Nokia's Android Strategy Leading Customers To Microsoft Services, Unlikely To Lay The Groundwork To Create Future Lumia Owners

Paolo Gorgo profile picture
Paolo Gorgo

Executive summary

  • Stephen Elop's Nokia (NOK) bet the farm on Windows Phone with no plan B, and lost. Microsoft (NASDAQ:MSFT) had to come to the rescue and buy out Nokia's handset business.
  • Microsoft-owned Nokia now introduces three forked Android-based smartphones, Nokia X, Nokia X+ and Nokia XL, targeting the low- and mid-end market.
  • The strategy shift underlines the many missteps made by old Nokia, but makes perfect sense for Microsoft.
  • The new Nokia phones don't rely on Google's (GOOG) services but direct customers to Microsoft's email, cloud, messaging and search services.
  • Nokia's new phones allow local markets to use their own third-party Android app stores, and make converting apps as easy as 1- 2 - 3 - however, Nokia's Android phone's won't lead to Lumia sales in the long term.


Nokia's forked Android phones not really a surprise for the market

Nokia's rumored budget Android-based smartphone is finally out:

Previously codenamed Normandy, Nokia has used its MWC conference to unveil the Nokia X - a phone that's technically running Android, but with more than a few tweaks.

The device is described by Nokia as "the perfect phone for emerging markets".

All about bringing customers to Microsoft's services, and admitting a defeat as to apps

Here is the best commentary we've found so far to describe Microsoft-owned Nokia's strategy with the X range:

Bottom line: Nokia X is a Trojan horse stuffed with Microsoft services, pushed inside Android's app-rich empire

As Saamer Singh noticed, Microsoft makes no secret about it:

The big challenge for Nokia was to make this new Trojan horse as appealing as possible to customers. Allowing the use of third-party Android app stores, which are very popular in many emerging markets, and making converting apps for this new device range as easy as 1 -2 - 3 was

This article was written by

Paolo Gorgo profile picture
Paolo Gorgo' founded Nortia Research to pursue his passion for equity research. Paolo is an Italy-based investor who mostly analyzes distressed debt and turnaround cases. On Seeking Alpha, he started covering the Telecommunications Infrastructure and Colocation Industry, whose turnaround has been impressive - see his article: "Equinix's Journey From IPO To The Nasdaq 100 Through Near Bankruptcy". Paolo's commentary has been quoted both by news organizations like Reuters and listed companies like Equinix, Switch and Data, TelX (Digital Realty), etc. He can be reached at: admin [at] nortiaresearch [dot] com

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