Nokia Is Mad at Microsoft

Nokia (NYSE: NOK  ) and Microsoft (NASDAQ: MSFT  ) have grown so close in recent years that Microkia is now a commonly accepted portmanteau, much like Wintel was during the PC's heyday. Well, the Finnish smartphone maker may not be too pleased with its software partner. In fact, Nokia is downright mad that Microsoft continues to drag its feet with upgrading Windows Phone, which Nokia's smartphone business relies entirely on now.

Windows Phone has successfully overtaken BlackBerry as the distant No. 3 smartphone platform in the world. Kantar Worldpanel Comtech's latest estimates peg Windows Phone at 4% domestic market share, well above BlackBerry's 1.1%. However, Windows Phone isn't as financially important to Microsoft as its other products. The software giant makes more on Google Android-related royalty payments than Windows Phone licensing fees.

In an interview with International Business Times, it's difficult for Nokia exec Bryan Biniak to hide his frustration with Microsoft. Biniak tries not to sound too critical of Microsoft specifically, but it's not hard to read between the lines regarding Nokia's partnership with Microsoft: "Waiting until the end of your fiscal year when you need to close your targets, doesn't do us any good when I have phones to sell today."

Windows Phone 8 was unveiled more than a year ago, which included some important changes under the hood such as sharing many core technologies with Windows 8 for streamlined development. Microsoft has issued incremental updates since then, and Microsoft did not detail Windows Phone 8.1 at its Build developer conference in June.

Much like Windows 8.1, Windows Phone is expected to get a "Blue" update that will include a number of interface tweaks and the addition of a notification center, among other additions. However, Windows Phone 8.1 is reportedly delayed until 2014 so Microsoft can squash bugs.

For Nokia, whose investors are growing impatient, that's an awfully long time to wait for another major software upgrade. Nokia's Lumia lineup is gaining momentum, albeit at a slower pace than analysts expected, and an extended upgrade time frame will just further test their patience.

Biniak has been trying to get Microsoft to change its ways with its pace of mobile development, since apps and operating system are just as important as tech specs in today's market. As further evidence that today's market for computing devices favors integrated players, Biniak concludes, "As a company we don't want to rely on somebody else and sit and wait for them to get it right."

The tech giants are at war. Some contenders use an integrated strategy, while others embrace segmented value chains that favor open ecosystems. Only time will tell who emerges victorious. Microsoft is now straddling the line between integrated and segmented as it transitions to a new age of mobile computing, but it's facing an uphill battle. Keep reading by clicking here.


 

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Comments from our Foolish Readers

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  • Report this Comment On July 31, 2013, at 9:35 PM, ctyank99 wrote:

    I finally saw an ad for the Nokia 1020 and it was a Microsoft ad... yipee!!!!

  • Report this Comment On July 31, 2013, at 9:46 PM, lee654 wrote:

    Thanks for writing a truthful article. Microsoft needs to wake up. Smartphones and mobile devices are one of the most important products throughout the world.The one product that you cannot leave home without. Microsoft can be replaced.Nokia shall rise to be the leader again with Smartphones and mobile devices in the world. Long and shall continue to accumulate shares of Nokia. I shall take it, one day at a time with Nokia ! LS

  • Report this Comment On August 01, 2013, at 4:15 AM, ronindaosohei wrote:

    Microsoft has definitely botched things with WP 8 as well as Win 8...pretty much an all round bad year for Microsoft in the consumer sector. Slow iteration at this point will definitely kill them, they should probably be working on upgrades every 6 months to push out serious features, support, keep the market interested, and get caught up. They really need to get the European market so they can capture enough market share to justify developer support and build their own apps to fill key needs. I wonder if Nokia will engage plan B?

  • Report this Comment On August 01, 2013, at 5:29 AM, Lugus wrote:

    Another example of why Balmer needs to go.

  • Report this Comment On August 01, 2013, at 5:31 AM, Lugus wrote:

    Though Nokia's Windows play makes a lot of long term sense, they need to produce an Android phone in parallel. There is no reason why they need to focus exclusively on Windows, and doing so makes them very vulnerable. Producing an Andriod version of their phones would allow them to participate in Andriod's market success and also provide a way for them to show the quality of their hardware to a larger market segment.

  • Report this Comment On August 02, 2013, at 1:31 AM, melegross wrote:

    They are receiving monetary support from Microsoft that requires them to just use Win Phone. If they also produce Android phones, they will lose that support which measures over $1 billion a year, possibly more.

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