Nokia Had an Android Phone In Development

puddingebola writes "Perhaps influencing Microsoft's $7.2 billion acquisition, the New York Times is reporting that Nokia had an Android phone in development. From the article, 'A team within Nokia had Android up and running on the company's Lumia handsets well before Microsoft and Nokia began negotiating Microsoft's $7.2 billion acquisition of Nokia's mobile phone and services business, according to two people briefed on the effort who declined to be identified because the project was confidential. Microsoft executives were aware of the existence of the project, these people said.' Perhaps Nokia feared they had put too many eggs in one basket? Whatever the case, the project is most likely dead at this point."

Comments

Like Nokia itself

[Anonymous Coward]

(dead at this point)

Wasted opportunity

[Samantha Wright]

Think of all the embracing, extending, and extinguishing they could've attempted! Probably not a good business decision, in retrospect. I bet MS's phone market share would've looked a lot better if they'd developed a super-fancy Exchange-oriented business email client for a line of custom Android phones rather than developing WP8.

Pricing

[1984]

I was actually more fascinated that the once-pioneer and market leader in mobile phones (outside the US) was being sold off for more than $1Bn less than the sloppy-thirds of Skype which is widely duplicated by free services.

Nokia is volume

[fermion]

If one is going to be a volume business in the mobile phone business, one has to sell android. It is the only thing that competes with Apple. Nokia is volume. At it's height Nokia had about twice the sales of Apple phones sales. Ms has been at this for 15 years and has never broken 20% of the market, and has generally had duds. Now with MS money they can be a boutique shop selling phones that do nothing. Unless Google stops backing up Android with lots of free to the user stuff, or unless MS starts supply free stuff to the end user(big skydrive, free cloud exchange, free online office) people are not going to pay for the phone then monthly fees to use MS services. Even Apple keeps prices low.

Re:Nokia is volume

[whoever57]

My prediction is that Microsoft will almost give away phones when they own Nokia's handset business. Micorsoft realizes that they are in danger of an entire generation learning that they don't need a PC running Windows and that this is complete disaster for Microsoft in the making.

How much money has Microsoft dumped into Xbox over the years? I suspect that those billions will pale into insignificance in comparison to Microsoft's plans for Windows Phone.

Re:Nokia is volume

[Sir_Sri]

Windows phone picked up about 3.7% of the market in 2Q 2013 - or 8.7 million devices. Of those Nokia shipped 7 million, and Samsung 1 million + other.

Now lets look at android. Sure, samsung shipped 73 million devices, but numbers 2-5 each shipped between 10 and 12 million units. LG, Lenovo, Huawei, ZTE

So while Nokia - and everyone else is getting completely smoked by samsung, they're actually catching up to the second tier of the pack at around 10 million units a quarter.

http://www.idc.com/getdoc.jsp?containerId=prUS24257413

So sure, nokia is managing about 1/4 the sales of apple with MS. And had 77% year on year growth. That'... well, is surprisingly good honestly. Even if they get half that much growth this year they'll be in the 2nd rung of smartphone makers behind samsung. Which given that they don't have semiconductor fabs is about as good as you can hope for.

Re:Microsoft buys Microsoft

[symbolset]

They are the preventer of progress, destroyer of compatibility. At one point they decided they had destroyed every competing browser vendor, declared their browser "done" and fired the team who produced... IE6.

Re:How much of a role did an Android phone play...

[Anonymous Coward]

I doubt they would have been concerned about Nokia as an Android competitor - but they would have been very, very worried about losing their partnership with the maker of 80% of the Windows phones sold. Nokia is the only thing that is currently letting Microsoft believe that it has any chance at all with phones.

Windows already has fuck-all share of the smartphone market - reducing that to only 20% of fuck-all would just be humiliating.

Re:7.2 bil...That's $7.20 in poor peoples' money

[symbolset]

Without Nokia Windows Phone's global market share drops to 0.6 from 3.0. So... about $3B per point of market share. Otherwise they disappear in the noise of "other". There wasn't anywhere else they could get those points so cheap. They will probably scoop up Blackberry's customers too. They really have no choice. Smartphones and tablets will be more that 80% of clients sold next quarter, trending up. Next quarter will be the last quarter that traditional PCs outsell tablets, and people get tablets that are like their smartphone and work well with it, not one that works well with and like their PC. If people keep getting invested in phone and tablet apps on platforms that are not theirs, they are done for. Frankly I think it is too late, but to them they have no choice but to try.

