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How to make Microsoft great again, one Nokia phone at a time

Mark Hachman | Jan. 24, 2014
Five lessons Microsoft could digest from the business it's about to swallow.

2. Location, location, location
In September 2009, I remember wandering through the back streets of Alameda, California, trying to find the location of the USS Hornet with my BlackBerry. Two months later, Google released Google Maps Navigation for the Motorola Droid—for free. The GPS market imploded, sales of Android devices soared, and smartphone buyers started worrying about whether their phone's battery would last the length of a car trip. But until 2013, neither Apple iOS nor Windows Phone offered a free, turn-by-turn navigation app worth using. Even Nokia's own turn-by-turn app, known as Here, botched the first attempt

The partnership between Microsoft and Nokia's mapping services dates back to 2011, when Microsoft agreed to use Nokia's mapping data (which Nokia had acquired from NAVTEQ). A year later, Microsoft began using Nokia's traffic services. Eventually, it all evolved into Here, now the default navigation app for Windows Phone.

Microsoft isn't buying the Here services, only licensing them for a period of four years. During that time, one might expect that Microsoft will replace Here with its own integrated Bing Maps brand, then try to chase Google into interior mapping and other location-based services. Whatever Microsoft's choice, one thing is clear: App developers and advertisers alike are increasingly asking for precise data on a user's location, so that they can be targeted with ads. Microsoft needs to take Nokia's mapping expertise and integrate it as tightly as possible, and as soon as it can.

3. Asha offers a path into emerging markets
Some technology publications ignore Asha—Nokia's lineup of low-cost phones for emerging markets—at their peril. But Asha addresses the reality of the situation: Apple's iPhones are aspirational products that many would love to afford, but can't. Android, with its lack of licensing fees, is currently filling that niche. But Windows Phone is catching up.

In November, for example, Kamtar Worldpanel reported that Windows Phone had overtaken iOS in Italy and had made rapid progress in Europe and South America. "Nokia dominated in Latin America for many years, and while its popularity declined with the fortunes of Symbian it now has an opportunity to regain the top spot," Dominic Sunnebo, strategic insight director at the analyst firm, said in a statement. "The majority of consumers in Latin America still own a Nokia featurephone and upgrading to an entry level Lumia is a logical next step. Price is the main barrier in developing markets and the budget Lumia 520 opens the door to smartphone ownership for many."

So far, the Asha lineup runs on its own Asha OS. Microsoft has two options here: to bring Windows Phone to the Asha lineup or to encourage existing Asha owners to "trade up" to a Windows Phone. In July, Nokia brought its Here traffic app to the Asha line, helping to build a bridge between the two platforms. But knowing how to design, buy components for, market, and sell a low-cost phone is invaluable knowledge that could be used to expand Microsoft's market share.


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