "internet" icon.  So whose browser is this?  Nokia has done some work in Linux with its Maemo project and indeed the browser appears to be Maemo derived.  The icon is almost identical with the same styling and the same view angle of the Earth (compared to other similar icons e.g. Samsung's browser).
 
Nokia Normandy apps
The browser and app store icons on Normandy hint that these are Nokia apps.

Microsoft may look to stick to this approach.  Normandy X has a Linux kernel and Microsoft currently has no Linux-compatible version of Internet Explorer (IE).  Microsoft might be 50 percent towards such a theoretical browser build given that it has added ARM processor support to IE (Windows Phone, Windows RT), but it would have to rewrite the low level calls to work with Linux networking APIs, versus the ported versions of its familiar Windows libraries found on Windows RT and Windows Phone.
 
On the other hand we can expect to see Office 365 appear in app form on the device, given that Microsoft has already offered up Android and iOS Office 365 apps.

Office for Android  
iPhone Office Mobile
The device will likely get a dedicate Office 365 client, joining Android and iOS.

Nokia appears to be offering up the store app -- which is good news for Nokia as it will control at least a portion of the ongoing mobile revenue, that means.  EVLeaks reports that the app above, is a Nokia store app.  EVLeaks says that third party storefronts will also be available.

In a sense it seems Microsoft is content with Nokia's strategy -- rebrand a fork of Android in such a way that 90+ percent of users will mistake it for some version of mobile Windows.  The approach could backfire as users may be upset if their favorite Windows Phone apps are absent from the new budget platform.  But overall the approach also has some advantages.
 
First, for all its cuts Google still is investing its time in fulfilling one crucial open source part of Android -- supporting a variety of low end devices with basic phone-calling, networking, and graphics (e.g. OpenGL).  Of course much of that work is actually done by the greater Linux community, but the take-home messages is that by developing on an Android fork, Microsoft washes its hands of the responsibility of writing the lower level firmware and APIs.
 
Second, the aforementioned software is free.  Meanwhile Microsoft and Nokia each get a cut of nearly every single Android device sold.  By that logic it's simple to reason that either Microsoft's Android device will have superior profit margins or that it will be priced lower and hence sell better than similar budget offerings from rivals like South Korea's Samsung.
 
IV. Market Hopes
 
Will this set of "Windows Phone training wheels" be a boon or a bust?


 
The good news is that Asha devices are about to get a shiny new coat of paint, which could help them to stay relevant versus competitors like Samsung.  As they say -- when in Rome, do as the Romans do.  Microsoft will have to adjust to selling to the budget market; as this market segment is dominated by Linux-based product, it makes sense to back a Linux-based offering.
 
Training wheels
Normandy appears to be intended as "training wheels" of sorts for the Windows Phone platform. [Image Source: Slate]

The bad news is that in abandon Series 40 (S40), Microsoft and Nokia are throwing out a catalog of 100,000+ S40 "content items", e.g. apps and themes [source].  The Series 40 has been around since 1999 and has over a billion active devices in the wild, so it's not too hard to lure developers to the low-end platform.  By contrast, Normandy has no users at present, so is a far tougher sell.  It will likely have less than 1,000 apps at launch, barring some sort of concerted porting scheme.

Nokia Asha
S40 (Asha 200 pictured) has a vast apps advantage over the Android fork. [Image Source: Nokia]

 
A lot of that depends on what kind of app support Microsoft and Nokia can hustle up and the price point these devices launch at.  Somewhere around $125 would be a decent price point, but if Microsoft can manage to price these devices below $100 it would likely be a major hit in developing markets.  With the Surface and Windows Phone efforts Microsoft has struggled on both of these crucial fronts, so we'll have to wait and see how it executes.

Sources: EVLeaks, Nokia, The Verge



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

What Idiot Would Buy This?
By Reclaimer77 on 2/19/14, Rating: 0
RE: What Idiot Would Buy This?
By retrospooty on 2/19/2014 6:30:12 PM , Rating: 1
Mitch?


RE: What Idiot Would Buy This?
By atechfan on 2/19/2014 6:55:47 PM , Rating: 2
I'm still not convinced that they are really releasing this device. I was sure the Normandy plans were just a stick Nokia used to get MS to agree to buy their device division. I can't see any benefit to MS following through with it. Put me in the "I'll believe it when I see it" camp.


