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Windows Phone's "training wheels" may get a rebranding

Many have second guessed Microsoft Corp.'s (MSFT) decision to continue to support the Windows Phone-esque reskin of Google Inc.'s (GOOG) Android, Nokia X.  Indeed Microsoft's logic seems somewhat peculiar given that you can get a pure Windows Phone device (e.g. the Lumia 520/521) for under $100 USD -- cheaper than most Nokia X handsets.
However, the Nokia X's pre-orders of 10 million in March (including 4 million in China) hints that in these markets the ability to load pirated apps via third-party app distributors and sideloading (a key "feature" of Android) can be worth at least $50 USD in effective device value.  If the flawed first generation Nokia X can sell like that, Microsoft is ready for a device boom with the more refined second generation Nokia X platform.
Amidst that backdrop top smartphone leaker @evleaks has posted some highly interesting news:
This is perhaps the culmination of rumors that Microsoft was considering adding the ability to use Android apps on Windows Phone (similar to BlackBerry Ltd.'s (TSE:BB) compatibility layer).

Nokia X2

Google is cracking down on reskinning.  With Android 4.4 KitKat, it moved many of its key APIs (which are required by many apps) into the proprietary part of Android, which is not available to (unlicensed) reskinners.  Since then it has flat-out banned reskinning of some variants of the "open source" Android code.  However, Google can't really stop rivals from achieving app compatibility with Android; after all, BlackBerry is already doing this.
Microsoft will likely be forced to continue to maintain an older version of Android if it wants to continue its strategy.  But what some don't seem to understand is that what Microsoft is doing is actually more than a little bit brilliant.
Neowin writes:

[F]or Microsoft to start offering Android-powered Lumias seems like a strange decision, if only for the purpose of undercutting its own OS.

But that comment is written from the mindset of an American consumer.  Nokia X -- perhaps soon to be rebranded as Lumia handsets -- indeed makes no sense from the perspective of the U.S. and European markets.  But the first-generation Nokia X didn't even ship to these markets.
Where Nokia X -- or Lumia Android -- makes perfect sense is in markets like China and India where any device that does not openly embrace piracy is condemned to a small niche market share (e.g. Apple, Inc.'s (AAPL) "small" market share in China).
Nokia X
The latest iPhone saw only 1 million preorders in China; the Nokia X saw more than 4 million preorders in the region. [Image Source: Android265G]

Microsoft is a mass seller -- so it needs a device that can compete with pure Android competitors in these markets; it can't operate as a high-end boutique brand in these markets like Apple.  At the same time it would be unacceptable to weaken Windows Phone's piracy protections, as that would undermine Microsoft's growing success in Europe and the U.S. (where the ability to pirate is less of a "selling point").
With Nokia X Microsoft can have its cake (unit sales) and eat it to (by guiding the small minority of high end customers in these regions to true Windows Phone Lumias).
So for those who feel Nokia X doesn't make sense, remember -- it isn't meant to make sense to you.  Microsoft isn't selling these devices to you.  Nokia X -- and its potential Lumia successor -- is Microsoft's answer for gaining market share and introducing Windows Phone in developing markets where rampant piracy has left the laissez-faire Android without a true competitor.  In that context Microsoft's Android play might actually make sense.

Sources: @evleaks on Twitter, via Neowin

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By drycrust3 on 7/7/2014 4:53:19 PM , Rating: 2
Microsoft needs to stop wasting time on Android bastard child phones. X was bad enough, but to make Android Lumias would be beyond stupid.

The problem Microsoft has is this: apps dictate sales! Notice that? People buy according to the apps they can run on the phone, which means they more or less buy according to the OS, they don't buy simply according to brand any more. A familiar OS running your favourite apps is more important than the quality brand you used 10 years ago. When you compare the apps on Android and iOS, both of which are in the million plus region, with those on Windows Phone x, which is around 255,000, you can see that at first glance Microsoft has a hard job ahead to make their Nokia popular, because people aren't interested in Nokia, they are interested in apps. Popular conception is the more apps the better, so people think an OS with 1 million apps in the application library is better than one with 255,000 in it. Of course, when you go to find an app to do a task and find there are 200, some of which want to know exactly where you are at any moment, others want you to buy things, etc, you can see that with careful marketing Microsoft could exploit the fact that bigger isn't better.
That aside, there is another problem with Microsoft's hybrid Windows-Android child, in that because it isn't full blown Android how can an app developer be sure their app will run correctly on it? They can't! The question then becomes who will Microsoft blame when apps fail to work correctly? And, just as important, will the public blame Microsoft's hybrid Wind-droid OS or will they blame the developer and Android when there are problems? The only way to make sure apps run correctly is to have full blown Android underneath the desktop, and that raises another thorny issue.
If Microsoft want to run real Android on their phones then they would also want to join the Open Hand Set Alliance, which is where the future of Android is decided, and I'm quite sure there would be a lot of thought given to that.

"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser

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