Nokia Has a Plan B

It always helps to have a backup plan.

According to Nokia's (NYSE: NOK  ) freshly appointed chairman, Risto Siilasmaa, that's exactly what the struggling Finnish smartphone giant has. Siilasmaa told Finnish newspaper Yle Uutiset that in case Microsoft (Nasdaq: MSFT  ) Windows Phone 8 doesn't "live up to expectations," the company has a "contingency plan."

As far as what that could be, the chairman declined to elaborate. My only guess is that all directors carry emergency keys on lanyards and that in the case of (another) catastrophic fiscal quarter, two or more directors must insert and turn their keys at the exact ("On my count: three ... two ... one!") same time, revealing a giant red emergency button.

Source: Wikipedia.

Source: Wikipedia.

Upon being pressed, the boardroom's roof would be blown off and figher-jet ejection seats would ignite, sending all directors and management skyward. They'd probably have golden parachutes in place to ensure a safe landing. We wouldn't want them to get hurt, after all.

Even though Nokia is aggressively moving all in on Windows Phone, it's hinting that it has a couple of chips left in its pocket if it gets drawn out on, which is somewhat likely considering the odds are stacked heavily against Windows Phone. Its overall market share has shrunk from 2.6% to 1.9% over the past year. After ditching Symbian, that operating system's market share "has come down close to zero," according to Siilasmaa.

With Symbian circling the drain, there aren't a whole lot of other promising alternatives with operating systems if Windows Phone doesn't work out. Of course, Google (Nasdaq: GOOG  ) Android seems a clear possibility, and the search giant welcomes all with open arms. However, that would put Nokia directly against heavyweights like Samsung, which recently leveraged Android to overtake Nokia as the largest mobile-phone maker in the world.

Microsoft also just burned Nokia by saying current devices, including its popular Lumia 900, won't be getting any upgrade treatment and Windows Phone 8 won't include backwards compatibility. This came just mere months after the device's launch in April.

I think it's about time to insert those keys and let the countdown begin.

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Fool contributor Evan Niu holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Microsoft and Google. Motley Fool newsletter services have recommended buying shares of Microsoft and Google and creating a bull call spread position in Microsoft. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

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  • Report this Comment On July 03, 2012, at 1:41 AM, AdamSmyth wrote:

    My crystal ball says: If Windows Phone doesn't pan out, Nokia buys WebOS from HP and goes back to developing an operating system in-house.

  • Report this Comment On July 03, 2012, at 7:49 AM, imersion wrote:

    I like the overall article, but it is not painfully accurate, and with NOK the pain must be completely dissected. So, MSFT will upgrade the LUMIA 900; but not to full Win8, only to Win 7.8

    This will provide most of the functionality, since LUMIA already has the Metro interface. It will add smaller Tiles so that LUMIA's front end will be more efficient and look smarter . What functionality 7.8 will miss is not clear - perhaps with some of the apps and its ability to update without going through the carrier. We will learn more soon I suppose; but in any event the main point about WIN 8 upgradability is overstated and thus wrong.

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