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Nokia also unveils pair of low-end Asha phones for ~$40 and ~$60 running Symbians builds

As anticipated, Microsoft Corp.'s (MSFT) inheritance got a little bit more complex early this morning, with Nokia Oyj. (HEX:NOK1V) unveiling a series of budget devices based on a forked version of Google Inc.'s (GOOG) Android operating system.  The devices -- the Nokia X, XR, and X+ -- imitate the look of the Windows Phone, while using a mix of Nokia, Microsoft, and third-party software.
I. Mean the Window Ph... Er "Androids"
The budget devices are priced at €89, €99, and €109 respectively (roughly $120, $135, and $150 USD before taxes and subsidies).  The X is the base model, while the XR adds more memory and the X+ adds a bigger screen.
Developed under the codename "Normandy", these modified Android smartphones answer a key dilemma of how to insert Windows Phone into low-end devices.  Much of Nokia's sales in developing markets such as China, Indonesia, India, and Brazil are still feature phones.
Nokia X screens

Previously, devices at this price point were branded under the Asha lineup and exclusively used S40 (Series40), a derivative of the Symbian operating system.  Asha isn't going anywhere; Nokia is looking to supplement it with and Android "cross-over point", Nokia X.  Nokia X will serve as a set of training wheels accustoming buyers on the cusp of mid-tier Windows Phone offerings to get accustomed to the look of and some of the services of the platform via an Android clone.

(The music is Mobscene's remix of 501's "And it Begins", for those curious.)

Former Nokia Chief Executive Stephen Elop -- who is currently Nokia's Executive Vice President, Devices & Services while it awaits completing a $7.2B USD acquisition by Microsoft -- comments:

Lumia continues to be our primary smartphone strategy.  Lumia is where we will continue to introduce the greatest innovation.

[However] we see the X family being complementary to (Windows Phone) Lumia at lower price points.  Even as you see Lumia push lower and lower, you will see us push lower with Nokia X below that.

There's quite a lot of vendors ... who made the Android decision but couldn't differentiate.  We wanted to build with Microsoft a third ecosystem, and that's what we are doing while others fall by the wayside.

The new smartphones come in six of Nokia's iconic colorful body designs.

Nokia X back

Nokia Product Marketing Vice President Jussi Nevanlinna said the new approach will allow Nokia to bring popular apps to its budget lineup with greater ease, commenting to Reuters:

Our fans oftentimes tell us 'We love your hardware, we love your products, but we also love our Android apps'.  Can you make something happen so the Android apps magically run here?

Roughly 75 percent of Android apps will run without trouble and can simply be resubmitted as is to the new Nokia-branded Android app store.  As for the 25 percent that don't, most are currently tied to Google's proprietary APIs -- such as location-services, multi-player gaming services, or internet browsing.  Nokia is also working to provide API support to allow easy porting of these apps.

Nokia X in hand

Given the pending acquisition, Microsoft presumably is onboard with the plan, which would mean that when it acquires the Nokia Devices unit it would find itself in the odd position of selling Android smartphones.
II. Series 30, 40 Symbian OS Still Alive on the Ultra-Budget End
Microsoft's lineup will also continue to consist of Nokia Symbian devices on the low end.  Alongside the new Android-based Nokia smartphones, the company also announced a pair of Symbian handsets.  The lower end Nokia 220 runs S30 and priced at €29 (~$40 USD) before taxes and subsidies. 

Nokia Asha 220

The slightly fancier Nokia 230 runs S40 and will be priced €45 (~$60 USD).

