Analyst: Meego's a Joke–Nokia Needs Windows Phone 7

Published on February 2, 2011
by John Paczkowski

Some unsolicited advice for Nokia CEO Stephen Elop ahead of next week’s big Capital Markets Day gathering: Scrap the company’s Meego OS and forge a Windows Phone 7 hardware alliance with Microsoft. Otherwise, prepare to be eclipsed once and for all by the upstart rivals that have already bested you in the smartphone space.

That’s the gist of Berenberg Bank analyst Adnaan Ahmad’s open letter to Elop and former colleague Microsoft CEO Steve Ballmer. “[Stephen] announce an EXCLUSIVE deal with your ex-colleague, Steve: you get access to their Windows Phone 7 (WP7) intellectual property scot-free and access to the US market where your share has dived to the low single-digit level, and in so doing cut your bloated handset business R&D budget by at least 30 percent,” Ahmad writes. “Get rid of your own proprietary high-end solution (MEEGO)–it’s the biggest joke in the tech industry right now and will put you even further behind Apple and Google. Focus your high-end portfolio around WP7, and over time you can take the cost down (that’s Steve’s job and cost base) to get this into the mid-range market. Push your Symbian solutions into the low-to-mid-range smartphone market as quickly as possible to defend market share versus Android’s upcoming lowered cost ecosystem.”

An interesting, albeit unoriginal, idea, particularly coming as it does after Elop’s assertion that Nokia “must build, catalyze and/or join a competitive ecosystem” to effectively compete in the handset industry. And it has its merits–for Microsoft, access to Nokia’s massive global market share, and for Nokia, the ability to go to market with an OS that isn’t a joke, as Ahmad notes. That said, while Microsoft is certainly a valuable ecosystm partner, it’s not yet all that valuable in the mobile space. But it could be.

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