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The WP7 marketplace ramp-up compared to the iPhone app store (red line).  (Source: WP7Applist.com)
Nokia and Microsoft have had discussions about possible WP7-based Nokia device

In his weekly op-ed, mobile godhead Eldar Murtazin announced that Nokia has been in talks with Microsoft to possibly develop a device based on the Windows Phone 7 operating system.

"This two way dialogue was initiated by new Nokia management," Murtazin writes. "It's a desperate measure for both companies. This is their only solution to stop an all conquering Android."

Nokia's tribulations have been well-documented here on DT [1] [2] [3]. And while Nokia has not commented on the alleged discussions with Microsoft, it seems particularly plausible considering Nokia's new CEO is a former Microsoft exec.

A Windows Phone-based device must sound even more enticing to Nokia, amid reports that the Windows Phone marketplace is ramping up faster than Android did after first launching, and is holding its own against even the Apple store.

"The Windows Phone 7 Marketplace reaching 4,000 apps two months after launch has to be one of the most rapid ramp-ups in recent times, reaching this milestone faster than Android, which took from October 2008 to March 2009 to reach about the same level," Al Hilwa, an analyst with research firm IDC, wrote in a research note.

"We can say that for a company that just a few months ago was an also-ran in mobile, having 10 smartphones released in 30 countries is not a trivial achievement," Hilwa wrote. "I would not be surprised if Microsoft had the third largest app portfolio in the industry by the middle of next year."

With so many reviews and news reports writing off Windows Phone because of a lack of apps, the analysis is encouraging for Microsoft. And even if sales U.S. sales figures can't match that of the iPhone, international reports say WP7 is selling well in Europe and Asia, according to EWeek. But Microsoft is also in a position that allows itself to lose money on a product initially, if adoption is slow. 

"No one expected WP7 to take the market by a storm, but the role of the first release was to [put] Microsoft in the game. To be clear this is a long term battle that will be pivotal for Microsoft’s long-term relevance," Hilwa wrote.


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RE: Classic MS strategy
By HighWing on 12/21/2010 1:51:56 PM , Rating: 2
Tony, I'll give you credit for what you've posted makes sense, and you seem to know a bit about what your talking about... But in everything you posted, you danced around one topic that seems to have slipped through your facts. While it is true that their office/os monopoly is slipping, and they will never have a monopoly in the console, or mobile phone market, the point is they don't need to!! There is this thing called diversification , and that is what MS is doing here!

They know full well that office can't bankroll the company for ever. And while dumping billions to make millions might not make sense in the short term, if you scale it out to long term, it makes perfect sense. They don't need to be the monopoly in the console of mobile phone market, they just need to be established and be making money in that market. And I'll bet you money that is their plan. Would they like to be a monopoly... sure, what company doesn't? But they don't need to be the monopoly to profit.

In fact their business model here is already showing. You got a Movie you buy on your computer, you then stream it to your TV via XBox, later you are on the road and you finish watching it on your phone. (Reread and replace Movie with Game, Music, etc) Granted they aren't the first to the market to do this, the point is they don't need to be the first. People are already familiar with how to use windows and it's GUI. You couple that with several devices that easily extend that familiar functionality and easily connect and share data with each other... (can we say cloud) and you've got a multi-billion dollar business model that is poised to be very successful.

But the whole story here is that even if they don't get a consumer to buy all their devices that connect together, they still have diversified their business model so their money is coming in from multiple sources, rather than just the Office cow. While they may not be making billions, they are still making millions, and those millions will just keep adding up as the years go on.


RE: Classic MS strategy
By Tony Swash on 12/21/2010 2:55:32 PM , Rating: 2
quote:
Tony, I'll give you credit for what you've posted makes sense, and you seem to know a bit about what your talking about... But in everything you posted, you danced around one topic that seems to have slipped through your facts. While it is true that their office/os monopoly is slipping, and they will never have a monopoly in the console, or mobile phone market, the point is they don't need to!! There is this thing called diversification , and that is what MS is doing here!