Nokia Asha 230

Both the Nokia 220 and 230 use compressed browser technology similar to the technology pioneered by Norway's Opera Software ASA (STO:OPERAO).  There's a bit of Microsoft touch via the integrated Bing search.  Twitter Inc. (TWTR) and Facebook Inc. (FB) apps are preloaded onto each budget device.
As for Nokia, it gains a source of revenue via the HERE location service (which Microsoft pays Nokia for) and app store (which is free, but which revenue shares between app developers and Nokia).  Nokia has promised not to build a new phone unit to compete with Microsoft.  However, revenue from services on the Nokia X and similar devices -- along from the $5-10 USD in patent licensing fees it pockets for nearly every Android device sold -- could give Nokia a cash pile to reenter the market as a competitor to Microsoft in 2016.
If Nokia launches a pure Android lineup in 2016, it could be a dangerous foe to current Android device makers.  As Samsung Electronics Comp., Ltd. (KRX:005935) (KRX:005930) and other smartphone makers are encumbered by an estimated $15-30 USD in patent licensing fees per device, Nokia's devices could quickly match such experienced rivals in profit margins.  Nokia owns long-term licensing pacts with Samsung and Apple, Inc. (AAPL) (who make regular payments to Nokia for the patents) -- plus a long-term licensing deal with Microsoft which is thought to be royalty free.

Sources: Nokia [1], [2], [3], Reuters

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Sailing against a typhoon.
By drycrust3 on 2/24/2014 10:41:31 AM , Rating: 1
Roughly 75 percent of Android apps will run without trouble and can simply be resubmitted as is to the new Nokia-branded Android app store.

This is the most stupid phone on the market! Why not use a full blown Android that runs 100% of the apps? There are so many things wrong with this that I cannot see heads not rolling once Microsoft take over Nokia because of this phone. If Nokia had gone Android instead of Windows Phone when Elop took over, then no one care now about this, but Nokia chose Windows Phone (which wasn't ready for the market then), and that is the path they should be going down.
To say they need to do this to sell cheaper phones is nonsense: Microsoft set the price of the licence, so all Nokia need to do is ask for a cheap price licence and they'd get one.
If, several years ago, Nokia had wanted, they could have joined the Open Hand Set Alliance, which govern the operational standards of Android, and Microsoft would love to be at the table helping set those, but they can't now because Nokia are selling a fork of Android, which is in violation of the terms of the OHSA.
This phone looks like it is meant to upset Microsoft and Google.

RE: Sailing against a typhoon.
By dani31 on 2/24/2014 10:51:40 AM , Rating: 5
You have no ideea what you're talking about.

If Microsoft would have gone with your so called "full blown" Android, it would have needed to support Gmail, Google Maps, Google+, all Google's advertising and location services. Microsoft could never ever do that, because they have competing products.

Microsoft is actually using a full blown Android, just without Google's services. The only apps that will not work properly are the ones that depend on Google API's (such as an app trying to show a location on Google Maps).

AOSP is free and open source, and any one can use it and fork it, without violating anythins.
OHSA on the other hand is about being locked into Google's services. Nothing free and open there.

RE: Sailing against a typhoon.
By Reclaimer77 on 2/24/14, Rating: 0
RE: Sailing against a typhoon.
By Da W on 2/24/2014 11:11:24 AM , Rating: 2
And why would you be happy about that? You own google?

RE: Sailing against a typhoon.
By Reclaimer77 on 2/24/14, Rating: 0
RE: Sailing against a typhoon.
By StevoLincolnite on 2/24/2014 6:36:06 PM , Rating: 2
To be fair, Microsoft does earn allot of money from Android licensing, so whether Android or Windows Phone is pushed they still win.

Although I do wish they would only push Windows Phone (Which in some countries is seeing some stupidly phenomenal growth) expanding choice for the consumer is never a bad thing.

RE: Sailing against a typhoon.
By Reclaimer77 on 2/24/2014 6:41:43 PM , Rating: 1
They aren't really offering users choice because they're stripping everything out of Android that differentiates it from Windows Phone.

They could even lock down the settings so you can't customize it as much, or use features that Windows Phone doesn't have.

The average person isn't a programmer. When they think "Android" they think Google Search, Google Now, and the Play Store. Without those things, it might as well be Windows Phone or iOS.