Re:Like a Nokia Android wouldn't have bombed?

[symbolset]

Samsung only sells half the Android devices. So what you are saying is that a consortium of non-Samsung mutually opposed companies are colluding to build 400 million devices this year, selling them for perhaps $120 billion, and losing money on every one. Because they love Google, I suppose, and want them to do well despite their duty to their own shareholders. C'mon Hairy. Did you bring enough of whatever that was you took to share with everybody?

Re:Like a Nokia Android wouldn't have bombed?

[Stormwatch]

Indeed, Android was not the ideal choice for Nokia. If only they had their own next-gen mobile operating system, ready to go, and consistently praised by reviewers... oh, wait.

Re:Like a Nokia Android wouldn't have bombed?

[phantomfive]

Nokia had the best reception of any cell phone company (at least, that was their reputation). They made nice hardware. Apparently they have the best camera of any cell phone.

Given all that, they could have competed. Not because Android is magic, but because WP8 counteracts any benefit their phones ever had. Buy an Android with an amazing camera? Sure! Buy WP8 with an amazing camera? Does it even have a fart app?

Re:7.2 bil...That's $7.20 in poor peoples' money

[Samantha Wright]

Personally I'm a little sceptical about the "last quarter" part. The tablet market isn't saturated like the PC market is, making it an unfair comparison. And since a PC is still more essential to most households (and laptops can be price-competitive with tablets), it's inevitably going to be the preferred thing to upgrade in the long term for those who can't afford both pieces of hardware. It seems much more likely that the demand for tablets will eventually decline once the market's more mature, and stay in the shadow of the PC until the content creation situation changes, especially with cannibalization by so-called "phablets."

Newkia

[pineapplebytes]

So everyone here is completely and utterly unaware of the company that was formed the same day Microsoft bought Nokia called Newkia that aims to produce mobile phones for the Android?

Re:Like a Nokia Android wouldn't have bombed?

[boysenberry]

Nokia WAS fucked mainly cause its managed by morons, and Android certainly isn't magic, so I'm with you there. But it's a little more nuanced than you depict. A Lumia with Android would not have been a magic bullet, but it would have been, and still would be, one of the top 5 sexiest android phones. It would be looking super sexy on that shelf right alongside the S4s and HTC One's, but with WP, it's in a corner of the shop that only lost children end up in. A few tangential points: 1) There's nothing particularly unique about Nokia's PHB problem. Almost every large company suffers with these issues. Nokia may have been particularly bad, but they still manage to make beautiful phones at competitive prices. 2) At the time they chose WP, Samsung was nowhere near the market leader it is now. HTC was a pretty big deal at the time while the best that Samsung had out there was the S2. The "only samsung is making it and everyone else is drowning" is bs. The top dog can fall off his perch in a single year. The S2 situation was barely two years ago and you can kind of pinpoint Samsung's "mindshare dominance" starting at the S3: only slightly over a year ago! If you look at Xiaomi, the HTC One, Moto X, etc, you start to see that the gap between top dog and the runner-ups is miniscule. 3) There STILL is no "Apple of the android market". I mean there is no Android manufacturer who has taken the route of making superbly beautiful phones with no compromises. Top dog Samsung's phones are nowhere near as beautiful or high quality as the Lumias or iPhones. The few phones where it looks like any effort was made in design tend to be pretty much clones (like HTC One = BBX).

Re:Like a Nokia Android wouldn't have bombed?

[sharklasers]

You're correct that Samsung is the only company that consistently makes a profit with Android. But... it doesn't make any business sense to exclusively focus your entire phone business on a single mobile platform (Windows Phone) that hasn't shown to be particularly popular or profitable to anyone, without having say Android phones as something to fall back on if the gamble doesn't pay off. That to me screams ulterior motives.

Nokia didn't even TRY (as in, never actually put to market an Android phone, not including anything in R&D). If they put in a high-end Android phone with Lumia quality hardware, I'd very, very seriously consider it instead of Samsung. But they didn't fucking try because their ex-Microsoft boss had other ideas. And that's what's so annoying about this business. People using politics instead of common sense.

