After Peter, Nokia CEO Stephen Elop took the stage and gave an interesting talk about the future of both Nokia and to discuss their relationship with Qualcomm. Stephen began by acknowledging that just a short time ago, it would have been extremely odd for the Nokia and Qualcomm CEOs to take the stage together - alluding directly to a time when Nokia and Qualcomm were in a heated patent scuffle. With that settled and a commitment to Windows Phone 7 on the horizon, the two have begun a close relationship.

One of the most interesting things out of Stephen's keynote is his perspective on the present state of the mobile industry, and the fundamental shift that has taken place. The competition has changed from a battle between devices that lived in isolation, to a battle between disparate ecosystems. Stephen called out the ecosystem battle between iOS and Android specifically. Stephen claims that Apple's closed ecosystem created vacuum that gave rise to Android.

The boxes in the illustration are metaphors for how open each platform is, though he took a not so subtle jab at Google by noting that the flaps on Android's box remain there, and remain open, but the question is for how long. 

Nokia assessed its current state of affairs in both Symbian and MeeGo. It decided that the Symbian codebase had grown too "fragile and crufty" and posed a significant engineering challenge to fix. According to Stephen, patches and updates to the platform to add features necessary to make it competitive again were taking longer and longer to stabilize, and as a result the decision was made to abandon the platform. The story of Nokia's abandonment of Symbian isn't really one we need to go over, but it's clear that the reasons were both timeline, and the engineering challenge posed by the existing codebase.

The next assessment was MeeGo, which it jointly had worked on with Intel. A similar assessment took place, and Nokia decided that with MeeGo it could not quickly enough create a portfolio of devices and price points fast enough. MeeGo, which forked from Maemo and combined with Intel's Moblin, had a focus on the high end, and enough of a rapid portability to the mass market devices that Nokia sells in volume around the world. 

The next critical assessment was Android. Nokia has reiterated a number of times that it felt entering the Android fray was akin to "giving in" and would not offer enough opportunity for differentiation. In addition, Stephen noted that while other companies have focused on multiple smartphone platforms at the same time, for most, Android has become the most dominant. The example Stephen gave is that manufacturers have kept Android hardware competitive constantly with the latest SoCs and cellular basebands, while leaving WP7 a less competitive arena. Moreover, the Android ecosystem is established just as much as Apple's, and jumping into a crowded environment could make it hard for Nokia to distinguish itself.

The obvious next step was to assess Microsoft, in which Nokia found similar scale, and complimentary strengths and weaknesses. Nokia needed software to fix all of its problems, and Microsoft needed class leading hardware to back it. Stephen feels that the two of them together have the opportunity to make a brand new ecosystem focused around Windows Phone 7, and going forward the Windows 8 multiplatform (PC, tablet, smartphone) combination. In addition, they found that Microsoft was willing to let Nokia differentiate and improve WP7 however necessary. It will be interesting to see just how much liberty Microsoft truly affords Nokia. 

Stephen then outlined five major principles it needs to nail to build a brand new ecosystem. 

The first is that the product must delight consumers. This is something we've identified a number of times in our WP7 device reviews, that Nokia's hardware quality paired with WP7's software experience could make a compelling package. Stephen used the example of the Nokia N8's class leading camera optics, and again compared with the fact that most phone vendors are putting the most engineering talent behind Android phones rather than WP7 devices. 

Nokia will focus on and deliver the absolute best WP7 handsets since it will be its only focus, and as a result it feels it can easily differentiate itself from other hardware makers also creating WP7 devices. 

Next up is that it must complete the WP7 ecosystem and compete as one against iOS and Android, rather than as a battle of handset versus handset. The goal is to work together with both Microsoft and carriers to flesh out all the required pieces for delivering a complete experience.

One of the most notable things about this slide is that Qualcomm is called out specifically under chipset support, which possibly puts to rest the rumor that Nokia will be using ST-E SoCs in its WP7 devices. Yesterday Qualcomm chose its words carefully and claimed it was "currently" the exclusive WP7 SoC vendor.

The third principle is to appeal to the operators. In the US and Europe, a very small number of operators have overwhelming control of the mobile landscape, however in Russia, India, and China operators have less of a role, though one that's growing

To succeed and see widespread adoption, Nokia must be the most appealing platform from an operator perspective, by offering things like customization, monetization streams through carrier billing, and sound network management. 

The fourth is to broaden and expand the ecosystem after fleshing out all the services that need to be in place from step 2. This is about the future, and having a platform that is ready to embrace the future of the mobile revolution. Stephen talked specifically about how the tablet market is in flux, and that Nokia will not enter the tablet market until it can offer something completely different and unique from what's available in iOS and Android.

Most notably, he referred to recent announcements about Windows 8 running on both tablets and the desktop as being a way for Nokia to enter the tablet space. A Windows 8 Nokia tablet certainly sounds interesting. 

The fifth and final principle is the developer community. I'm not sure why it's last on that list, or whether that means anything, but having developer support is fundamental to a successful platform. Microsoft gets this and has shown it in WP7 by releasing more APIs in Mango, but Nokia wants even more. To succeed, Nokia needs to make WP7 the most compelling environment for application development. Analytics tools, developer tools, no fee developer registration, a single developer portal, and such are all part of the plan. 

