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Microsoft's contract with Nokia isn't fully public, but the Nokia side has talked about "billion-dollar" payments they expect to Nokia from Microsoft if the eco

by rst 14y ago

Microsoft's contract with Nokia isn't fully public, but the Nokia side has talked about "billion-dollar" payments they expect to Nokia from Microsoft if the ecosystem takes off[1]. It's not clear exactly for what --- Nokia is providing mapping data and software for Windows Phone[2], and presumably collecting royalties (including from phones shipped by their competitors!) but that's only part of the picture, and perhaps a small part. One might guess that some of these payments are conditional on Nokia not offering another smartphone platform. If so, that's what Nokia has to lose. Then again, if those payments are also somehow keyed to the size of the Windows Mobile market as a whole (e.g., those map royalties), they might not have nearly as much to lose as both sides anticipated when they made the deal in the first place. [1] http://www.tomshardware.com/news/Microsoft-Nokia-Windows-Phone-7-Deal-Partnership-money,14564.html http://www.tomshardware.com/news/Microsoft-Nokia-Windows-Pho... [2] http://conversations.nokia.com/2012/10/31/frequently-asked-questions-maps-on-windows-phone-8/ http://conversations.nokia.com/2012/10/31/frequently-asked-q...

rayiner 14y ago
To add to your point, with no Google maps on WP8, Nokia Maps is the defacto WP8 mapping application. That gives them leverage in the WP8 market they don't have in Android land, where they'd be just another OEM. What Microsoft should really do is play Apple's game instead of Google's. Buy Nokia and make their own phones with exclusive access to WP8.
- bad_user 14y ago
  > What Microsoft should really do is play Apple's game instead of Google's It's Google that plays Microsoft's game, which has been played before and Apple lost. It's inevitable for Apple to get caught by competition, they are also bad at competing on price and their distribution network pales in comparison to the distribution network of all Android phone makers combined. One or two years ago, people talked about how small the Android apps ecosystem was compared to iOS, but nowadays they are almost on equal footing and eventually Android's ecosystem will get much bigger. If there's anything Microsoft learned is that hardware becomes eventually a commodity and their Windows/Office monopoly made it possible for them to release one shitty product after another and still have room for recovery. Apple may be more profitable than Microsoft, but they don't have the same wiggle room for screwups.
  - rayiner 14y ago
    > If there's anything Microsoft learned is that hardware becomes eventually a commodity Hardware becomes a commodity if you let it become a commodity. That's what happened with PC's and that's why all the sane manufacturers gave up their PC hardware businesses. But Apple is still making plenty of money selling non-commodity personal computers. Apple's margins on "commodity" hardware like Macbook Airs is 25%+. Moreover, even if hardware becoming a commodity is the equilibrium result, it's not sensible to go from there to conclude there is no money in hardware. In the long run, in competitive markets, profits tend towards zero anyway. The trick is to make money during shifts from one equilibrium to another. The iPod cash cow seems to be dropping off for Apple now, but in the intervening decade they made boatloads of money on that product.

by rst 14y ago

rayiner 14y ago

To add to your point, with no Google maps on WP8, Nokia Maps is the defacto WP8 mapping application. That gives them leverage in the WP8 market they don't have in Android land, where they'd be just another OEM. What Microsoft should really do is play Apple's game instead of Google's. Buy Nokia and make their own phones with exclusive access to WP8.

bad_user 14y ago
> What Microsoft should really do is play Apple's game instead of Google's It's Google that plays Microsoft's game, which has been played before and Apple lost. It's inevitable for Apple to get caught by competition, they are also bad at competing on price and their distribution network pales in comparison to the distribution network of all Android phone makers combined. One or two years ago, people talked about how small the Android apps ecosystem was compared to iOS, but nowadays they are almost on equal footing and eventually Android's ecosystem will get much bigger. If there's anything Microsoft learned is that hardware becomes eventually a commodity and their Windows/Office monopoly made it possible for them to release one shitty product after another and still have room for recovery. Apple may be more profitable than Microsoft, but they don't have the same wiggle room for screwups.
- rayiner 14y ago
  > If there's anything Microsoft learned is that hardware becomes eventually a commodity Hardware becomes a commodity if you let it become a commodity. That's what happened with PC's and that's why all the sane manufacturers gave up their PC hardware businesses. But Apple is still making plenty of money selling non-commodity personal computers. Apple's margins on "commodity" hardware like Macbook Airs is 25%+. Moreover, even if hardware becoming a commodity is the equilibrium result, it's not sensible to go from there to conclude there is no money in hardware. In the long run, in competitive markets, profits tend towards zero anyway. The trick is to make money during shifts from one equilibrium to another. The iPod cash cow seems to be dropping off for Apple now, but in the intervening decade they made boatloads of money on that product.