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Will Microsoft stop licensing Windows Phone after acquiring Nokia?

Posted: , by Michael H.

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Will Microsoft stop licensing Windows Phone after acquiring Nokia?
Right now, the Windows Phone platform walks the line between Android and iOS. WP is licensed to 3rd party vendors, like Android, but those vendors are not free to do with it as they please, more like iOS. The OS tries to give some customization while keeping control in the hands of Microsoft. With the bombshell announcement late last night that Microsoft will purchase Nokia's mobile division, sources are now wondering if Windows Phone will become an exclusively Microsoft product.

To be clear: there is absolutely no evidence as yet that this is the case, and could simply be fear and overreaction by industry sources, much like the chatter that happened when Google purchased Motorola. According to DigiTimes sources, not only is there a possibility that Microsoft will stop licensing Windows Phone after the Nokia acquisition is complete, but Windows Phone OEMs could simply abandon the platform all-together. 

We're assuming that these industry sources either didn't see, or didn't think much of the blog post that Microsoft Executive Vice President of Operating Systems, Terry Myerson published as the news was being made public. Myerson's entire post attempted to quell exactly this rumor, which Microsoft obviously knew was coming. Myerson started out by saying that "acquiring Nokia’s Devices group will help make the market for all Windows Phones, from Microsoft or our OEM partners."

Then, Myerson not so subtly referred to Microsoft's history, which is as a software maker, not a hardware maker, and certainly not as a company that makes closed down OS software. He really hit it home with this passage:
We have exciting ideas, and so do our OEM partners. Our partners bring innovation, diversity and scale to Windows. I’m always thrilled by the beautiful new device designs our partners are continually bringing to market. There’s a breadth of choice in form factor, finish and materials that deliver unique devices at a variety of price points. These devices feature innovative high resolution displays, audio, cameras, multi-finger touch screens, creative new hinge designs, new sensors, and other hardware enhancements that provide choice in the market and great experiences for users.

Our OS group mission is to enable the innovations of our hardware partners to shine through on the Windows platform. We collaborate with our Microsoft hardware teams in the same way we partner with our external hardware partners: we discreetly discuss technical and business opportunities, make shared bets, empower each other to do great work, and then operate closely together to delight our shared customers. We look forward to building new products together that will provide valuable business opportunity for the ecosystem and enable OEMs to deliver huge value to their customers, from consumers to the largest enterprise.

That seems pretty straightforward, and hard to misinterpret. But, that doesn't quite shut the door on the case. While we don't really agree DigiTimes sources saying that Microsoft will close down the Windows Phone OS and become the sole hardware maker for the platform, that doesn't mean that the decision will be completely in Microsoft's control. It could be that Microsoft will become the sole Windows Phone maker just by the nature of competition. 

Keep in mind that there are only a handful of Windows Phone partners, and the biggest partners - Samsung and HTC - have had their loyalty to the platform questioned on more than one occasion. Samsung is obviously focused on saturating the market with Android devices, while developing its own Tizen OS in the background, and seems far more interested in Windows 8 than Windows Phone. And, HTC is desperately trying to right the ship, but Windows Phone doesn't seem to be the answer there. 

The question of whether OEMs even want to try competing with Nokia is more the argument that we see where various OEMs are looking into other platforms because of Samsung's control over the Android market. But, the two don't quite match up. Less than one month ago Gartner estimated that Android made up almost 80% of the 229.6 million smartphone shipments in Q2 or 2013, which equates to 182.6 million Android smartphones. Samsung shipped 76 million smartphones that quarter, not all of which were Android, but the vast majority were. But, even assuming that every device from Samsung was running Android, that would only account for 41.6% of Android shipments. 

On the other side, we have a situation where Nokia is responsible for as much as 80-90% of the Windows Phone device sales, and other OEMs were already seemingly ceding the market to Nokia before Microsoft made this deal. While Windows Phone is growing quickly in some regions, most of that growth is from Nokia devices. Per the Gartner numbers, Windows Phone shipped 8.9 million devices in Q2. Nokia's earnings report for that quarter reported 7.4 million Lumia devices shipped, which amounts to 83% of all Windows Phone devices shipped for that quarter, leaving just 1.5 million non-Nokia Windows Phone handsets shipped. 

So, it's all well and good for Microsoft to say that it values its OEM partners, and loves the "innovation, diversity and scale" that they bring to Windows Phone. But, the truth of the market is that Nokia has been the major driving force, and now those devices are likely going to start carrying the Microsoft branding. The strategic partnership between Nokia and Microsoft had already been giving Nokia a huge advantage in visibility, and that advantage will only widen as Microsoft takes over. 