Nokia believes it can disrupt the mobile ecosystem, but to truly do so it must meet all these principles and jointly make WP7 the most attractive platform for customers, developers, and operators. Nokia has its work cut out for it, but it definitely seems like Stephen is ready to hit the ground running. 

Stay tuned for more from Uplinq. 

Keynote 1: HTC CEO Peter Chou
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  • R3MF - Thursday, June 2, 2011 - link

    this WP7 business is lovely i'm sure, but i want one thing from Nokia and that is a Meego phone.
  • Penti - Friday, June 3, 2011 - link

    Sorry Finland too, but Elop and Microsoft just destroyed Nokia and every single engineering and manufacturing job along with it. It's clearly not a technical reason to drop Symbian/Qt/MeeGo. But they manage to destroy themselves and all their credibility by doing so.

    WP7 can never sell the 110 million or so devices that Symbian sold last year, it can never replace Nokia's dumphone lineup. It can never do anything except not earn them any money at all. It's a falls choice that is portrayed here. You could say it's simply to rob Nokia of it's billions of investment in Navteq and it's efforts creating Ovi Maps, because that's the only thing Microsoft really gets from it.

    Elop has even managed to destroy Nokia on the hardware side ruining all their partnerships for next gen platforms. Downsizing a company to make it take losses rather then the other way around is just plain stupid.

    Nokia could take some qualcomm chips and ship some Mango-phones but they will never sell more then 20 million of them so what is really the point at all. Common it's a great platform ones they finish Mango and gets everything rolling but it's not a mass platform. It's simply wrong for a company like Nokia. Sorry but Elop isn't ready for anything. The vision for three platforms with Microsoft being the largest on smart phones is just delusion. Nokia needed the developers to continue, their UI to be finished so they can get along with a new (updated) branding of themselves and the new platforms on ST-E to be released, not kill themselves. What will happened with the excess capacity of 100 - 200 million devices that will build up now? Will you just destroy those billions in investment? Looks like it. Nokia needed Symbian and MeeGo jointly running their Qt environment, that was an platform that could reach several hundred millions devices and stuff like Ovi maps did distinguish themselves from the competition. It's not a matter of old and new, the legacy software framework from the S60 days was already legacy on Symbian with new apps being built in new tools and new framework. The kernel it self is certainly more flexible then Microsoft have shown WP to be any how, and it's a fairly slim nanokernel realtime OS. Certainly not a lot of legacy to be dealt with and the OS that was driving the Qt/QtMobility development. Certainly an interesting platform that together with MeeGo could have run on devices from 60 Euro to 600 Euro. Nokia certainly did not look anything like the failed companies of Motorola or Sony-Ericsson with UIQ and Motomagx. It was moving along and was profitable. The mobile wing held their network business afloat actually. But they rapidly replaced S40 devices with Symbian and now they have no platform to fill the void, their only option is to massively downsize the company to something like 1/3 of what it was. Tablets and other stuff that won't sell won't help them.
  • FrederickL - Friday, June 3, 2011 - link

    It is fascinating to see any thread on the subject of Nokia and MS here at Anandtech or indeed any of the other popular tech-sites. There is always, without exception, a group of "contributors" who log on to tell all the rest of us, at length, how this partnership is certain to be an unmitigated disaster. The degree of malevolence we often see in such postings is so obvious that it is a wonder that these people think they are going to convince anyone when it is very clear that they are talking about want they *want* to happen, not what they genuinely believe *will* happen. Whilst I agree wholeheartedly with anyone who says that Nokia have taken a big gamble, anyone who claims that they "know" what the likely result will be is just serving up a load of bs. Whilst it could certainly go horribly wrong for the Finns it *could* go right for them. There is a genuine business logic to the alliance - though it of course remains to be seen whether it actually will work. I wish them well, (I run a Desire Z and am very pleased with it and have no immediate ambitions to rush out and buy a "Nokiasoft" when they become available) - it is in all our interests regardless of which phone we choose to buy that there is as much diversity and competition in the marketplace as possible.
  • jamyryals - Friday, June 3, 2011 - link

    I enjoyed this well reasoned comment without all the FUD.
  • Penti - Friday, June 3, 2011 - link

    Well it's still a choice not a gamble a choice to dismantle most of the business.

    WP simply can't sell 100 million Nokia devices next year and everything below it means big changes for Nokia. Not just for the software developers but for the engineers and technicians and all who work on the hardware and manufacturing and related parts of the company. It's simply set up not to be a success. Not in that regard at least. For Microsoft a success is 20-30 million devices under next year though. So you do have to separate those things. And the products will still be great in of it self even if nobody can really live on them from the handset makers perspective. Microsoft gains Nokia's map and navigation technology but that is certainly not paid for in full by Microsoft to begin with so how would that help the other part of the partnership. Nokia still could be alive as a brand, but not much more then that after a few years of this. It's a massive change to the industry. Microsoft's other competitors will be the ones contributing most from it too. Microsoft doesn't take over the market by just removing some of the competition. Which they of course know.

