11 February 2011

1 + 1 = 2? Nokia and Microsoft Better Hope Not

There's a lot of topical interest in the decision by Nokia and Microsoft to form a partnership around Windows Phone 7.

From a UK perspective, quite a lot of attention has been given to the market shares, as reported by comScore (original Data Gem here). I've reproduced their chart below (my estimates of their numbers, reading quite carefully from the graph).

Separate.png

Obviously, it is anything but automatic that when two companies combine the result will resemble a simple sum of their pre-combined market shares. But health warnings apart, it's interesting to see what happens if you do just add them.

Combined.png

Unsurprisingly, it doesn't look any better.

Is the Nokia-Microsoft partnership a good move? Who knows? From my perspective, it looks unambiguously positive for Microsoft, but far less clear for Nokia. I think Stephen Elop's memo suggests he has diagnosed the problems Nokia faces rather accurately; whether embracing Microsoft is a way out is much more open question. It will be very sad, both for Finland and for Europe, if Nokia dies. As a long-time Nokia fan, it took the iPhone to persuade me to buy a non-Nokia phone, and I'll personally be very sad if the company does fail. But I have to say, embracing Microsoft is not a way to win me back.

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A friend of mine, who happens to be an engineer at Nokia, said to me this morning "Two turkeys don't make an eagle"...

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