Editorial

Does Nokia's Z Launcher foreshadow the company becoming an Android manufacturer?

Prior to becoming an exclusive Windows Phone manufacturer, Nokia contemplated making phones with Google’s Android operating system. Eventually, the company decided against it, determining that the ecosystem wasn’t a level playing field. With the release of Nokia’s Z Launcher for Android, however, could the company revisit its decision?

Nokia finalized the sale of its devices and services group to Microsoft earlier this year, and it agreed to not release any smartphone hardware until 2016 as part of the deal. Quality smartphone hardware – hardware that isn’t simply rebranded from third-party vendors – takes significant time to develop, however, meaning Microsoft’s demand may not have been much of problem for Nokia. In the interim, there’s obviously nothing stopping Nokia from releasing Android software.

In terms of hardware, Nokia still has to build itself back up from nothing. Nokia’s deal with Microsoft sent its entire consumer hardware team to the Windows Phone developer, including the group behind the Nokia X line, a series of Android-powered smartphones currently aimed at developing markets. What remains of Nokia is largely its enterprise-focused business unit, a subsidiary called Nokia Solutions and Networks that provides networking services and telecommunications equipment, and its HERE mapping service. 

In a July 2013 interview, former Nokia CEO Stephen Elop said the company worried about “the very high risk that one hardware manufacturer could come to dominate Android.” That suspicion turned out to be prophetic, as Samsung has dominated the Android smartphone market, while Nokia went on to command 85 percent of the substantially smaller Windows Phone market thanks to hardware that was superior to its competitors.

“We had a suspicion of who it might be, because of the resources available, the vertical integration, and we were respectful of the fact that we were quite late in making that decision,” Elop said. “Many others were in that space already.”

Nokia’s relationship with Microsoft wasn’t as beneficial as the company probably would have liked in the end, as it continued to hemorrhage money before agreeing to sell its devices and services unit to Microsoft for more than $7 billion. Prior to that deal, Nokia shrewdly acquired Siemens stake in the two companies’ joint venture, the aforementioned Nokia Solutions and Networks (then known as Nokia Siemens Networks). The joint venture had been unprofitable for the two companies, but that changed the year before their sale agreement. Nokia made savvy business decisions by acquiring its joint venture with Siemens and selling its smartphone unit.

Essentially, Nokia’s fortunes turned at just the right time – it was selling an extremely unprofitable unit just after gaining a newly profitable unit.

Come 2016, Nokia will face the choice of whether it wants to reenter the smartphone market. But that decision probably doesn’t have an obvious answer, even though it may seem like the company wants to get back in the game with the release of the Z Launcher. In fact, the reality of the marketplace may actually indicate that the products Nokia was previously known for may not financially benefit the company going forward.

Android is still an uncompetitive landscape, with Samsung dominating sales despite quality hardware from competitors such as HTC, a company facing significant financial difficulties. HTC’s stock has plummeted from a high of $43 per share in 2011 to its current cost per share of $4.33. And while HTC’s struggles may not be indicative of the Android market as a whole, no other manufacturer has come close to challenging Samsung. In other words, if Nokia wants to become an Android manufacturer, the problem Elop saw before still exists: It takes tremendous resources and the necessary businesses to truly become a top-tier player.

If Nokia wants to return to the smartphone hardware market, it’s probably not going to roar back as expected. The Z Launcher is the equivalent of dipping a toe to test the waters – it certainly doesn’t mean Nokia reentering the market is a foregone conclusion. 

Images via Nokia

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27 Comments

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If Nokia were to go the android handset route in two years all they will do is prove Elop right and fail. The android market is locked down by Samsung and they will not allow that to change. Nokia may be able to steal a few crumbs from other manufacturers if their re-enter but they'll not make any waves.

They have no development team, no engineers, no factories and no supply chain anymore. All that went to MSFT and setting that up again would be too costly now. My guess is they will focus on software, but I could see them aquire Jolla and build on that. Jolla is supposed to release their next hardware in 2015 so a take over early 2016 would be well possible for a flying start. Still I believe they will not make much of a dent either way.

I'd love it if Nokia made a comeback as a top Android OEM. There's no denying that they had some compelling devices when paired with a good OS (N9).

Now that the trojan horse is gone, hopefully we can return to what Nokia does best - making great phones that people actually want to buy.

Edited by simplezz, Jun 20 2014, 4:38pm :

Nokia may not use Android at all in 2016. They might adopt Tizen as their new OS. People are sick of Android and it's lag due to some part by the Java Virtual Machine. Getting away from Java can only be a good thing.

Nahaz said,
Nokia may not use Android at all in 2016. They might adopt Tizen as their new OS.

If they've got any sense they'll try multiple options instead of going the exclusivity route. That's a sure fire way to go bankrupt or get bought out.

That being said, it doesn't hurt to go with the most popular platform from the start, then diversify once you have a solid foundation. That's the mistake they made with Windows Phone. Full Android on their hardware would sell like hotcakes.

Nahaz said,

People are sick of Android and it's lag due to some part by the Java Virtual Machine.

It wasn't the dalvik JVM or Java that was causing the perceived lag in the early days of Android, it was the fact that the compositor wasn't running at a constant fps like iOS and WP's sliverlight (flash) were at the time. Since Project Butter (Jelly Bean), that perceived lag has gone. There are still people (mostly pro-WP sites) who bemoan Android because of it irrespective of the fact that it doesn't exist any more.

Nahaz said,
Getting away from Java can only be a good thing.