It's clear that Microsoft has tried very hard to diversify for over fifteen years. Initially I think they thought it would be fairly easy to use their Windows/Office monopoly to leverage new and lucrative business lines. In fact it turned out to be very, very much harder than they had anticipated. None - and I do mean none - of Microsoft's attempts at diversifying have made much money. Many have lost a lot of money.

Microsoft is used to living with the huge monopoly revenues from Windows/Office and this means they can throw money around and at one project after another. But throwing money around will not guarantee a success in the new world of mobile and consumer devices and services (ask Sony). Currently their consumer division loses money. The Xbox is a crappy business, not a crappy product, I have never used one so I have no idea how good Xbox is or isn't, but it's a crappy business. Razor thin margins even when it's does actually make money.

Take away Windows/Office and the company would go under.

So can Microsoft find a new, large and profitable business to replace its ageing core products? It's a hard environment for them to do so. They face one competitor in Google which can offer essentially free alternatives to Microsoft's offerings. With free Android in play in exactly the same market as Microsoft's WP7 how much can Microsoft actually charge for WP7?

And then there is Apple which can seemingly outflank Microsoft in one market after another. Why?

Personally I think that Microsoft probably needs a near death experience to really retool the company. Microsoft has never had a near death experience but Steve Jobs has had a near death experience three times (and I am not talking about his cancer). First was when Next, his venture after being ejected from Apple, nearly failed and had to be drastically reshaped as a software company after the failure of it's hardware business. Second was Pixar which almost didn't make it, Jobs had nearly run out of money keeping it going until the success of Toy Story saved it. Third was of course Apple where although Jobs was not involved during its years of decline he sure as hell was paying close attention. And when he came back he found that near death had transformed the companies internal and corporate culture so it was ripe and ready to be remade. That's what nearly dying does.

I think the sooner that Microsoft starts to feel the pinch in its core Windows/Office business the better it will be for the company long term. Until the old cash cow falters it will keep on running itself in the same tired old way. Personally long term I think Microsoft should not try to be a consumer business. It should concentrate on its enterprise products. If it takes that route it may end being a smaller and perhaps less profitable company but it could be secure long term strategy and it wouldn't flounder around so much in such an embarrassing way in public.


RE: Classic MS strategy
By kaosstar on 12/21/2010 3:12:11 PM , Rating: 3
Microsoft does not have as fragmented a business model as you suggest. Their strategy involves extending the Windows, Xbox Live, and Zune brands across platforms and into the cloud, similar to what Apple (and perhaps even Google) are doing. Microsoft is in a much stronger position, however.

Also, Windows is in no way threatened. Mac OS will never extend beyond its niche for trendsters, computing novices, and media production professionals. Linux is for nerds with way too much time on their hands, and will never offer the polish, reliability, functionality, ease of use, and compatibility of Windows. Chrome OS is a niche product for netbooks that offers nothing to the all-important business world.


RE: Classic MS strategy
By Tony Swash on 12/21/2010 5:17:02 PM , Rating: 2
quote:
Microsoft does not have as fragmented a business model as you suggest. Their strategy involves extending the Windows, Xbox Live, and Zune brands across platforms and into the cloud, similar to what Apple (and perhaps even Google) are doing. Microsoft is in a much stronger position, however.

Also, Windows is in no way threatened. Mac OS will never extend beyond its niche for trendsters, computing novices, and media production professionals. Linux is for nerds with way too much time on their hands, and will never offer the polish, reliability, functionality, ease of use, and compatibility of Windows. Chrome OS is a niche product for netbooks that offers nothing to the all-important business world.


We could argue about this endlessly.

Suffice to say I shall keep my Apple shares and will not be purchasing any Microsoft shares ;)


RE: Classic MS strategy
By theapparition on 12/22/2010 10:15:22 AM , Rating: 1
quote:
Tony, I'll give you credit for what you've posted makes sense, and you seem to know a bit about what your talking about

No, not really.

For example, take his ridiculous straw man argument:
Take away MS's Windows/Office monopoly and the company would go under.

But you can't take that away. As much as he would wish it, they are the defacto standards in the world.

One could easily say:
Take away Apple's iOS and they would go under.

See what I did there?


"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer














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