By YearOfTheDingo on 2/19/2014 10:09:59 PM , Rating: 2
Sounds to me like Nokia is just want to host the Asha platform on a more modern Linux kernel. Given the optimization work has already been done on Android, they might as well use it.


RE: What Idiot Would Buy This?
By superPC on 2/19/2014 11:53:34 PM , Rating: 4
And take a look at these specs:

quote:
4-inch display
Qualcomm Inc. (QCOM) Snapdragon S4 CPU
1 GHz.
Dual core
512MB of DRAM
4GB of NAND flash + microSD
5 megapixel camera
1500 mAh battery
Dual-SIM


Windows phone 8 would run well in a phone with specs like that. So why use Normandy in such phone?


RE: What Idiot Would Buy This?
By Mint on 2/20/2014 5:07:08 AM , Rating: 2
Yeah, I don't get it either. Maybe the Android brand?


RE: What Idiot Would Buy This?
By themaster08 on 2/20/2014 9:37:37 AM , Rating: 2
quote:
Android without Google Apps and barren app store?
Android with the Nokia Apps and an app store which will take zero effort for current Android application developers to publish on.

Amazon have managed to pull it off with their own ecosystem and OS based on the AOSP, so why can't Nokia?


RE: What Idiot Would Buy This?
By Bateluer on 2/20/2014 10:35:55 AM , Rating: 2
"Amazon have managed to pull it off with their own ecosystem and OS based on the AOSP, so why can't Nokia?"

Amazon has something that Nokia doesn't, a successful money making business. They can absorb any losses and plan for long term. Nokia cannot.

Normandy sounds like a joke. With those specs, there's better real Android phones that have full access to the Play Store. With Normandy, you get an underspec'd Android phone with everything that makes Android awesome stripped out. Its a Lumia 52x in a different body, thats not going to cut it any more on the low end.


RE: What Idiot Would Buy This?
By ResStellarum on 2/21/2014 9:43:38 AM , Rating: 2
quote:
Android with the Nokia Apps

Nokia will have to rewrite all its apps for Android.

quote:
and an app store which will take zero effort for current Android application developers to publish on.

That's pure fiction. Without GMS, most popular apps won't be compatible, including Google's. Amazon has had the same trouble despite replicating parts of GMS.

Nokia can't even convince developers to target WP, so they're got no chance of getting support for a forked AOSP. The store will be a ghost town.

quote:
One potential plan would be to position itself as king troll of the Android market.

Yeah that's not going to happen. The EU are keeping a close eye on Nokia's patent trolling efforts.

quote:

Rival OEMs would be stuck paying three license fees -- one to Nokia, one to Microsoft, and one to Apple, Inc. (AAPL). All other things equally, that would mean that basically there would be no way that they could compete with Nokia on price and profitability.

And Nokia will never get GMS approval if it patent trolls Android OEM's, meaning they'll have to build another forked version if they want to use Android. Good luck with that ;)


RE: What Idiot Would Buy This?
By drycrust3 on 2/20/2014 4:13:09 PM , Rating: 2
quote:
Android without Google Apps and barren app store?

Exactly! That is the whole point of application libraries: either they lock you into that operating system, or they limit your next smartphone operating system to one which has a larger application library than what your current OS has. So the neutered Android OS users' next purchase will be limited to one of Windows Phone OS, full blown Android, or Apple. Since Microsoft would want a Nokia user's next purchase to be a Windows Phone OS phone, why would you even let them think there was a whole new world of apps just down the road? Wouldn't it be better to spend the money encouraging developers for your own application library?
While it is arguable that "cost" is a consideration, the cost of Windows Phone OS is entirely Microsoft's own licencing price structure, and they could easily create a price structure for Nokia that is cheaper than what it would take Nokia to create what a neutered Android.
I don't know if Microsoft can sell a phone with a modified Android on it because, as someone else pointed out, Android is released under the Apache licencing regime, not under GPL 2, but even if they can, why would they? They have their own operating system that, by all accounts, works well enough.
Microsoft isn't a member of the Open Handset Alliance, and there would be little point in Microsoft wanting to use Android unless it was also in the Open Handset Alliance which is exists to establish standards for Android, but if they were then they wouldn't be allowed to create their own fork of Android.
The only valid reasons I can see that would make Microsoft want to use Android are either their own OS isn't working (but it does work), or they have some legal issue with some global power to deal with, e.g. China wants a Microsoft phone with Android (but then why not Apple?) or EU regulations demand a Microsoft phone with the option of a purchaser deciding what operating system they use when they buy a new phone (but then why Microsoft and not Apple, Blackberry, or Samsung?) or some such thing.
The only reason I can think of that this might actually get to market is in the context of a change in long term strategy by Microsoft. If there were some announcement by the new CEO to indicate this, then, yes, you might see Nokia phones with Android on them in the stores, otherwise I just can't see it happening.