    Change in the business is however good, but this time it's clear it's about downsizing a company to save it from seizing to exist thanks to the change in strategy before they failed with their own tech. It also means any mobile OS development outside of North America is dead. So you can't be all positive about them going exclusive and revamping their previous profitable business, which wasn't stagnant, it's simply a lie if you insinuate that it will be more successful from the companies perspective with selling a few million WP devices. The company will have a much smaller turnover, have to fire the majority of it's employees and have to give up and write off billions of investments in manufacturing facilities and so on. It could give some to the shareholders eventually (it's undervalued today so the stock price might suit the new company). But it's hardly the shareholders choice, and that would be years off and with years of losses before. Those investments simply wont go up in smoke with no consequences. It's simply not a magic move that will make the shareholders a lot of money.

    It will be a though job to make the New Nokia profitable and it will be a totally different company doing totally different things. And it means Nokia will shrink and soon be surpassed by Samsung as worlds largest terminal manufacturer. You might be fine with all that, and Nokia simply won't go under and disappear but it will be something different. Might need even bigger restructure then even I could imagine. And it's challenges will be more then the success of Windows Phone. Nokia will never be making 40 Billion EUR on Windows Phone they will not even be ever making 10 Billion EUR. Downsizing is simply not about that it could go horrible wrong it's a god damn reality if they are successful. That is not the disaster that is the success. The success would be making a company with a lot less employees, about zero software developers in Finland and so on. But the complete failure a bankruptcy of Nokia would probably be better for the finns. Simply downsizing and restructuring means none of the assets will be left. Nokia as a brand particularly in the states might be a success, but it would be the same way Motorola is a success. Not by being a strong company which can steer development and innovate. It's simply boring just seeing empty companies that's nothing but a brand. If you dead set on seeing a few million high quality WP devices in the states I could see the draw for that though. But in Europe we don't want the be like Motorola or Sony-Ericsson really. SE is just seen as a big pain. The future outlook does indeed not look great when most of the market is gone from a company, and for certain that's what Nokia is accomplishing by fudding Symbian, MeeGo and so on. We have already seen this from other companies. It's not what the critics of the way the deal was handled accomplish. You can wish all you want but Elop has already stated that he will in fact restructure the company and let many many more go.
  • Penti - Friday, June 3, 2011 - link

    Sorry for long post.
  • softdrinkviking - Friday, June 3, 2011 - link

    i hope HTC can see sense for what it really is.

    the nokia stuff sounds good, but i wonder how long it's going to take to actually see a phone? if they come out with one of those cool sliders with the hardware keyboard, but with a decent screen and WP7, that'll be a solid phone.
  • vision33r - Friday, June 3, 2011 - link

    What gets me about this speech is that HTC is promoting HTC Sense to steer people towards their UI as being more than just a skin but additional layers of programming API that can be used to enhance software.

    This is all great but it means developers would have to forget general Android compatibility and just stick with HTC Dev API compatibility.

    Fragmentation is bad and this will introduce more applications that don't work or look right on other Android devices.

    It's already bad today that many apps that I download have to be deleted and refunded because they don't work properly and there's no compatibility spec on Android market.
  • FREEPAT75014 - Sunday, June 5, 2011 - link

    I own a Nokia N95 8GB for a few years in Europe. This was my 1st and will be my last Nokia experience, waiting for HTC EVO 3D to be available here to move to Androïd.
    I will never forgive Nokia not making their N95 8GB Flagship work "basically" in that many years, despite multiple firmwares up-dates that solved nothing, and erased all my copy-protection music keys each time, like badly educated rippers.
    Key point is I lost 4 points on my driving licence because of Nokia voice recognition never worked. I had a Sony Ericsson V800 3G phone before, was Symbian too, and voice recognition was perfectly working. Was basic, you could record a voice stream for every phone number recorded for every contact in your list, and it could just recognize when you say same stream again, with 99% accurancy. So OS was not the issue, iddue was Nokia implementation of that OS. On N95 8GB, no way to record any stream, phone is supposed to be so intelligent that it does not need needs that, as he could recognize anything on the fly....but in fact recognizes NOTHING with me. None of my familly names, nothing not even "home" put in English. Never mind you try the voice recognition on the phone or on the hands free car devices, this device could not get anything. And since that was never corrected in so many years, only explanation I have is that Nokia Execs never used their own Smartphones themselves. How could they have tolerated that otherwise ?
    2nd key point was that while Lotus Notes support had been marketed by Nokia, when that phone was announced, they did not follow up with that, and when Notes moved to V8 everything stopped working. No calendar, no contacts replication any more = Death. And since that I could not find a way to reconnect that with all new SW discussed in forums.
    Not only I think that Nokia could not developpe an OS themselves, but they could not even implement a good one on thier "best hardware" handsets. Not sure we should expect any progress with MW OS implementation. Since the best HW is useless without a good SW implementation, they will never count me a customer again, till they may solve that.
  • sviola - Monday, June 6, 2011 - link

    Well, so far WP7 is a good OS and with the Mango update it will be on par with iOS and Android. Coupled with Nokia's great hardware it should be an excellent option.

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