Re:Like a Nokia Android wouldn't have bombed?

[Peter H.S.]

Nokia could have had excellent success with an Android phone. Unlike the many upcoming phone makers you see today, Nokia had a huge market share with lots of loyal costumers who always chose Nokia phones when they needed a replacement phone. Nokia was a premium brand among consumers.

By not making a Android phone, all their loyal costumers were forced to go elsewhere. For years, 9 out of 10 Nokia costumers have chosen another brand of smartphone when they needed a new phone.
If Nokia could have kept most of those costumers with a Android phone, they would be dominating the market this day, and they would have kept the up coming competitors down, in stead of just handing over the smartphone market to them without a fight.

Re:Like a Nokia Android wouldn't have bombed?

[Anonymous Coward]

By what standard was it too late? They weren't exactly late to the smart phone market, they were early, and out of step. Symbian was under featured but still selling well all over the world. Symbian sales were still growing. They were profitable in smartphones. The switchover to Maemo would have been a challenge, but nothing like the challenge that Windows phone presented.

Quarter 3 2010 Symbian based Nokia smartphone sales: 26.5 M units and 3.6 B Euros revenues;
Nokia smartphone Average Sales Price 136 Euros, profits in smarpthone unit 335 M Euros

Quarter 4 2010 Symbian based Nokia smarpthone sales: 28.3 M units and 4.4 B Euros revenues;
Nokia smartphone Average Sales Price 155 Euros, profits in smarpthone unit 548 M Euros

http://communities-dominate.blogs.com/brands/2012/06/the-final-reckoning-of-burning-platforms-memo-damaged-nokia-by-wiping-out-13b-in-revenues-and-destro.html

Re:Like a Nokia Android wouldn't have bombed?

[kthreadd]

What you are descibing is essentially regular drivers. It's exactly the same thing that regular computer operating systems uses. The camera is not in any way built for Windows, it just happens that it require a driver and that driver is available for Windows Phone. With the appropriate driver the same camera should work in any operating system.

Re:Like a Nokia Android wouldn't have bombed?

[Holmwood]

Very true. I used a Nokia N770 tablet starting in 2006. It was fantastic for the time. Maemo (later Meego) was still a little rough around the edges, but very good. I thought at the time that surely it was only a year or so of polishing from mass release, and Nokia ARM-based tablets and smartphones starting at resolutions of 800x480 would sweep the market. And time ticked by. Even 2 and a half years later, Apple was still playing around at well under half the resolution, but time kept moving.

I still have my patched N800 somewhere with a (ridiculous for 2007) 65GB of storage.

Nokia could have dominated that market, or, at worst, been highly competitive with Apple.

Re:How much of a role did an Android phone play...

[c]

I doubt they would have been concerned about Nokia as an Android competitor - but they would have been very, very worried about losing their partnership with the maker of 80% of the Windows phones sold.

I suspect it's a bit of both. Losing market share would be really bad, but just as bad would be if their Windows Phone poster child Nokia did really well with an Android phone (and I can't see why they couldn't... they do good hardware) to the point that they no longer needed Microsoft propping them up financially. It would send one hell of a message to other mobile manufacturers... namely, "not worth the bother".

That perception matters a lot. Technology-wise, I doubt Windows Phone is that bad (I haven't seen one, myself). But the market thinks it's tainted, and that's what's killing it as much as anything else.

Re:Like a Nokia Android wouldn't have bombed?

[Kjella]

Like it or not folks, and this is coming from somebody that uses an Android phone that I'm quite happy with, with Android you have a race to the bottom where the VAST majority of Android sales in the under $185 price range and this market, the ultra low end? is a market that Nokia could NEVER compete in, okay?

I find it very strange that you argue that Nokia couldn't sell cheap phones when that was what they're best at. Nokia wasn't exactly the Ferrari of the cell phone world, they built boring solid cheap phones that the first world found dull and emerging markets gobbled up. Take those hardware skills, massive economics of scale, brand and sales network, build a cheap Android phone and they'd be giving Samsung a run for their money instead of maybe soon clawing their way back to second tier.

