As the acquisition of Nokia by Microsoft is coming through, Nokia has converted most of its product line to Windows Phone. The strategy behind this acquisition by Microsoft was to test whether Microsoft wanted to own make its own devices. A business model similar to what Apple has been implementing: successful Integration of the hardware and software design.
Nokia recently announced 3 new phones at Mobile congress event in Barcelona; Nokia X, Nokia X+, and Nokia XL. These phones use a tweaked version of Android open source project (AOS) giving it a feel of the Windows OS interface which is contrary to what Microsoft expects from Nokia just before the deal.
The release of the phone before Nokia sells its handset business to Microsoft in a $7.2 billion deal is an attempt to stay relevant in emerging markets, where low-cost Android phones are bought by millions of buyers. Nokia is caught in an awkward situation - committed to using Microsoft's Windows Phone software but forced to use Android software to reach more cost-sensitive customers. This move is not only the acceptance of defeat by Nokia on its Symbian software long gone as expected but also a much bigger defeat to Microsoft on its late realization of not implementing Android OS. Nokia rejected Android three years ago, when it tied up with Microsoft's Windows Phone. But recent announcement shows it has quietly been working on an open Android device for months. The open version of Android software means that the new Nokia phone does not rely on Google's services and access to the Google Play app store. Instead, Nokia is providing with its own set of services such as music, map offers, and Microsoft's email, cloud, messaging and search service.
“From the mobile user point of view, the benefit of a Nokia handset built atop Android is of course accessibility to the Android app ecosystem which has close to one million apps but not via the mainstream Google Play gateway. Nokia X users get access to apps from a Nokia Android app store, and via any other third party Android app stores they choose to enter into. Nokia’s low end mobile platform could never compete with the app numbers in Android nor could Windows phone mobile platform. This innovative capability would give a better leverage for the users to switch to using Windows phone that rest on the Android interface. Nokia, once a market leader in most of the price segment looks like it has made the strategy with the best usage of its resources and in a long run try to gain a core competency that would once again make it a winner” - Raghavender Sridhar( MDI, Gurgaon).
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