Nokia CEO says that a Surface phone would be a “stimulant to the ecosystem,” welcomes the competition

Daniel Bader

October 18, 2012 3:00 pm

Nokia’s CEO said during a call following the company’s disappointing Q3 earnings that a potential Microsoft-made Surface phone would be a “stimulant to the ecosystem.” Referring to Windows 8 and Windows Phone 8, Stephen Elop said that he welcomes Samsung, HTC and even Microsoft to create smartphones: “[They're welcome to] have devices in the market and to be making whatever investments that helps spur the ecosystem on.”

Rumours of a Surface Phone have arisen lately as Nokia, HTC, Samsung and even Huawei gear up to release their first Windows Phone 8 devices. But Nokia has the most to lose out of all the company’s investing in Microsoft’s overhauled phone platform; all the other OEMs on the list make the majority of their profits from Android, though HTC is certainly feeling the pinch from Samsung in its latest quarterly earnings.

Nokia is also in a very uncomfortable position right now. It needs to continue to woo Microsoft and prove that its Lumia devices are the best Windows Phones bang for your buck. HTC and Samsung have both announced stunning devices, but don’t have the same history of software support as the Finnish giant. That is what Nokia is banking on, and even Microsoft couldn’t touch that advantageous position. Nokia’s Drive, Transit, Maps, City Lens, Camera Extras and exclusive app deals make it by far the most attractive OEM from an ecosystem perspective, but Microsoft, if they really wanted to, could undermine everything Nokia has worked so hard to produce. It’s unlikely to happen — they both need each other — but Nokia needs Microsoft more than the other way around.

Even if Microsoft does release a Surface phone, it doesn’t have the carrier relationships, nor the distribution know-how, of a Nokia. Microsoft would have to start from scratch, emerging yet again as a smartphone underdog in its own game. While the Surface fits in with its new ethos as a “devices & services” company, they control the ecosystem and the distribution of each tablet sold. They wouldn’t be able to maintain the same control over their phones, as consumers, especially in North America, are unaccustomed to buying phones unlocked and at full price straight from the manufacturers. Apple tried this and failed; Google has seen limited success selling its Nexus devices from the Play Store; and Samsung’s success is largely attributable to hammering every carrier in every market with honey deals.

I also believe that if a Surface phone was imminent, Elop wouldn’t be so flippant about it. It’s more than likely Microsoft is using a few homegrown devices for software testing. Building a smartphone, and making it a success, is incredibly difficult; Elop may be having a chuckle to himself about Microsoft’s potential success in the smartphone market. In fact, it may be the only thing that makes him laugh all day.

Via: The Verge

  • iphoneee

    will nokia bring a 4-inch screen with SIRI?

    • Big Ang

      Nokia reserves the 4inch iPhone-size screens to its entry level cheap phones. For its higher end phones Nokia uses larger screens.

  • lukeiphone

    iPhone is better.

    • BB King

      You’re opinion means less to me then the shovel used to dig Steve Job’s grave. GET LOST TROLL!

  • Hilman

    Only 300,000 Luminas shipped last quarter in North America, what a complete failure. Nokia has lost $4.8 billion Euros ($6.2 billion CDN) since early 2011 when Elop took over and announced that Windows Phone would be the new OS.

    But I am sure the Windoze fans will give me a thumbs down, truth hurts I guess lol.

    • Donny

      Lumina is a car. I haven’t read the rest of your post after that, because it instantly became irrelevant.

    • Hilman

      Stick your head in the sand a little further Donny. Face it, Windows Phones are a huge flop, or would that be an EFlop lol.

    • Bri

      I think the OS is going to be a huge success due to Windows 8 OS being widely used on PCs, Labtops, Tablets, Phones.
      The results last year is reasonable but once Windows 8 releases on all those platforms, it will be one of the biggest with iOS and Android.

  • HighClassFrenchCricket

    Further proof that Stephen Elop is nothing but a Trojan horse. Since becoming CEO of Nokia every decision made has become a failure for Nokia but has come at the directive of Microsoft.

