Nokia Doc Outlines Risks of Microsoft Deal, Including Possibility of Surface Phones
As we were just talking about, Nokia has a pretty sweet deal with Microsoft that, for the moment at least, has let the company sell Windows Phone smartphones while Microsoft compensates Nokia for its royalty fees. That won’t last forever, sure, but it’s proven to be a nice cushion for this period of adjustment for Nokia. Even still, this partnership isn’t without its risks, and Nokia just spelled-out a whole mess of them in a recent SEC filing.
Now, you shouldn’t take any of these as a warning that Nokia expects them to happen; it’s merely disclosing all the possibilities it could imagine coming to pass. Some of it’s pretty darn bleak, with statements like “we may not be able to make Nokia products with Windows Phone a competitive choice for consumers unless the Windows Phone ecosystem becomes a competitive and profitable global ecosystem that achieves sufficient scale, value and attractiveness to relevant market participants.”
As for the deal with Microsoft itself, Nokia has its own share of fears, including:
“Microsoft could provide better support to another device manufacturer which produces devices that run on the Windows Phone platform.”
“…if Microsoft reduces investment in that operating system or discontinues it, our smartphone strategy would be directly negatively affected by such acts.”
And the one we’ve all been thinking about, “in addition to the Surface tablet, Microsoft may broaden its strategy to sell other mobile devices under its own brand, including smartphones. 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.”
Again, none of this is to say that Nokia expects this to happen, but it’s still nice to know that we’re not the only ones who have been wondering about what effect a Microsoft phone could have on the WP ecosystem.