Nokia Smartphones Choosing Android over Microsoft to Avoid Bankruptcy?

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Nokia recently announced that will be looking to Google’s Android mobile operating system for the new Nokia X family of smartphones, rather than Microsoft’s Windows phone, a move that to some might be a move to avoid bankruptcy. Since the company is preparing to be parented by Microsoft, this has become the source of some debate. The strategy has by some been loosely labeled a leap of hope to advance in the low-cost smart phone market, a market considered highly dynamic by many experts. The Apple iPhone, Samsung Galaxy, Google Nexus, Sony, LG and HTC, are among the newcomer Nokia X’s rivals.

The first models reported to be released are the Nokia X, X+ and XL, featuring an open version of Google’s Android software, a mobile software system that some say has become the most popular software for smartphones worldwide. Hundreds of millions of consumers are reported to be snapping up the popular low-cost Android phones worldwide. The release of the new Nokia phones is reported to be just days before closing a $7.2 billion deal, selling its handset business to giant Microsoft, for which Nokia CEO Stephen Elop has worked for in the past, according to sources.

The market has, according to Elop, shifted dramatically, with the sub-$100 segment predicted to grow about four times faster than the more expensive phones, a concern Nokia needed to address. At the Mobile World Congress trade fair recently held in Barcelona, Elop attended a press conference and spoke out on the topic. He’s quoted to have told the attending media representatives that this move would introduce the next billion consumers to Microsoft’s services and Nokia’s hardware, rather than a course of action to dismiss Windows Phone for smartphones.

In a further statement, Nokia said they envision the X family of smartphones to be complementary to the Lumia, powered by Windows Phone, in a more affordable prize range, and as the Lumia pushes lower and lower, the aim is for Nokia X to be pushing even lower than that.

According to opinion, this strategy shift is said to underline a series of missteps made by the company dating back to 2007, when the groundbreaking iPhone was released by Apple. Ben Wood, head of research at CCS Insight, said that to reach the more cost-sensitive market, Nokia needed Android software, while being committed to Windows Phone, and thus caught between a rock and a hard place. He further stressed that it was almost an admission of failure for the company to switch to Android and thus step a way from the original operating system created by a soon-to-be parent company.

When the question of of whether this is an effort to save the financial situation of the company on the market or potentially an effort to avoid bankruptcy, spokesman Mark Durrant responded with a reference to Elop’s words in their press release, adding, “The plans for Microsoft to acquire substantially all of the Nokia Devices & Services business, which we announced on September 3, 2013, are still in progress, with the transaction expected to close during Q1 2014, subject to regulatory approval and other closing conditions.“

According to Strategy Analytics, a market research firm, the global shipments of smartphones rose to nearly 1 billion units in 2013, where the top 3 shipments were made by:

Android powered phones from various handset manufacturers:

781.2 million units

Apple:

153.4 million units

Microsoft Windows Phone platform:

35.7 million units

Reported to have faced some rough numbers in the past years and by some even predicted to face bankruptcy, Nokia aims to offer both Android and Microsoft for their smartphones. The Finnish mobile phone manufacturer and often labeled innovator will soon be offering the X family of smartphones empowered by Google’s Android system, while the Lumia will continue offering the Windows Phone system as Nokia moves forward with two systems, challenging a line of rivals, including the Apple iPhone, Samsung Galaxy, Sony, LG, HTC and others.

By Halldor Fannar Sigurgeirsson

Sources:

Reuters

Business Insider

Businessweek

Nokia Annual Report 2012

Nokia Interim Report Q4 2012

BBC

Nokia’s Press Release

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