    • kroms

      Exactly ! When he is done burning this Company to the ground he will be taken care of. Either way ELOP has made his millions at the stupidity of the NOKIA board and it’s Investors.

      If I had Nokia stock I would of SOLD long ago to avoid a comlete LOSS

  • Swizzlerz

    who knows. i like the specs on the 920 if i can get it on telus i would but its on rogers :( waiting for some telus info on which windows 8 device they are getting…..

  • Let the games begin

  • stylinred

    the q3 results weren’t disappointing it was expected nokia would do horribly and Nokia actually performed better than the estimates

  • Daniel Bader

    Logan, who’s paying for these vacations? Regardless, it’s news to me!

    And as for commenting on Windows Phone 7.5′s web browsing performance, this was covered extensively in many of our reviews, including the Lumia 800, 900, 710 and 610.

    You’re also commenting on an operating system that has yet to be released. So unless you know something I don’t, I doubt we’ve had an opportunity to review any of the phones you’re talking about.

  • kroms

    Nokia’s CEO ?

    I think they MENT MS CEO. This guy is going to KILL NOKIA.
    Wait and see , Nokia investors will REGRET ever doing this thing with Stephen Elop.

  • TouchMyBox

    Microsoft Exec is excited for Microsoft product.

    More news at 11.

  • Big Ang

    For all the Fandroids out there that keep harping on that Nokia should have gone Android, read the story right below this one. The one where it says:

    “Motorola’s operating loss was $527 million, $505 million of which was attributable to the mobile segment. Despite higher revenues of $2.5 billion, Motorola was not able to turn a profit this quarter as it continued to struggle to gain market share against Samsung in the Android space. ”

    Unless your company’s name is “Samsung” or your company is partly funded by the Chinese government (Huawei and ZTE), the chances of you making money selling Android phones is slim to none.

    As for sticking it out with Symbian and Meego – by the time Meego would have been released, it would have been generations behind Android and iOS, both which would have locked down the majority of the smartphone marketplace.

    The only chance that Nokia had to remain in business was to join up with Windows Phone. There are no guarantees they will succeed, but a chance at success is better than certain failure (going Android or Meego).

    Anyone blaming Elop for Nokia’s troubles should take a second look – Nokia was circling the drain WELL BEFORE Elop joined Nokia.

  • Big Ang

    @ Daniel

    Your spam filter is set too high. The email regarding the free trips is probably in your spam folder. The trips to Finland and Seattle were a blast – you were missed.

  • jackjia

    Elop is to gone. Period

    Re-Start your life Nokia with multiple OS

    BB10, Android and Windows

  • jack

    It’s looking like elops got Stockholm syndrome. Either that or he’s on some seriously good drugs.

    You’ve just steered your company to two years of losses, shares at junk status, market share from 35% to 4%. MS never gave you that much lauded ui customisation, Osborned your wp7 phones, gave premier wp8 launch to HTC, Osborned your tablet plans and have now repeated the performance on handsets. But hey, it’s all really great.

  • jack

    Big ang. Mate you’re turning this into a black or white argument. WP7 is Osborned, and no one is buying them. Meego was released ahead of the lumias to rave / good reviews. That’s 2 years of resources that could have been devoted to Meego and the qt migration strategy. And yes keep symbian, but only as a means to supporting your existing customer base and migrate them to Meego handsets. That my friend is a strategy. Now what does nokia have? More wait and see. More the turn around is just around the corner. MS has your patents, protection from them, your mapping, and and nokia is left with virtually nothing but the hope that yes wait and see, the turn around is just around the corner. Hogwash. They got done over by MS at every turn and the strategy has failed. They’re now just a third party oem without their own ecosystem or their own os.

  • STY

    The problem is people will shell out all this cash for Windows 8, but be forgotten about soon enough when Windows 9 comes out. Nokia has already proven to do this.

  • Bob J

    Nokia definitely make the best looking Windows Phones.

    Your article is accurate except for one fact: Microsoft already has excellent relationships with carriers across the world, albeit in different parts of their business – the transition into mobile would be minimal.