Nokia Pre-Announcement Analysis

Nokia has had quite the roiling lately. Some facts, speculation, some fiction. A new CEO who is taking the company in a new direction. Possible adoptation of Windows Phone 7 as an operating system, and rumors they are giving up their old systems.

There is a pretty solid line of what is true and what isn't, and the things that are not true do not matter. First-A new CEO Stephen Elop. He replaced an old CEO who had a plan, that plan did not go away. Stephen is not going to start from scratch. That would be suicide to his career, and unless he is being paid millions by Microsoft to flush Nokia to get Microsoft ahead (Not likely at all), Stephen has one choice to continue the strategy that was already there. Dont get me wrong, he is adding to this strategy, which we will get to in a momment, but Stephen cannot stop the boat, only turn it. This means Nokia WILL develop and release MeeGo with Intel. There WILL be a phone using Medfield and a tablet using the same. Symbian will be updated.

Now how things will change. Collaboration, innovation and speed are obvious. Nokia spends more on research that any other phone company and yet does not use the majority of it. That will change. Time to market will change, no longer will it take a year to produce and release, but about 3 months between releases. This means Nokia employees will be required to work longer days, and management is going to shaken until they are pushing their employees and internal structure will change until everyone is working together, which gives us the rumors of potential firing and hiring

Now lets touch on the Window Phone 7/Android rumor. If Stephen decides to use one of these operating systems, Stephen comes from Microsoft and is on good terms with Microsoft, so it WILL be Windows Phone 7(WP7) if anything. That being said using WP7 for the US market makes sense, but doesnt make sense as the only operating system. WP7 (&8) have mindshare in the US and Microsoft will be willing to help finance some of the promotional cost adding to that mindshare for almost free for Nokia. Mean while Intel will not allow WP7 or 8 to be used with their processor because they are not high proformance optimized (excellent article on this at http://www.anandtech.com/show/3697/intel-alleges-windows-phone-7-not-optimized-for-high-performance-wont-support-it)
This means that MeeGo is at this point one of two options (Android being the other) that can use Medfield. (One important note here Android COULD be adopted as a temporary Medfield alternative if MeeGo has developed more slowly than the Medfield Android version. MeeGo will eventually win here according to the Anandtech article, but Android could buy time.)

So Nokia will develop MeeGo for the high end world market, slowly phasing development of Symbian down to a minor recurring cost as MeeGo adoptation grows on the high end and Symbian will move to replace Nokia's current low end feature phones. Mean while in the states Microsoft and Nokia will be promoting each other gaining mind share and market share much as Motorola, Verizon, and Google did with the original Droid. Once WP7 becomes big, other manufactures will start adopting and pushing WP7 at which point Nokia is hoping MeeGo will be gaining traction in the states and worldwide due to Medfield, bringing companies to MeeGo in order to get Medfield and starting just a little bit of history repeating.

By starting on adopting Medfield and MeeGo a year ago Nokia has gained a huge future advantage. Intel is extremely good at iterating processors once they get started. They rarely inovate processors(factories they definately do), but Intel dominates when they follow. Intel also has alot riding on Medfield's sucess and I are certainly doing everything they can to allow it to dominate and stay there.

The unknows (at least to me). HP and Palm have excellent phone software, but so far boring hardware and no mindshare, that could change if HP is working on adopting Medfield. IOS could aleady be moving to using Medfield which would potentially remove Nokia's headstart, and place Nokia behind. And last, but greatest, Nokia needs to be in front of the Medfield wave, not on it. Next generation ARM processors (everything after the tegra 2) are better than first generation Medfield processors in power consumption and speed, so a 1st gen medfield device is needed today, and next gen if not today, then before the end of the year.

Here is to hoping Stephen's can surf the front of the wave. If you havent read it yet check out http://thefeuchts.com/Stocks.aspx and watch the video on Nokia's vision of the future. IT IS THE FUTURE.