As bad as Nokia’s financials look right now – a $4 billion drop in sales won’t make anyone’s day – don’t consider the Windows Phone move a failure just yet. They’ve done what many phone companies have thus far failed to do – namely change swiftly with the times – and, more important, they’ve done it quite admirably.
If you’ll recall, the first real Android phone was HTC’s G1. Considered a clunker by all but the most die-hard of users, the device sold fairly well (1 million in 2008). But it did something more important than make T-Mobile the first Android carrier – it grabbed a certain contingent of user who understood Android, understood the framework, and would follow Android to the grave. The popularity of the G1 was a direct reaction to the burgeoning iOS platform. The same thing happened in the WebOS space, but WebOS was exactly the wrong thing at exactly the wrong time and is a disaster distinct from the Android launch.
Over time, the maker of the G1, HTC, got better and better at making Android phones. The experience gained from the G1 allowed manufacturers to rejigger their sales strategy, leading to the famous Droid marketing campaign and the hysteria for Google’s Nexus line.
Nokia is in a similar space. An outside software product is trying to take market share and will probably flounder for the first few months. Nokia has pivoted completely. Their popular Symbian smartphones are essentially dead and their Windows Phone line is curtailed until popular adoption grows. Most important, they’re taking a bath on the Lumia line by pricing it at or below the comfort level of most casual smartphone buyers
They’re essentially selling loss leaders in order to gain market share. Microsoft knows it and Nokia knows it and I assure you HTC, Samsung, and LG know it. They only folks who shouldn’t be worried – yet – are Apple yet I suspect Microsoft is definitely on their radar.
I can say one thing without equivocation: Windows Phone is than Android. WinPho is monolithic, there are no issues of branching or hardware compatibility, and UI familiarity will soon be bolstered by millions of Windows 8 installs around the world. Android is great if you’re a small manufacturer and you just want to dump a stack onto what would have once been called a feature phone. Windows Phone is great if you want the largesse, the popularity, and the trustworthiness of Microsoft behind your product.
So ignore Nokia at your peril. Their strategy is just right at just the right time. Remember: nobody ever got fired for installing Microsoft. Not even Stephen Elop.