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Nokia's fall from grace

Armando Rodriguez | July 16, 2013
Windows Phone is holding back one of the most promising phone makers in the industry.

Microsoft helped Nokia that quarter by giving the company $250 million in "platform support payments," and Nokia weathered the storm--only to keep making the mistakes that had put it in its unenviable position in the first place. Meanwhile, interest in Windows Phones began to wane as people discovered that the platform lacked many of the apps available on iOS and Android, and as Samsung began to make big moves with its Galaxy line of Android devices.

Samsung surges
The Samsung Galaxy S3 which seemingly exploded overnight, quickly became one of the best-selling smartphones of all time. Its shadow loomed heavily over the September 2012 unveiling of the Nokia Lumia 920, an excellent phone whose shortcomings were magnified when it was placed next to its two strongest competitors. Countless reporters and editors fussed about the 920's size and weight compared to the iPhone 4S and the Galaxy S3, painting a picture of an outmoded phone running a neglected OS. Why would you want to buy a big yellow brick when you could get a slim, lightweight Android phone with way more apps and use it on any of the four major carriers?

In an All Things D article titled "A Third Mobile Platform? There's No Room for One," John Paczkowski explained that Apple and Android had gobbled up so much of the mobile market that not even the combined efforts of Windows Phone and BlackBerry stood a chance against the new duopoly. The balance of power suddenly shifted away from the old Apple-versus-Android dynamic and had become Apple versus Samsung versus the rest of the Android mob. The third place spot that Windows Phone--and by extension, Nokia--had hoped to fill no longer existed.

The Android approach?
Flash forward seven months, and Nokia is still hemorrhaging money: In the aftermath of the $196 million loss that Nokia posted in the first quarter of 2013, shareholders and critics are begging CEO Stephen Elop to "please take another road." What they're really saying is that they want Nokia to make Android phones.

"I think Nokia would be incredibly competitive if they moved to Android. With that great camera software, they could definitely give Samsung a run for its money," says Patrick Moorhead, president and principal analyst at Moor Insights and Strategy. "Nokia has shown they have great hardware, they have great camera technology--but they are riding a platform that doesn't have the steam to get them to where they need to be."

The biggest complaint out of the Lumia 1020 reveal wasn't the phone's exclusivity with AT&T, but the fact that it ran Microsoft's mobile OS instead of Google's. My friend Marc Flores from PhoneDog did a good job at summing up my feelings in his article:


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