RE: Sailing against a typhoon.
By ritualm on 2/24/2014 8:24:44 PM , Rating: 3
When they think "Android" they think Google Search, Google Now, and the Play Store. Without those things, it might as well be Windows Phone or iOS.

Tell that to China. Their phones run Android - they just aren't allowed to have any Google services courtesy of the Chinese government. What name do they call their OS'es? Android!

Reclaimer77: This is madness!
Everyone else: Madness... THIS! IS! ANDROID!

RE: Sailing against a typhoon.
By Labotomizer on 2/24/2014 11:47:59 AM , Rating: 3
I disagree, I see a hint of genius here. First, the interface looks a lot like a Windows Phone. Second, it runs Android apps. And third it uses Microsoft's services. Basically it gives someone who hasn't used a smartphone access to a large app store while getting them transitioned to MS services. In the event they want a "good" phone the next step would naturally be Lumia and not a Galaxy.

Granted this could backfire tremendously. If you rooted this you could install the Google APIs and apps if you wanted. But I don't see this as a failure on Windows Phone part or an admission of such. In fact the early impressions are that it doesn't even run as well as the bottom of the barrel Windows Phones and they're priced the same.

Also, anyone else notice that it sure seems to like the color green and has an X in it. Perhaps this is to hint at Xbox without actually using the branding. This could be good moving forward. It's not a phone to replace your Android or Windows Phone. This is for the billion users out there that will be moving to smartphones in the next few years.

RE: Sailing against a typhoon.
By dashrendar on 2/24/2014 12:31:26 PM , Rating: 2
I agree with you.

This is using Android as a weapon against Google.

The OS is meaningless on a smartphone. What matters are the apps and the ecosystem. Ask yourself? Do you really care that much about the OS if it didn't have the apps you needed and supported your daily activities such as e-mail, maps, navigation, contacts, etc.?

With this device, Microsoft wants people to use the Microsoft ecosystem while having access to all the gazillion apps available on Android. This is until the Windows Marketplace matures and gets all the worthwhile and popular apps, and then the user can switch to a higher end Windows Phone.

That's what I think.

RE: Sailing against a typhoon.
By Argon18 on 2/24/2014 5:49:44 PM , Rating: 1
"The OS is meaningless on a smartphone. What matters are the apps and the ecosystem."

Lol, what? The apps and ecosystem are defined by the OS. If your phone runs iOS, you are locked into Apple's ecosystem. If your phone runs Microsoft OS, you are locked into Microsoft's ecosystem.

Android locks you in to certain google services, but at least it isn't a closed proprietary OS like the offerings from Apple and Microsoft are.

So how exactly does a stripped-down Android phone get people into the Microsoft ecosystem? Hint: it doesn't.

RE: Sailing against a typhoon.
By Mint on 2/24/2014 2:06:07 PM , Rating: 2
It's almost like a trojan into developer mindshare.

Nokia has great market share in India and Africa with their Asha line, and they're parlaying that into an opportunity for Android devs with only a few man-hours of work. What's more is that it allows pricing differentiation for this low-income market. Every business always laments lost margins from existing customers when it lowers prices to expand sales volume.

Suddenly this strategy makes a bit of sense. I wonder if they're going to find a way to virtually automate the porting of Windows Phone apps, too? They can add whatever they want to the Android OS to make it work.

RE: Sailing against a typhoon.
By atechfan on 2/24/2014 12:31:13 PM , Rating: 2
I didn't actually think this would get released. I assumed it was a Plan B for Nokia if MS didn't buy them. Of course, Nokia isn't owned by MS yet, so the future of these devices is uncertain. Even more reason to not buy one.

RE: Sailing against a typhoon.
By nikon133 on 2/24/2014 3:26:28 PM , Rating: 4
I'm not following you.

