How Microsoft Can Put Nokia's Recovery In High Gear

Includes: MSFT, NOK
by: Charles Santerre

The following is a list of issues that I feel are very important for Nokia (NYSE:NOK) and Microsoft (NASDAQ:MSFT). If addressed, they can help both companies. If not, both companies' mobile success will be mixed at best.

The image of Internet Explorer and Microsoft on the desktop influence people's mobile choices.

Problem: I am a computer tech and run my own small business. I have the privilege to examine many users' computers and what programs they use. On older machines running XP (there are still many, as you know), a lot of users are still using an outdated and therefore unsafe version of Internet Explorer. My job is to protect my clients. Therefore I always recommend switching to Firefox or Google (NASDAQ:GOOG) Chrome for XP users.

I explain to them that, in their wisdom, Microsoft has abandoned XP users of Internet Explorer. There is no technical reason for this; it all comes down to money. So when XP machines are replaced, users will likely load Firefox or Chrome as their browser of choice, and Google as their search engine because they have become accustomed to them and do not want to change. Therefore it's no surprise that Internet Explorer's share of users is diminishing year after year. Microsoft is shooting itself in the foot with its policy of not making the latest version of Internet Explorer available for all Windows users.

Solution: Microsoft changes its policy and makes the latest versions of Internet Explorer available for all Windows versions. People don't buy a new computer or update their OS because they want the latest IE, so this attitude is not a money-generating policy for Microsoft, it is a money-losing one. And once you make them an enemy, they will not return to being your friend.

Google search domination over Bing

Problem: On newer PCs, I see more and more that the default browsers are set to Google Chrome and Mozilla Firefox and the search engine of choice is, you guessed it, Google. You have a question? When was the last time you heard someone say Bing it! I have never heard this, and if the situation does not change, I will never hear it. In my work I am constantly looking for answers to my technical computer questions. I have tried Bing exclusively for a couple of months and have been disappointed to find out that I don't find answers to my questions as easily or sometimes not at all. When that happens, I Google it and find what I am looking for.

Solution? Well that's a multibillion-dollar question. Make it better than Google and let us know about your improvements constantly.

Influence and word of mouth are more important than ever in our connected world.

Problem: We can continue to believe that for most users, the biggest influence on the final choice for a smartphone will come from the clerk in the provider's store and focus on that. It is much more complex than that, as you know. We live in a connected world in which influence and word of mouth are much more prevalent than ever before. Users will enter the store with their baggage of experiences on the desktop and the influence that they have received from their trusted technical person, their younger family members and online acquaintances.

When they find out that all Android models are actually "Google phones," their confusion disappears. They smile internally and think to themselves: "Google provides so many wonderful services for free on the desktop; I like them. So their phones must be a safe bet." Do you think they share those feelings about Microsoft?: "The company that left me behind with Internet Explorer version 8? The company that's so big and makes so much money. They charged me over $200 for Word." They completely ignore the fact that Microsoft makes a search engine.

Solution: Improve Microsoft's public image. How? Again: Stop alienating current Internet Explorer users on XP and make Bing better than Google in all respects. Offering free protection software in MSE, which I install on every user's PC, whether new or old, and Officer Starter on new PCs were smart moves.

Other easy resolvable, minor issues

Until one year ago I had no reason to care about Nokia's fortunes. I became a shareholder and now I care very much about the company and its partner Microsoft. For the last 3 years and until one month ago I had a Sony (NYSE:SNE) Android-powered phone and would have stayed with Android on my new phone. Now I have a Nokia Lumia 800 and like it despite its shortcomings:

  • When I click on More web results on Bing, I get the same results as before, forcing me to scroll down past these results to the new ones.
  • The back arrow in Internet Explorer does not always work as expected. If you have just conducted a search, you can go back to a previous page, but if you go back to IE later and hit the back key, it will take you to your previous app instead of your previous page. There should be independent back and forward keys built-in to the browser.
  • There are no decent podcast apps to this day, and forcing me to use Zune to get my podcasts is very inconvenient.

Once these issues are resolved, users will have no reason to shun you, Microsoft, and they may start to like you if you provide them with very useful services that are easy to use. You won`t have to worry about the Android-Apple (NASDAQ:AAPL) clones, then and I won`t have to worry about Nokia being my worst performer in my stock portfolio.

Disclosure: I am long NOK.

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