In the end, it may not be a matter of if you believe the industry sources, or if you believe Microsoft, because there was already very little room for competitors when Nokia was simply Microsoft's partner. Now that Nokia's mobile division will be part of Microsoft, there would need to be some big changes in how Windows Phone is handled to convince OEMs that it is worth the effort. 

51 Comments
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posted on 03 Sep 2013, 11:21 12

1. ArtSim98 (Posts: 3212; Member since: 21 Dec 2012)


At least no other companies are going to be interested in WP. I wouldn't buy a non Nokia WP device so for me WP is dead. I will go for Sony next.

posted on 03 Sep 2013, 12:35 2

24. brrunopt (Posts: 545; Member since: 15 Aug 2013)


Why ? the tipe of phone will most likely remain the same..

posted on 03 Sep 2013, 13:33 1

30. lyndon420 (Posts: 1782; Member since: 11 Jul 2012)


They may as well stop licencing it because it is too expensive and the OEM's don't care about WP anymore.

posted on 04 Sep 2013, 03:18

45. WindowsiDroid (Posts: 116; Member since: 22 Jul 2013)


So we are just same i'm not interested in WP anymore coz the Nokia Brand Name was not retained, And Sony will be my next phone.

posted on 04 Sep 2013, 04:09

47. sam.7 (Posts: 68; Member since: 10 Jul 2013)


the Nokia brand name will remain for next 10years according to the deal.

posted on 04 Sep 2013, 09:08

50. takeja (Posts: 35; Member since: 16 Aug 2013)


Exactly and more:
1) NSA back doors in all the Windows
2) blackmailing android manufacturers so Microsoft steals more money from one android phone than from poor and limited WP

posted on 03 Sep 2013, 11:23 3

2. Jeradiah3 (Posts: 1008; Member since: 11 Feb 2010)


Thats a good point. I hope not because Windows Phone will be as restrictive as iOS and look at where they are right now. We'll have to wait and see

posted on 03 Sep 2013, 11:24 13

3. McJobs (Posts: 106; Member since: 08 Jul 2012)


LUMIA > iPhone > Galaxy

posted on 03 Sep 2013, 11:55 17

15. LetsBeHonest (Posts: 982; Member since: 04 Jun 2013)


Galaxy > iPhone > MICROSOFT LUMIA

posted on 03 Sep 2013, 12:06 5

17. greathero1 (Posts: 493; Member since: 13 Jun 2008)


I like how your user name works with your post lol.

posted on 03 Sep 2013, 13:14 6

29. fanboy1974 (Posts: 1276; Member since: 12 Nov 2011)


Note 3 > Sony Z1 > LG G2 > S4 > HTC One > Note 2 > HTC mini > Droid mini > iPhone > Droid Ultra Max > LUMIA

Android is just too deep.

posted on 03 Sep 2013, 22:05 1

43. volcano (Posts: 267; Member since: 25 Jan 2013)


Lumia > iphone >>>>>>>>>>>>>>>>>>>>>>>>>>>>>> any android phone

posted on 03 Sep 2013, 12:21 2

20. NexusKoolaid (Posts: 307; Member since: 24 Oct 2011)


Recent market share numbers tell an entirely different story.

posted on 03 Sep 2013, 12:33

23. brrunopt (Posts: 545; Member since: 15 Aug 2013)


So , Acer > Apple (Laptops)

posted on 03 Sep 2013, 15:47

35. illiad (Posts: 113; Member since: 07 Feb 2012)


nope, lets correct that for you!!

Iphone > LUMIA > *any* android > galaxy ... :)
just google this,...
'bluetooth file transfer on lumia' 2000 results
Iphone? well this should help..
http://www.makeuseof.com/answers/can-i-transfer-files-via-bluetooth-on-my-iphone-4-without-jail-breaking/

posted on 03 Sep 2013, 16:11

37. Seo_Joo_Hyun (Posts: 65; Member since: 14 Jul 2013)


+1520

posted on 03 Sep 2013, 11:25 8

4. rms.max (Posts: 82; Member since: 26 Sep 2012)


whatever ..........die wp die.

posted on 03 Sep 2013, 11:31 17

5. xperiaDROID (banned) (Posts: 5629; Member since: 08 Mar 2013)


WP will die without Nokia.

posted on 03 Sep 2013, 11:40 10

8. Seo_Joo_Hyun (Posts: 65; Member since: 14 Jul 2013)


+1020

posted on 03 Sep 2013, 12:18

18. tedkord (Posts: 5130; Member since: 17 Jun 2009)