Should Apple drop iTunes from Windoes desktop? Isn't that equally pathetic?

Should Google drop their services from iOS, OSX and Windows? Isn't that equally pathetic?

If you think they should, I would agree that Microsoft should drop their services from competing platforms.

But. Apple is where they are because they did have iTunes on Windows, thus making iPod/iPhone accessible to population much larger than Mac users.

And Google's initial success was related to availability of their services on Widows desktop. Without that, they would be, what? OSX/Linux exclusive?

So now, Android being Windows of mobile world - why is it strange that MS wants Android users to be exposed to, Bing, Here and other MS/Nokia services?

I think your bias is really crazy inflated.

RE: Sailing against a typhoon.
By Reclaimer77 on 2/24/14, Rating: 0
RE: Sailing against a typhoon.
By ritualm on 2/24/2014 5:32:51 PM , Rating: 2
Anyone with any sense thinks this is a garbage product. Windows Phone users want a Windows Phone, Android users want a real Android phone....uhhh idiots that don't know any better I guess, might buy this one?

You are not the target market audience these phones are aiming for. Full. Stop.

Stop talking nonsense.

RE: Sailing against a typhoon.
By atechfan on 2/24/2014 8:29:48 PM , Rating: 2
I'm not really sure what the target market is either, and I'm a MS guy. Nokia already has Windows Phone models that are cheaper than these offerings, so it isn't the emerging market that benefits. The only people I see buying these are the small subset of people that like Android but hate Google. Once they've sold those couple dozen, then what?

Nokia has the 520 for budget smartphone buyers, then they have Symbian on Asha phones if they need to go cheaper.

RE: Sailing against a typhoon.
By Reclaimer77 on 2/24/2014 8:31:37 PM , Rating: 2

Thank you. There IS no target market for this phone.

RE: Sailing against a typhoon.
By atechfan on 2/24/2014 8:39:40 PM , Rating: 2
I understand what Nokia is trying to do. I just don't think it will work.

RE: Sailing against a typhoon.
By a5cent on 2/25/2014 9:31:08 AM , Rating: 3
I think the target market includes those people who like the Nokia brand and who are also looking for an Android device. Although this is very uncommon in Europe and the U.S. , it is very common in Asia and Africa. For many people in these areas, Android is a must, because their smartphone is their only computing device. WP and iOS are better suited as companion devices, which has lost Nokia many customers. This is, in part, about giving those customers a chance to stick with their preferred brand.

RE: Sailing against a typhoon.
By drycrust3 on 2/25/2014 10:07:30 PM , Rating: 2
Microsoft is actually using a full blown Android, just without Google's services. The only apps that will not work properly are the ones that depend on Google API's (such as an app trying to show a location on Google Maps).

The problem with this is currently people write apps that mostly don't use Google's APIs, but as time moves on more and more apps will be written, or re-written to include more and more Google API. Supposedly 25% of apps currently won't work on the mutant Android, well, don't be surprised if in a few years it is more like 60% won't work on it.
I guess Microsoft could produce their own APIs, but why not just put the effort into improving Windows Phone?

RE: Sailing against a typhoon.
By atechfan on 2/27/2014 7:46:54 AM , Rating: 2
OK, been talking to a few people I know at MS. From what they said, MS isn't very happy about this phone. But they couldn't stop it. Until the acquisition is finalised, Nokia much carry on business as if the acquisition wasn't happening. Since this phone was planned before MS made their intent to buy the handset division was known, the project was already greenlighted and MS couldn't stop it.

RE: Sailing against a typhoon.
By Flunk on 2/24/2014 2:29:51 PM , Rating: 2
I'm thinking of buying one of these to use as a paperweight. It will remind me that just because you can do something doesn't mean you should.

RE: Sailing against a typhoon.
By Flunk on 2/24/2014 2:30:26 PM , Rating: 2
Maybe I'll wait until they release a version with Microsoft written on it instead of Nokia

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