RE: What Idiot Would Buy This?
By nafhan on 2/21/2014 9:37:46 AM , Rating: 2
1. Nokia is better positioned than just about anyone to make a Google-less Android phone.
2. A solid phone, with a few key apps, and an extremely low price sounds like exactly what their target demographic wants.

I can see this making sense for some people. Not the people who are thinking about getting an iPhone or S5, but the people who are wondering if they can get a smartphone at all. That said, this thing needs to be very inexpensive to even have a chance at viability.


By jnemesh on 2/19/2014 6:49:53 PM , Rating: 2
Apache 2.0 (which Android is licenced under) section 3:

3. Grant of Patent License. Subject to the terms and conditions of this License, each Contributor hereby grants to You a perpetual, worldwide, non-exclusive, no-charge, royalty-free, irrevocable (except as stated in this section) patent license to make, have made, use, offer to sell, sell, import, and otherwise transfer the Work, where such license applies only to those patent claims licensable by such Contributor that are necessarily infringed by their Contribution(s) alone or by combination of their Contribution(s) with the Work to which such Contribution(s) was submitted. If You institute patent litigation against any entity (including a cross-claim or counterclaim in a lawsuit) alleging that the Work or a Contribution incorporated within the Work constitutes direct or contributory patent infringement, then any patent licenses granted to You under this License for that Work shall terminate as of the date such litigation is filed.

In other words, MS can kiss that $2 Billion a year goodbye the second this gets released.




By juhatus on 2/20/2014 6:49:37 AM , Rating: 3
I bet MS has better lawyers than you are.


By Flunk on 2/20/2014 9:20:20 AM , Rating: 2
That's only patents related to the code contributed to the open-source project. Existing patents are a-ok.


Who does the research for these articles?
By MundoMateo on 2/20/2014 9:58:01 PM , Rating: 3
quote:
Here's a trick question: how do you sell a Windows Phone for $80 USD? The answer is you don't sell a Windows Phone.


LOLOLOLOL, does the author not realize that both the Nokia Lumia 520 and 521 are selling for and 60 and 70 dollars at this very moment? Go to the Microsoft Store right now and see.

I just purchased one a few days ago for a family member and it works great! A really amazing deal, way better than this probably mythical Nokia Android phone.




By Gunbuster on 2/21/2014 9:28:59 AM , Rating: 2
Indeed, they have even dipped to under $35 with a store price match.

The problem none of the OEM's want to talk about is who will be the first to go Lumia 520 on the high end phones. How do you go from a $35 phone to a $500 model. Are we to believe that stepping up to a "better" phone necessitates a 1000%+ price increase? They are taking massive profits on the "Good" phones and no one wants to be the first to go and ruin that party.


What Jason needs to do is...
By retrospooty on 2/19/2014 6:03:01 PM , Rating: 1
Add just a few more relevant pictures to his articles, because lately, there just aren't enough ;)




RE: What Jason needs to do is...
By bah12 on 2/20/2014 9:33:18 AM , Rating: 2
Tell me about it, and make it longer too. I mean seriously this article is insane considering its about a product no one gives a crap about. A hybrid windows/android device with none of the benefits of either, how does this appeal to anyone.


By retrospooty on 2/20/2014 11:21:01 AM , Rating: 1
Yes, and highly important, the green background pic above with 4 black arrows pointing at each other. That really "makes" the article. ;)


Tell me again why Nokia needs this?
By superPC on 2/19/2014 9:01:39 PM , Rating: 2
Android phones that has the same level of hardware to the minimum requirement of windows phone 8 are sold for less than 100$ ( http://www.gsmarena.com/samsung_galaxy_star_s5280-... is one of the examples). So with Nokia firmly under MS now, why not just launched something like that with windows phone 8? Price it at 99$ unsubsidized and replace the upper and middle end of Asha line.




By Gungel on 2/21/2014 7:25:01 AM , Rating: 2
They already sell a WP8 phone for $40 off contract, the Lumia 520/521. Which is also the best selling windows phone on the market today.


"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer














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