Should Nokia have gone with Android?

Ben Thompson writing at Stratechery has a new post today on BlackBerry and Nokia. In the post he argues that both companies should have opted into Android, and that had they done so, the Android landscape could very possibly look dramatically different (with Nokia as the clear leader, and BlackBerry holding on to their enterprise segment).

Nokia’s “burning platform” decision in Feb 2011 will likely be classic tech strategy case study material (if not already). In the 2.5 years since that fateful decision, Nokia Lumia has sold a bit more than 25 million units (according to Wikipedia), with 7.4MM in Q2 2013. By comparison Apple sold 31MM iPhones in its latest quarter, so it’s fair to say that Nokia’s Windows strategy probably hasn’t been as successful as they envisioned.

Having said that, I do have some doubts over Stratechery’s assertion that Nokia could have dominated Android like Samsung is doing so today:

  • By the Feb 2011 point, Samsung had already sold 10MM Galaxy S phones (in 2010), and a few months away from launching the Galaxy SII. Nokia’s first Lumia phone would only come in Nov 2011. In short, Samsung had already found its formula in Android, while Nokia would be in discovery mode
  • Unfortunately for Nokia, the iOS/Android smartphone era is the first mobile revolution that was started in Silicon Valley, unlike previous chapters in mobile history. The US market suddenly became the world leader in mobile innovation (you can measure it by app ecosystem revenue etc.), and this is a market that Nokia had neglected for almost a decade. Trying to regain a foothold in this market, whether with Android or Windows Phone, is going to be an uphill battle
  • In the iOS / Android era, hardware is not a differentiating factor. This is why every branded Android vendor tries to tack on their own software tweaks and/or even services. Nokia’s previous success relied on high quality hardware with memorable features (a great camera, great support for music etc.), and these strengths don’t come into play if it became an Android vendor. Going with Windows was an act of differentiation – Nokia is the majority Windows vendor with 80% share
  • Unlike the other industries that Stratechery related to (PC and console), the mobile industry has a giant elephant in the room – carriers. This is why I think there is room for a 3rd (or even 4th) platform, because there will be carriers that will give it enough distribution to survive. Furthermore, for an established horizontal service (e.g. Netflix), while the introduction of a new platform means additional cost, it is also a raising the barrier to entry for its competitors (as well as improving leverage against the existing platform owners), so the big services (Netflix, Facebook) would gladly jump in bed with the new platform