That isn't going to happen. It's the most popular programming language in the world, and it's the principal language of the Android SDK, which is far and away the most popular mobile development platform.

If I'm going to write OO cross platform code, It'll either be Java or Python. C# doesn't even enter into the equation.

simplezz said,
If I'm going to write OO cross platform code, It'll either be Java or Python. C# doesn't even enter into the equation.

Really?

I'm using C# + Xamarin Studio.

simplezz said,
If I'm going to write OO cross platform code, It'll either be Java or Python. C# doesn't even enter into the equation.

How doesn't C# enter the equation when in fact that's currently the only viable language for writing native, cross platform applications with the help of Xamarin. Can you use Java to write apps for iOS or Windows Phone?

Furthermore, with the next version of .NET, Microsoft is working closely with the Mono team to ensure .NET works well on Linux and OS X as well. You will not be able to phone Microsoft for support on these platforms but Mono is becoming an official part of their continuous integration testing and will have all features as .NET on Windows.

Obry said,

How doesn't C# enter the equation when in fact that's currently the only viable language for writing native, cross platform applications with the help of Xamarin.

You're joking right? And use Mono or some other junk from Microsoft's lap dog Miguel de Icaza. No thanks. C# isn't even remotely viable. And even if it was, I don't trust Microsoft with my career given its history or behaviour. And why should we, when we have great FOSS cross platform languages already that have 100% compatibility and excellent tools. There isn't a single thing about C# that makes it attractive or viable.

Obry said,

Can you use Java to write apps for iOS or Windows Phone?

First of all, no one cares about a 3% marketshare OS. Secondly, how much does Xamarin's tools cost again? Thirdly, yes you can write iOS apps in Java: http://www.javaworld.com/artic...ava-ios-tools-compared.html

Obry said,

Furthermore, with the next version of .NET, Microsoft is working closely with the Mono team to ensure .NET works well on Linux and OS X as well.

It's too late I'm afraid. .NET is dead outside of Windows. There are far better tools available, and they aren't controlled by Microsoft.

Obry said,

You will not be able to phone Microsoft for support on these platforms but Mono is becoming an official part of their continuous integration testing and will have all features as .NET on Windows.

Good for Miguel de Icaza, I'm sure Microsoft will reward him commensurately. However, for the rest of us, we couldn't give a fig. The only mobile platform that uses it as the native SDK is Windows Phone, and that has 3% marketshare. It's irrelevant.

They already have a phone called the Nokia X, now the question is will they make another now that their buyout deal is completed.

Biglo said,
They already have a phone called the Nokia X, now the question is will they make another now that their buyout deal is completed.

The Nokia X is a Microsoft product now.

Biglo said,
They already have a phone called the Nokia X, now the question is will they make another now that their buyout deal is completed.

As Anthony said, that's a Microsoft product. The real Nokia, will be free in a couple of years to release a product again.

They'd be silly not to produce a full Android phone, including the Playstore and Google apps. I reckon they could give Samsung a run for their money given the right OS.

simplezz said,

As Anthony said, that's a Microsoft product. The real Nokia, will be free in a couple of years to release a product again.

They'd be silly not to produce a full Android phone, including the Playstore and Google apps. I reckon they could give Samsung a run for their money given the right OS.

Oh I see

I think Nokia should keep doing there thing with wp8, don't we have enough nasty ass android going around? Let scamsung and the rest keep that garbage OS, and the ransomeware that comes with it.

Unfortunately, WP just isn't financially viable for most companies. Thus why Nokia had to sell their phone division because Windows Phone exclusivity sent their profits into a nosedive.

They had the hardware, just an unpopular OS. It could be argued that had they given the N9 and Meego a real shot, that they might be in a better position right now. But Elop put an end to all WP competitors. It was an extremely flawed strategy in hindsight. And Nokia paid the ultimate price for going Microsoft exclusive.

simplezz said,
Unfortunately, WP just isn't financially viable for most companies. Thus why Nokia had to sell their phone division because Windows Phone exclusivity sent their profits into a nosedive.

They were in a nosedive before 2011 and Microsoft has reduced WP licensing costs considerably.

McKay said,
I would love a high end nokia android phone, but would prefer stock over their hideous android skin.

That skin is now Microsoft's. Let's hope they learnt their lesson and give us stock Android :)

In 2 years we will see if Nokia reenters mobile as an actual vendor. I liked Nokia but its Symbian and MeeGo devices were totally compelling. I think Nokia may be more interested in services and underlying mobile technologies which allows them to leverage their experience without the cost of being a pure hardware vendor.

I would so jump on a 10" Nokia Android tablet but only if it used "standard" Android, not the version it's using on its current phone.

A340600 said,
I would so jump on a 10" Nokia Android tablet but only if it used "standard" Android, not the version it's using on its current phone.

I'd like to see that too. Stock is where it's at :)

A340600 said,
I would so jump on a 10" Nokia Android tablet but only if it used "standard" Android, not the version it's using on its current phone.

We're now talking about two different companies now.

Nokia have no current phones.
Microsoft Mobile Oy have customized android phones.

Nope
but I welcome them to give it a go in a few years
A lot will have changed... and not for the better in terms of consumer choice
you will not see many Google approved manufacturers, they will dwindle, some phones might run Android but they will not run any google services

I doubt it. One of the big draws of Android is the Playstore and Google apps. Not only that, but vendors get code well in advance of AOSP. It's a costly and incompatible business playing catchup with GMS.