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+ Analyst: Symbian Is Dead, Long Live Windows Phone?!

15 February 2011

According to Pyramid Research:
Symbian Is Dead, Long Live Windows Phone!?

Symbian is deadThe recent partnership of Nokia and Microsoft announces Nokia's adoption of Windows Phone (WP) as its primary smartphone strategy. Symbian smartphones will still be shipped during its transition to WP7 over at least the next 6 to 8 quarters, and the long-awaited MeeGo device will eventually see the light, but there will be only one MeeGo device, according to a new research note from Stela Bokun, Senior Analyst at Pyramid Research.

According to Steven Elop, Nokia's success will depend on two paths of differentiation, notes Bokun in a research note posted at Pyramid Points. The first one will be differentiation of the WP platform from those of Apple (iOS) and Google (Android). To that end, Nokia will invest its resources and focus on growing the WP ecosystem.

The second level of differentiation will be within the WP ecosystem itself by leveraging Nokia's unique navigation, LBS and local advertising capabilities to effectively compete with other vendors that already use WP7 on their devices, notes Bokun.

In order for this strategy to succeed, according to Mr. Elop, two things need to take place:

1. Nokia will help Microsoft address their ridiculously high WP production costs, therefore lowering the price of Windows-based handsets.

2. Nokia needs to become less bureaucratic to decrease opex and R&D related costs. This will be achieved via significant layoffs and a change in leadership structure announced at the Nokia Strategy event today.

At first, the story sounds quite convincing. But (there is always a “but”), let us add another couple of necessary points of analysis. First, 2011 is likely to be a very bad year for Nokia, much worse than what most of us analysts could have expected. While Nokia expects to ship another 150 million Symbian devices in its transition to WP, one really wonders which operators will want to include a Symbian smartphone in their portfolio, knowing that the OS is on its deathbed and that the demand for it will be practically inexistent? Not many, I assure you. Nokia needs to start shipping its first WP7 device ASAP if it is to leave the muddy waters in which its currently swimming.

Nokia - Microsoft Global Reach
*click to enlarge

The second question that we need to ask ourselves is the following: What does Nokia stand to learn from shipping only one MeeGo device? By announcing that there will be no MeeGo upgrades or follow-ups, Nokia is virtually killing any potential success for the device and has absolutely nothing to learn from such endeavor. It seems as if Mr. Elop simply didn’t have enough resolve to stand in front of both Nokia's MeeGo team and the news-thirsty industry analysts and journalists and say, “Guys, there won’t be a MeeGo device. MeeGo NooGo! It just doesn’t make sense! We are remaking our company and will start with a clean slate!” This apparent lack of resolve on behalf of Nokia’s Number One, and ambiguity surrounding the need for MeeGo and the future of Symbian, has resulted in an instant 13% tumble in Nokia’s shares.

It remains to be seen how thiss announcement will affect Nokia, Microsoft and the industry as a whole. If all else fails, at least Nokia’s employees (at least those who survive the upcoming changes) are likely to get a free MeeGo device as a Christmas present from Santa Elop – there will be too many left in stock!


Source: Press Author: Teo

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