Nokia: A Microsoft Surface Phone Could Screw Us

Published on March 13, 2013
by John Paczkowski

No one knows for sure yet if Microsoft is developing its own Windows 8 smartphone, but some of the company’s handset manufacturers clearly fear that it might. One in particular: Nokia.

Nokia bet the farm on Windows Phone back in 2011, committing to a broad partnership under which Microsoft’s mobile OS would be its primary smartphone strategy. Two years later, it continues to struggle toward what has so far been an elusive recovery. So it’s understandable that the Finnish handset maker might worry that Microsoft’s foray into the tablet world with Surface might herald a similar “exploratory” jaunt into the smartphone market. And, according to Nokia’s latest 6-K filing with the Securities and Exchange Commission, that is a very real fear.

Among the multitude of Microsoft-related uncertainties listed in the “Risk Factors” portion of Nokia’s 20-F is this one, helpfully flagged by Business Insider:

“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. 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.”

It could indeed. And while Microsoft would surely insist that such a handset is — like Surface — simply a reference design meant to show other manufacturers what’s possible, that device would most certainly be — like Surface — a piece of go-to-market, Microsoft-branded hardware.

Which means it would put Microsoft between Nokia and its smartphone customers. And no good can come of that.

In other words, the real risk factor for Nokia in this situation isn’t losing Microsoft’s attention, it’s being forced to compete against it the way Redmond’s longtime hardware partners now must in the Windows 8 tablet market. Who wants to do that? Certainly not Nokia, which has its hands more than full with the likes of Apple and Samsung, HTC, Motorola and the rest of the Android armada.

Return to: Nokia: A Microsoft Surface Phone Could Screw Us