I see what you did there.

posted on 03 Sep 2013, 12:36 2

25. brrunopt (Posts: 545; Member since: 15 Aug 2013)


- 1520

posted on 03 Sep 2013, 21:58 3

42. akki20892 (Posts: 3623; Member since: 04 Feb 2013)


agree, people was, and is buying Nokia not WP........not let's see how WP survive.........!!!

posted on 04 Sep 2013, 03:20 1

46. WindowsiDroid (Posts: 116; Member since: 22 Jul 2013)


People are buying Nokia Brand not WP8 so WP8 might become dead soon.

posted on 04 Sep 2013, 08:06

49. akki20892 (Posts: 3623; Member since: 04 Feb 2013)


true.....

posted on 03 Sep 2013, 11:57 4

16. LetsBeHonest (Posts: 982; Member since: 04 Jun 2013)


One way or another Nokia dead
i hope they name just "Lumia" instead of MICROSOFT LUMIA .

posted on 03 Sep 2013, 11:34 5

6. papss (unregistered)


I'm super excited by this news.. I hope they stay on this path and create more great phones... I hope m$ doesn't cave when sissy fanboys cry over the direction they move...cough Xbox one drm cough. They had a great thing going with the family share but idiots cried and now its no more special then the ps4

posted on 03 Sep 2013, 12:29 2

22. MorePhonesThanNeeded (Posts: 645; Member since: 23 Oct 2011)


You're an idiot, the idea of paying $60 for a license to a game and leaving MS and the Pub with the ability to kill support when they wish leaving you with a coaster at best. Sure you can eat that crap up all you want. You're a special kind of individual aren't you? What makes consoles special is what exclusive games they put out, but who cares about that eh? MS has Halo and Forza and to a lesser extent Fable...hard to count on exclusives when you barely have any worth their salt isn't it.
MS can't create any thing worthwhile hardware wise, just looking at the size of the technologically immature Xbox One is enough to prove that fact(power brick outside the already massive chassis). I hope they got Nokia's hardware company to so they can do the constructing, if MS constructed phones they'd come with heat sinks as big as your head.

posted on 03 Sep 2013, 12:46 2

28. papss (unregistered)


Its cute that you need to insult be because your intellect doesn't reach higher than 3rd grade level. Grownups are talking kid, go get your diaper changed you are being fussy

posted on 03 Sep 2013, 15:04

34. VZWuser76 (Posts: 1792; Member since: 04 Mar 2010)


If everyone who insulted someone else was below the third grade, there'd be like 2 people on PA who'd be above that age. Adults insult each other all the time, like talking down to someone by calling them kid. Why not just call them skippy, slick, tiger, or sport while you're at it.

This could hurt MS, there's been a lot of ill will over the xbox stuff, & now quite possibly the Nokia name getting lost if they end up calling them MS devices.

It's kinda sad, the two greatest pioneers in mobile, Moto & Nokia both bought out, and shells of the companies they were in their heydays.

posted on 03 Sep 2013, 15:51

36. illiad (Posts: 113; Member since: 07 Feb 2012)


problem was, Nokia was killed by paranoid, stupid management - many companies are affected by this, they are too frightened to try something new, holding back any progress....

posted on 03 Sep 2013, 11:37 5

7. shy2papa (Posts: 211; Member since: 23 Jan 2010)


I was gonna get the Nokia 1020 but now hell no, Nokia is dead to me.
Sony z1 it is

posted on 03 Sep 2013, 11:42 4

10. Credo (Posts: 695; Member since: 19 Apr 2012)


Sad but true

posted on 03 Sep 2013, 22:20

44. volcano (Posts: 267; Member since: 25 Jan 2013)


thats selly excuse you buy Nokia lumia for the name or for hardware quality and innovation ? quality . innovation , developers, engineers . sales team. manufactures all of them going to join microsoft to me it doesn't change anything

i don't care if the name has microsoft or nokia brand all i care about is im getting nokia hardware quality and innovation on my phone from the same people.

posted on 03 Sep 2013, 11:41 2

9. Credo (Posts: 695; Member since: 19 Apr 2012)


I don't care about this, the only thing i care about is that Microsoft needs to hurry up EVERYTHING, they need to market device's like Samsung does, otherwise this is going to be a HUGE FAIL

posted on 03 Sep 2013, 12:23 2

21. NexusKoolaid (Posts: 307; Member since: 24 Oct 2011)


When it comes to mobile MS couldn't market their way out of a paper bag.

posted on 03 Sep 2013, 11:45

11. DaNTRoN (Posts: 135; Member since: 23 Jul 2012)


well, i have never considered a WP,so this isnt too big of a deal for me, but i probably have a 0% chance of ever seeing Nokia/Android now. Thanks MS/Elop

posted on 03 Sep 2013, 11:46

12. Googler (Posts: 813; Member since: 10 Jun 2013)


Looks like MS will get an important answer to whether people buy Lumia phones because of WP or the Nokia name on them.

