As we know, Nokia is going to announce a cooperation with Microsoft on Friday (11.02.11). Details are not known and so The usual rumors are growing: Nokia will dump one...

As we know, Nokia is going to announce a cooperation with Microsoft on Friday (11.02.11). Details are not known and so The usual rumors are growing:
Nokia will dump one of their OSes and will build WP7 devices instead.
This is shouting from so many corners that even me starts to think that it could happen. So let’s just pretend it’s true. The big question is: Which OS will be gone after Friday?

Before I go through the possibilities I see, I want to remind you, what Nokia’s new strategy has to look like, according to Stephen Elop:

The strategy must be elegant in its simplicity[...]. Our go-forward strategy must be remarkably clear [...]. Finally, we must believe that our strategy will maximize shareholder value.

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Possibility 1: Series 40

Nokia could simply stop to be a phone producer and could become a real smartphone producer with Symbian for the Low-End, WP7 for the High-End and MeeGo for tablets, smartbooks and ultra High-End smartphones.
This step looks very unrealistic at first but while writing about it, I start thinking that it could be possible. The smartphone market is the most profitable part of the phone market so shareholders would love it. The dumbphone branch of Nokia could be sold or spun of like Siemens tried it. Concentrating on just one market segment is elegant, simple and good for shareholder value. And in addition it’s very radical, so it would make sense to be “very impressed with Nokia’s willingness to embrace change and turn the ship around.”, as Rich Green, Nokia’s CTO, said.

Another point for this strategy is the end of the featurephone: it won’t take to long until an E5 can be produced at the price point of an C3-01, actually, the difference is already marginal and the E5 is for sure the more capable device.

On the other hand, the fact, that the C3 was “was one of the top contributors to our overall revenues and gross profits” doesn’t sound like it is likely that one would like to give this part of the enterprise away.

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Possibility 2: Symbian

I’m sure, if you ask a lot of tech blogger which smartphone OS is the most unimportant one, Symbian would get the majority of votes. This is not about sold units or energy efficiency, it’s simply about popularity in the media and here Symbian falls behind. So why not getting rid of all these bad publicity by getting rid of Symbian? I see three strong reasons against this:

1. Market segments

A huge amount of the sold Symbian phones were relatively cheap devices. Maybe under 200$. It is well known that with the dead of the featurephone the demand for cheap smartphones increases massively. There is no chance that WP7 could scale down to this price point. Microsoft gives very low choice on the hardware side (must be 1ghz, wvga capacitive touch screen, etc.).
With this decision Nokia would lose 25 million sold units with little to no chance to fill this gap with WP7 devices.

2. Competition with MeeGo

With the hardware requirements and the style of WP7, there can’t be another segment than the High-End. If Nokia keeps MeeGo, it could also only be in the High-End. So Nokia would fight against oneself unless they would separate the markets f.e. geographically.

3. Legacy Support

There is a huge amount of Symbian devices already out there, including more than 5 million Symbian^3 devices. The shipment of E7 just begun and is said to be one of Nokia’s top-sellers. So even if they would abandon Symbian now, they would have to support it for at least another 18 months. If not, they would lose more trust and (mostly loyal) customers than they could ever regain by adding WP7.

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Possibility 3: MeeGo

The dream of MeeGo was formed almost exactly one year ago. Nokia has not a single MeeGo devices launched since then. There is no customer base, no existing ecosystem to leave behind and no guarantee for success for coming possible devices.
Killing MeeGo now before Nokia is seriously committed is one strong possibility in my eyes. But even with these compelling reasons to kill MeeGo now, there are some strong counter arguments, which could overweight the gains:

1. The Qt-Platform

With only Symbian left and WP7 for the High-End, I would not expect to see a lot of western-based developer jump on the Qt ship. And why should they? The much more interesting platform would be WP7 (at least, if you believe in western tech blogs). I don’t think we would ever see a Qt based DropBox-App, if MeeGo won’t happen.

2. The Tablet-Factor

Yes, it is true, this post is named after this argument, to make use of the buzz-word “tablet”. At least I admit it. But still, it is a viable argument:
If Nokia decides to drop MeeGo, they would be without any OS for a possible tablet. Since Nokia “invented” the Internet tablet with the Nokia 770 who could really believe that they won’t try to get back into this (now rapidly growing) market? But without MeeGo, what should they use? WP7 is not meant for tablets, Symbian would be hard to sell if you’ve already banned it from you High-End smartphones and Windows 7 was never really attractive on a tablet form factor. Nokia could wait for Windows 8, but that would make them lose another 1-2 years and they would buy a pig in a poke.

Killing MeeGo would kill future tablet opportunities, Qt as platform and Symbian for the higher Mid-End (through missing apps). I don’t think that shareholder would be happy about this.

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Possibility 4: All

This would be quite radical, wouldn’t if? No more Symbian, no more MeeGo (maybe even no more Series 40), just Windows Phone 7.
The problem with this: Nokia would compete against HTC and the other WP7 manufactures. But Nokia has never produced a single 1 Ghz mobile phone. Would be quite a risk to put all one’s eggs in one basket. Not realistic, I think. Don’t forget, the mentioned “Tablet-Factor” and “Legacy Support” would affect this strategy as well.

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Two other possibilities would be to add WP7 on-top, maybe just for the western market or to announce… don’t know… a collaboration with Microsoft to bring the Windows Live Video Chat to the Ovi Chat. Even if it would be nice, I think it would produce a lot of long faces since the expectations are clearly something else.

To wrap this up, I think I provided strong arguments why dropping any already existing or planed platform would have some negative effects for Nokia. All these arguments are no guarantee that it won’t happen after all since we know, the three-headed beast (consisting of strange analysts, ranting investors and western tech-bloggers) has a lot of influence.

Personally I simply don’t know. I would guess it is one of the last two options. But I am looking for Friday, to get the answer.
What do you think?

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