If there's a race to the bottom, you can either get in or get out but if you stand around thinking your customers will be happy to pay a huge premium for your product then 95% of the time you're wrong. For example just look at all the expensive solutions that have been replaced by cheap x86 desktops and servers. If you can take a cheap SoC from China, slap a $0 version of Android on it, put it in a phone chassis and sell it then that's what it is worth today, what that was worth yesterday doesn't matter.

Re:Microsoft buys Microsoft

[SpzToid]

rtb61's argument is well known, but I'll explain it.

Microsoft owned very little of Nokia prior to the sale.

So you understand this much already, which is good. However you are failing to take into account Stephen Elop who arrived a few years ago, from Microsoft, to become Nokia CEO, and eventually sell Nokia at a greatly reduced price to Microsoft, (which paid for the transaction with offshore profits that couldn't be repatriated into the US easily anyway.

What was the mechanism by which Microsoft got Nokia's board of directors and executives to implement plans to the disadvantage of minority shareholders?

Stephen Elop

For that matter, how were minority shareholders disadvantaged by Nokia not going bankrupt and receiving subsidies from Microsoft followed by a buyout for more than the phone division was worth.

By ditching their own OS efforts, i.e. Meego, and doing an exclusive for Windows Phone which failed dramitically.

Please, let me cite some Stephen Elop CEO facts for you to decide yourself:

NOKIA CORPORATION UNDER ELOP

First 6 months - Corporate quarterly revenues up 26% from 10.0B Euro to 12.6B Euro
Next 2.5 years - Corporate quarterly revenues down 55% from 12.6B Euro to 5.6B Euro

First 6 months - Corporate quarterly profit up 200% from 295M Euro to 884M Euro
Next 2.5 years - Corporate quarterly profit of 884M Euro turned into loss of -115M Euro

During first 6 months - Standard & Poor's rating for Nokia A, Moody's rating A2, Fitch's rating A
On last day of office - Standard & Poor's rating for Nokia junk, Moody's rating junk, Fitch's rating junk

On day before Elop announced as new CEO - Nokia share price $9.70
On day before Elop released his Burning Platforms memo - Nokia share price $11.28 (up 16%)
On day before Nokia announces Elop to step down as CEO - Nokia share price $3.90 (down 65%)

NOKIA HANDSET UNIT PERFORMANCE UNDER ELOP

First 6 months - Handset quarterly revenues up 25% from 6.8B Euro to 8.5B Euro
Next 2.5 years - Handset quarterly revenues down 69% from 8.5B Euro to 2.6B Euro

First 6 months - Total handsets profit first 6 months 1.8B Euro
Next 2.5 years - Total handsets loss next 2.5 years 361M Euro

First 6 months - North America quarterly handset volume flat from 2.6M units to 2.6M units
Next 2.5 years - North America quarterly handset volume down 80% from 2.6M units to 0.5M units

First 6 months - China quarterly handset volume up 13% from 19.3M units to 21.9M units
Next 2.5 years - China quarterly handset volume down 81% from 21.9M units to 4.1M units

Nokia handset market share when Elop started - 33%
Nokia handset market share when Elop departed - 14%

Nokia ranking handsets when Elop started - 1st
Nokia ranking handsets when Elop departed - 2nd

Gap to leader when Elop started - Nokia 50% bigger than number 2 (Samsung)
Gap to leader when Elop departed - Samsung 30% bigger than Nokia

This handset unit has now been sold (plus patents and mapping licences) for 5.3B Euro to Microsoft

NOKIA SMARTPHONE DIVISION PERFORMANCE UNDER ELOP

First 6 months - Smartphone quarterly revenues up 29% from 3.4B Euro to 4.4B Euro
Next 2.5 years - Smartphone quarterly revenues down 73% from 4.4B Euro to 1.2B Euro

First 6 months - Smartphone quarterly profit up 94% from 283M Euro to 548M Euro
Next 2.5 years - Smartphone quarterly profit of 548M Euro turned into loss of -168M Euro

First 6 months - Smartphone quarterly volume up 18% from 24.0M units to 28.3M units
Next 2.5 years - Smartphone quarterly volume down 74% from 28.3M units to 7.4M units

Nokia smartphone market share when Elop started - 35%
Nokia smartphone market share when Elop departed - 3%

Nokia ranking smartphones when Elop started - 1st
Nokia ranking smartphones when Elop departed - 9th

Gap to leader when Elop started - twice a