For the article, wasn't HTC already pulling out of WP? The offerings from SS haven't been all that hot either so whether MS closes it or not really isn't the question, do other OEMs see validity in competing with MS is. Google has done a great job at keeping Motorola separate, time will tell if MS can do that with WP and the Lumia line.

posted on 03 Sep 2013, 11:46 2

13. ibap (Posts: 706; Member since: 09 Sep 2009)


Microsoft just thinks they want to be Google.

I haven't had a WP since they abandoned all the apps up through version 6.5 - I want Watchflag back!

posted on 05 Sep 2013, 21:15

51. qjphone (Posts: 11; Member since: 11 Mar 2013)


.so true windows mobile has gone to crap after 6.5.

posted on 03 Sep 2013, 11:50 4

14. piyath (Posts: 152; Member since: 23 Mar 2012)


If WP dies without Nokia,
Nokia will die without food... Ultimately WP will survive cuz they have food!

posted on 03 Sep 2013, 12:36

26. MorePhonesThanNeeded (Posts: 645; Member since: 23 Oct 2011)


What sense does that make? Nokia sold their smartphone business to MS and will get payments from MS for use of their patents. Nokia just got a bloody cash infusing of a $4Billion +. Nokia still owns their name and their bread and butter R&D department so they can license things out to smartphone OEM I believe.

posted on 03 Sep 2013, 18:30

39. ballaonnabudget (Posts: 34; Member since: 15 May 2013)


nope. check your facts.

posted on 03 Sep 2013, 12:18

19. InspectorGadget80 (Posts: 6689; Member since: 26 Mar 2011)


RIP Nokia. U will be missed.

posted on 03 Sep 2013, 12:39 3

27. Antonyjoseph (Posts: 215; Member since: 06 Apr 2013)


Most people bought Windows phones because they were Nokia phones. I dont think anyone would care to buy 'Microsoft' phones. I for one will totally switch to Android phones. Maybe try a Sony or HTC.

posted on 03 Sep 2013, 13:59 1

31. papss (unregistered)


True, why would any smart person by a phone based off its capabilities.. I feel as long as they allow them to produce as they have then I personally don't care. I do love nokia but only because their phones.

posted on 03 Sep 2013, 14:01 5

32. gazmatic (Posts: 628; Member since: 06 Sep 2012)


suddenly a lot of people who never bought wp are deciding that they will never buy wp

wow

i dont even know what to say

posted on 03 Sep 2013, 14:10 1

33. ady_lad (Posts: 75; Member since: 17 Jul 2013)


By the way ex-Nokia Engineers preparing to launch a phone based on Meego, it's called Jolla, Google it.

posted on 03 Sep 2013, 17:20

38. 7thspaceman (Posts: 1120; Member since: 14 Feb 2011)


Microsoft Windows smart phone OEM's always had more Andriod models on the market than
Windows smart phones and made them better than the Windows smart phones they put on the market place. i bet Samsung and HTC will make just one Windows smart phone Model and it wont be as good as their top of the Line android smart phones. The 7th spaceman has spoken"

posted on 03 Sep 2013, 18:59

40. Whateverman (Posts: 3231; Member since: 17 May 2009)


But they've never had a reason to invest in WP. When M$ decided to pay Nokia a billion dollars a year to use WP, while suing all the Android OEMs, that was a slap in the face. Sure, they gave them a little bit of a discount if those OEMs were to make a WP device, but com'on M$! You really think Samsung, HTC and others are going to put their bst efforts into a platform that people weren't buying? Not saying its bad, it just ain't attracting the customers like Android and iOS.

posted on 03 Sep 2013, 20:03

41. rusticguy (Posts: 2828; Member since: 11 Aug 2012)


M$ will write off 7 billion five years later .. didn't they do with aQuantive?
http://seekingalpha.com/article/1669112-microsoft-is-shooting-itself-in-the-foot-by-acquiring-nokia

posted on 04 Sep 2013, 04:11

48. sam.7 (Posts: 68; Member since: 10 Jul 2013)


the Nokia brand name will remain for next 10years according to the deal.

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