Sunday, February 13, 2011

Can two turkeys make an Eagle? The curious alliance between Microsoft and Nokia….

All technology news columns today headlined the alliance between Microsoft & Nokia – the two old giants, respectively in software and hardware who so far individually failed to make a dent in the hot and raging US smartphone market.

The tweet from a Google executive, as reported in Wall Street Journal (Feb 12, 2001) was pretty clear – “Two turkeys do not make an eagle”. Interesting comment, but perhaps a little too early.

Those using a smartphone (i.e. those portable computers that run nifty apps and also doubles as a phone) know that the market here in US is largely a “Trio-poly” – dominated  by iPhone, Blackberry and Google with its band of phone makers running Android operating system.

Nokia is a dominant phone maker in he rest of the globe with its own OS – Symbian. These Symbian phones still have the biggest market share outside the US. In fact in many developing countries, Nokia is synonymous with mobile phone, just like Xerox was once synonymous with photocopy. Yet Nokia’s smartphones did not quite click in the US and its eco-system of apps, based on Symbian never quite caught on.

Microsoft had a similar story from the software side. As this tech dinosaur continues to have a thriving cash cow in its continuous re-incarnations of Windows OS, its forays in to successful hardware so far is limited to Xbox gaming system. Its repeated attempts at music player (Zune) and phones so far did not quite pan out.

Enter Stephen Elop, the new Nokia CEO, freshly harvested in to Nokia from Microsoft who promptly goes in to action, quickly pushes Nokia in to bed with his previous employer. In the process, Nokia is also sidelining, not just Symbian but  MeeGo, the budding open OS it was sponsoring specifically for smarphones.

On paper, the alliance is complementary and hence should be promising. One lacks a successful hardware platform and the other needs an OS that could pull it in to the upper echelons of smartphone market. Success or failure, the unfolding story would certainly be a sure-shot entry in to the case-studies that business schools love to teach in their strategy courses. 

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