Nokia admits risk of Microsoft potentially developing its own Windows Phone device


Nokia has been Microsoft's closest Windows Phone partner since the mobile operating system launched.

In a recent risk filing by Nokia, the Finnish smartphone developer has admitted its business could be negatively impacted by Microsoft potentially developing its own Windows Phone device.

Nokia’s Form 20-F filing, released Thursday, states Microsoft could develop its own smartphone, which has been rumored in the past, following the Redmond company’s decision to create its Surface tablet line. The same filing recently noted that Nokia will eventually end up owing $650 million to Microsoft as a result of the two companies' partnership.

“Microsoft may make strategic decisions or changes that may be detrimental to us. For example, in addition to the Surface tablet, Microsoft may broaden its strategy to sell other mobile devices under its own brand, including smartphones,” the filing states. “This could lead Microsoft to focus more on their own devices and less on mobile devices of other manufacturers that operate on the Windows Phone platform, including Nokia.”

The news comes less than five months after Nokia CEO Stephen Elop said a hypothetical Microsoft-developed phone would be a “stimulant to the ecosystem.”

Nokia’s filing also lists other risks inherent in its close partnership with Microsoft, such as not being able to convince Microsoft to create “the features or functionalities for the Windows Phone platform that we deem most important.”

In fact, the document has a section solely dedicated to how Nokia’s “partnership with Microsoft is subject to risks and uncertainties,” ranging from employees simply being dissatisfied with the partnership to Microsoft’s hypothetical smartphone development.

While the news isn’t groundbreaking – Nokia is required by the U.S. Securities and Exchange Commission to provide “quantitative and qualitative disclosures about market risk” – it does go against Elop’s previous statements. As noted by ZDNet, Nokia has never cited the risk before.

Source: Nokia via ZDNet

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I expect MS to do this. This is what happened with Sega and the Dreamcast! After MS worked with them on the Dreamcast they learned all they needed to know to make and launch the Xbox. It's what they do. It is a death sentence to work with MS.

I dont see any risk to Nokia if MS made products (apart from keyboards and mice) keep selling like the Zune, Kin and Surface. No Windows Phone OEM has anything to be concerned about.

at the moment there is no need for a surface phone but in the future when the OS starting to gain more market share and when there is a room for everyone to sell windows phones i don't see why not in fact i would love to see surface phone but not at the moment this moment microsoft efforts should be focused on OS development

at the moment Microsoft need to focus on their smartphone OS more than releasing a windows phone they have a great partner on hardware side. we really need more features and apps

Yeah, Windows Phone is Nokia's lifeblood right now. And they're doing the best out of all WP manufacturers. They're also doing well on the software side. They recently made their exclusive mapping apps available to non-WP8 devices. I think that's a gesture of goodwill and I hope they do the same for any future exclusive apps.

I wish people would realize that the Nokia/Android partnership could have never happened. Google has never cared whether or not its manufacturers sink or swim. Microsoft was there to bail Nokia out because Nokia needed money, and Microsoft needed an eventual premium brand.

If anything, it's good reason for Nokia to continue their Lumia line and up their game.

If Nokia went with Android, they would be in worse situation.
They wouldn't receive any funds (from MS or any where else) to produce the phones.
They would become just another Android phones in the sea of Samsung phone.

For Microsoft's stockholders sake, MS had best get their flawed Windows-8 OS fixed before branching out into smartphones. If MS "lays another egg" with a flawed smartphone, can (and will) their installed base of Windows-7 and Office users maintain a decent income stream for a while? If so, for how long?

You can't just say something is flawed without listing the reasons. The feature set and performance is on par or even better than iOS or Android.

LookitsPuck said,
You can't just say something is flawed without listing the reasons. The feature set and performance is on par or even better than iOS or Android.
It's great but it's also flawed, just like iOS and Android. There will never be a perfect smartphone OS. In WP8, some basic things are missing like viewing the duration of previous calls, a notification centre, and the option of exiting an app in the multitasking view: http://www.neowin.net/images/u...d/5917179222_291dc2b6cc.jpg

Aside from that, the OS is really good. I found it to be smoother than Android and easier on the eyes than iOS.

Nokia doesn't need android OS that will only continue to saturate an already overly saturated market. There are only a handful of stand out phones in the Android market and everything else is also-so ran.

Nokia is Microsoft's strongest partner but they also need to get on the thin phone bandwagon. They have the screens they just need to lose the weight. MS needs to step to allow for 1080 display capability. HTC needs to take the HTC One and put WP8 on it

I had the Nokia 920 for over a month and although I love the phone features I could not tolerate the size of the device. I tried to deal with it but in the end I could not get over the size. I held the HTC Droid DNA and I like the size for a big phone and the weight. So the HTC One should even be better.

Overall the WP8 experience is a great experience but I haven't been won over by the hardware that is currently released. The HTC 8X was a better feel but not a better phone than the Lumia 920. I would like my Lumia 800 in a 4" 720 display with the curved glass. I would be happy.

