How Nokia and Microsoft Can Save Each Other and Win in the Smartphone Market

Much has been written about the Microsoft-Nokia partnership and the dismal market performance of Windows Phone 7 (interesting reaction here).

And though many pundits view Microsoft’s mobile platform as an inevitable failure, I honestly believe that it’s not too late for these companies to reinvent the “smart-gadgets” market rather than piggyback on it. Here’s why.

A couple of weeks ago, I was recalling 2007 and my reaction when I first saw the iPhone. I was still living in Brazil and had been a loyal user of Nokia’s feature phones for nearly a decade. Honestly, although I thought the iPhone and its multi-touch interface was something almost supernatural at that time, I thought that it was awkwardly brick-sized to be carried around. Once I actually used it for longer than a few minutes, however, I was completely sold and I couldn’t imagine my life again without a smartphone. The internet was finally at my fingertips wherever I went.

Four years later, virtually every smartphone on earth follows the form factor pioneered by the iPhone. There appears to be a consensus that a bigger screen is better if you want to have a great experience while watching a video, browsing the web, answering emails, playing games, using any of your favorite apps and maybe even making calls.

It’s very hard to imagine, especially here in the USA, that feature phones like the ones manufactured by Nokia still comprise the majority of the market, as seen in this interesting chart above made famous in the news as the “blue ocean” of the mobile market.

Even in the most remote areas of the globe people are demanding smartphones, and a full transition from feature phones is inevitable. While this process is accelerating, and there is a clear growing dominance of Android-powered devices, it is still hard to predict 1) what will emerge as the most popular form factor and 2) what the relative market share between iOS, Android and Windows Phone will be in the years to come. Should we assume no other disrupting approach to phones is going to appear in the next years?

Microsoft recently published their vision for the “future of productivity”[1] where mobility, of course, takes center stage. The video below received almost 3 million views. The comments were very positive, and people clearly got excited about what they saw.

It makes life appear simplified and intuitive, right? Well, not to me. I felt something weird when I saw this video for the first time and it wasn’t until I took a second look at it, that I realized this future full of augmented reality and multi-touch displays are actually only a revamped version of our present. And, by the way, the brick-sized components are still there, only thinner. If this is what the future holds for us, we should be disappointed.

A few days later, while searching for Microsoft’s video repercussions, I stumbled upon this great internet article called “a brief rant on the future of interaction design”. Not surprisingly, the author quickly asserts that “this vision [referring to Microsoft video], from an interaction perspective, is not visionary. It’s a timid increment from the status quo, and the status quo, from an interaction perspective, is actually rather terrible.” Bingo! The author also believes Microsoft’s vision ultimately ignores our human needs to amplify our natural capabilities in intuitive ways. It’s also points out that the most critical piece of our interaction in the future will continue to be our hands.

Wouldn’t it be more reasonable to expect that in the future our phones will directly or indirectly extend our ability to see, perceive, synthetize, contextualize, etc. by intuitive manipulation of something that feels comfortable in our hands? I believe that these ultra-smart devices are on their way to existence. Inevitable advances in hardware and software are going to make them a reality in a couple of years.

When I decided to check Nokia out, I was surprised to find their vision of the future:

This video blew me away, because I immediately recognized the shape used for the concept: it’s the same found in the acheulean bifaces, an ancient tool mankind carved from stones during the early phases of human evolution. Those pear-shaped hand axes were used as the primary tool for hunting, cutting animal fur, carving other tools and many other uses, and for extending human abilities in the most intuitive way: they were the first tools we could imagine to perfectly fit our hands.

The fact that Nokia envisions a gadget that not only fits our hands, but also extends our sensorial capabilities is a very welcome breath of fresh air. Nokia entered the phone business in the early eighties while Microsoft was creating the early versions of Windows. Their expertise in hardware and software, and the accumulated knowledge about the audience they cater to, are going to be critical factors cultivating the partnership they firmed this year and making it successful.

The recent news about Samsung not upgrading Galaxy S phones’ OS to Android 4.0 may have come as a surprise to most of its 10 million users, but it’s not entirely surprising, because those products (the hardware by Samsung, the software by Google) are not moving in consonance. This puts in perspective the great opportunity Nokia and Microsoft have to make things right for consumers.

Despite the fact many people and analysts believe the partnership between Microsoft and Nokia might have come too late into the game and that it is obvious that Windows Phone is a belated product (almost 3 years after the iPhone), I think that by combining their strengths in the right way, they can move faster to a new, disruptive model of smartphones that can cause something similar to what the iPhone caused in 2007. This may eventually lead to significant headway and market share, when smartphones finally conquer the “blue ocean”.

[1] In 2009 Microsoft posted a similar video ( for their vision for the future of productivity. They seem to be really obsessed with the idea that we want paper to be interactive.

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