Stephan Elop was right in one thing: Nokia had to change and it had to change fast. The investors have lost faith in the Nokia's future, their credit ratings were in danger and their market share was going down even faster than their stock price. I will go into details why the chosen Microsoft path is very bad in a minute. First, I want to discuss what Nokia should have done instead.
1. Announce that the future of Nokia is a new operating system (with a catchy name 😊 ), based on the Symbian kernel but with Qt-based APIs. The Symbian native C++ APIs will be abandoned, which will save a lot of R&D resources and will make the future changes of the platform much easier as it would not have to provide backward compatibility with the horrible Symbian C++ APIs. This means that the Symbian kernel R&D team will remain intact but the Symbian user experience team will be dismantled in the short future and will be transformed into the much leaner Qt team. The first version of the new operating system will be available as a firmware update no later than September (this is possible as it is essentially a meaner and leaner version of the current system).
2. Announce that to get a traction in the US market and as a stop-gap measure, Nokia will provide Android-based phones but only in the US markets. These phones will be heavily operator-branded and customized (as the Samsung phones are) but will offer some unique Nokia advantages as the excellent Ovi Maps software, Ovi music (much more important in US than everywhere else) and the superior Nokia camera hardware and software.
3. Announce that the future versions of the Nokia "new" operating system will be available for the current Nokia 5th edition and Symbian^3 devices as a firmware upgrade. This will ensure the customers that they can upgrade their OS in the future as with iOS and Android and also will be very good for the developers as they will not have to be targeting very different versions of an OS.
4. Announce that in the future Nokia will be much more aggressive with providing better hardware (CPU/memory/GPU), probably using Nvidia Tegra for the future high-level handsets (possibly forming some kind of exclusive agreement with them if the terms are good?). Nvidia needs a big mobile partner to avoid the sad fate of the first Tegra platform and Nokia badly needs better hardware.
5. Announce that the next firmware update for Nokia 5th edition devices will include Qt and will be released in no more than 3 months. Additionally, the Ovi store review process will be much improved and will possibly offer faster reviews for some kind of payment and the current slower service for free.
6. Announce that the Qt based APIs and UIs will be improved much faster because the full compatibility with the desktop version of the Qt will be abandoned. This is the main reason for the slow development speed of Qt and the hundreds of bugs. The desktop version of Qt will be branched out and moved to a open source model of development with minimal expenses for Nokia. The whole Qt team will start to work on the mobile Qt APIs for the new operating system. This will both lower the R&D expenses and till accelerate the Qt mobile development.
This strategy will solve most of the current Nokia problems:
1. Ugly and dated UI of Symbian and general dislike of the system. The problem is entirely in Symbian C++ APIs and the backward compatibility. Throw them out the window and you can have better UI much faster. Also, it will have a new name so the bashing will stop. 😃
2. Slow speed of development of Symbian and Qt. The problem is that these teams are not focused at all. The Symbian user experience team is fixated on backward compatibility with the badly dated and awkward Symbian APIs and UI concepts, and the Qt team behaves as if Symbian is just another platform for them, which is no more important than the desktop versions of Qt (as if Nokia is not the owner).
3. Stop the erosion of market share. The Android phones will finally get the Nokia US market share and promise of OS upgradeability for the existing users will make them more willing to buy the current Nokia handsets and upgrade to the new OS later.
4. Much leaner R&D expenses in the long run. The Android phones will not be expensive to develop as they will be using the same future hardware as the "new" Symbian phones and the Android is free. The only expenses will be the porting of Ovi Maps and other services, which is not a big deal. The new Os team (Symbian kernel + Qt API and UI team) will be much smaller than even the former Symbian user experience team. We are looking in at least 1 bln. less expenses in H2 of 2011 and 3-4 bln. in 2012.
Now, lets see what means the new Windows Phone strategy for Nokia:
1. Nokia kills its current business (Symbian) years before it is ready to adopt Windows Phone as its main OS. The only reason for this is Microsoft! Elop is not stupid and knows that even if (not very likely) Windows Phone powered Nokia phones are moderate success they will not be able to replace the Symbian market share for many years. Therefore he needs to squash the Symbian sales now to be able to tell the shareholders: "Yes WM is not very good yet, but look at how fast the Symbian sales have fallen (after I announced that the platform will be killed). We had no choice!".
2. No more OS, ecosystem or even services control. MS will never give meaningful control of Windows Phone, its ecosystem or the integrated services to Nokia or anyone else. Nokia is becoming just another producer of WinPhone handsets. There is nothing exclusive for Nokia. Even Ovi Maps will be "shared" with Microsoft. This is very BAD in the long run.
3. Adopting Windows Mobile is betting heavily that Microsoft will be able to prevail in a market that they were not very successful for many years. In the best case Nokia will be no better than now and in the worst case, they will be much worse than now.
4. Tens of billions of investments are going out the window.
5. All the current developers (and the developers on other platforms except these on Windows Mobile) are discourages to support Nokia products. Also, there is some kind of misconception that being a desktop Windows developer automatically makes transition to Windows Mobile easier. It is not the case at all. C# and .Net are still used on the desktop mainly for unimportant and not very successful applications. The vast majority of good Windows applications is written by C++ developers. For them C# and .Net are no better than Java and Android or Objective-C and iOS.
5. The most important reason. In the long run the closed ecosystems are not viable. If they remain too closed, sooner or later there is a more open competitor, which destroys them. iOS will end exactly as MacOS X - marginalized platform with low market share. Even now the more open Android is overtaking iOS. Oddly enough, MS has the most open desktop OS and the most restricted mobile OS. How they expect this to work in their favor is beyond me?! Under "open" I mean with open APIs and higher control from the user and applications and not open source.