Microsoft should build a phone for reference to let the other OEM's understand that being lazy or building better devices for another eco-system only begs Microsoft to build a better phone.

Why? they are pretty much selling android phones in vending machines now, everyone has like 30 different models of Android phones with little that makes them different or stand out.

I would love to see a Nokia Android personally, would be very interested in what Nokia came up with.

Until I got my HTC Desire I had always owned Nokia phones previously.

WaqasTariq said,
Nokia needs an Android phone!

Nokia needs to pull its finger out and have a windows phone, that when docked becomes a Windows 8 RT machine with external monitor, keyboard and mouse support. This itself would set it self apart and they need to do it fast, because Ubuntu's coming to android as a dock-able solution soon.

sagum said,

Nokia needs to pull its finger out and have a windows phone, that when docked becomes a Windows 8 RT machine with external monitor, keyboard and mouse support. This itself would set it self apart and they need to do it fast, because Ubuntu's coming to android as a dock-able solution soon.

Absolutely. That's what I've been saying for years now. It shouldn't even be that difficult.

At least in this case MS does not have to make their own phone like they did with Surface. the Lumia 920 is a really good flagship for WP8.

swanlee said,
At least in this case MS does not have to make their own phone like they did with Surface. the Lumia 920 is a really good flagship for WP8.

Microsoft could just partner with Nokia and have Nokia manufacture the Surface phone.

I think its simply too bulky to be a flagship phone. Not a single one competes well with the iPhone from a hardware standpoint and that was one of the reasons MS had to do their slate internally. Samsung filled that hole in WP7 but are MIA on WP8.

I'd buy a Surface phone in a heartbeat, regardless of who MS tasks with production.

rfirth said,

Microsoft could just partner with Nokia and have Nokia manufacture the Surface phone.

That's what I was thinking they should do.

Dashel said,
I think its simply too bulky to be a flagship phone. Not a single one competes well with the iPhone from a hardware standpoint and that was one of the reasons MS had to do their slate internally. Samsung filled that hole in WP7 but are MIA on WP8.

I'd buy a Surface phone in a heartbeat, regardless of who MS tasks with production.


So the only requirement for a flagship is to be less bulky than the iphone? OIS, wireless charging, 120mhz refresh rate, 32GB, super sensitive screen are not enough to be regarded as a flagship? Cool story, bro.

No but that should be the target, not the oversized droid market. You see a flagship defined by features, while Apple rightly saw it defined by polish and quality design. Surface is MS's ode to Apple so their devices should share that philosophy to create a true flagship.

Dashel said,
I think its simply too bulky to be a flagship phone. Not a single one competes well with the iPhone from a hardware standpoint and that was one of the reasons MS had to do their slate internally. Samsung filled that hole in WP7 but are MIA on WP8.

I'd buy a Surface phone in a heartbeat, regardless of who MS tasks with production.


If it is too bulky for you, you probably have a baby's hand.

In face, when you hold L920 on one hand and GS3/iP5 etc on other, L920 feels much more comfortable to hold.

I'd take superior display (esp the refresh rate/sensitive touch) and a great camera over a super thin phone.

btw, L920's body polish/quality is on par/better than other things currently on market.

id still buy a nokia phone cus there probably the toughest phone known to man, i dont htink a MS surface phone would achieve much market penetration compared to nokias devices tbh and they cant sacrifice on features cus there built into the OS and if they purposely stop features working on other devices than MS's then 1. there going get slapped with a massive anti-trust fine across the globe and also potentially hurt the sales of competing wp products, slowing adoption lose more ground to android and iOS. so it doesnt make any sense why theyd do that. also nokia drive if bloody awesome, for a free gps navigation software you cant beat it.

Nokias are indeed tough, but I have had issues with my 920. The polycarbonate shell creaks a lot and is distracting to those I'm on the phone with. It's a known issue. It's annoying and makes my phone seem cheap. Nokia really has to get their manufacturing tolerances and testing at a much higher level.

psionicinversion said,
id still buy a nokia phone cus there probably the toughest phone known to man, i dont htink a MS surface phone would achieve much market penetration compared to nokias devices tbh and they cant sacrifice on features cus there built into the OS and if they purposely stop features working on other devices than MS's then 1. there going get slapped with a massive anti-trust fine across the globe and also potentially hurt the sales of competing wp products, slowing adoption lose more ground to android and iOS. so it doesnt make any sense why theyd do that. also nokia drive if bloody awesome, for a free gps navigation software you cant beat it.

A MS Surface smartphone using Windows Update and no need to go through OEMs n carriers validation is something I would buy immediately... And pay a premium price for it too.

petrolly said,
Nokias are indeed tough, but I have had issues with my 920. The polycarbonate shell creaks a lot and is distracting to those I'm on the phone with. It's a known issue. It's annoying and makes my phone seem cheap. Nokia really has to get their manufacturing tolerances and testing at a much higher level.

Only happens to faulty phone. Get a replacement.