I think whoever clicks into this forgotten blog to read this has strong interest in gadgets and consumer technology, and knows what I’m talking about. If I’m wrong on that, please first read this press release announcing the partnership between Nokia and Microsoft in the smartphone sector. And if you clicked into that page, pay attention to the items under the proposed partnership.

And here are my two cents on the whole event and where the trend might go in the near future.

There are a lot of people on twitter already shouting Nokia making the biggest mistake ever in desperate attempt to save itself. This, IMO, can’t be more wrong. Yes, Nokia is falling behind other in the smartphone games. But no, it’s still quite some distance from desperation.

If I read it right, according to IDC, in 2010 Nokia shipped 100.3 million units of smartphones, taking up to 33.1% of the global smartphone market. No one denies that Nokia has seen better days. But watch out, it’s still the King of Smartphones you are talking about.

Nokia is not Palm, who bled itself drier than a rock before being acquired by HP. The Finnish giant is still making huge profit. It’s just taking an unexpected fall, which has lasted a bit too long to be comfortable. It’s looking for something to break the fall, and maybe get back to rising. You can almost say Nokia is being proactive instead of reactive.

Clearly Nokia is in the mood of “concerned” instead of so said “panic” or “desperate”. That’s my first point made. Based on this point, well, I don’t know why Nokia is getting into such a ground-shaking partnership with Microsoft.

Let’s have a look at the…

Pains & Gains

According to the partnership, Nokia will adopt Windows Phone 7 as its primary smartphone platform. That’s hardly any surprise at all. But more than that, Ovi map is going to be merged into Bing Map, Ovi Store to become a section of WP7 Marketplace, Bing will be the search engine behind (what I think is) Nokia’s entire smartphone line, Microsoft adCenter to provide advertising services for (what I think is) all Nokia smartphones. Nokia will utilize its vast and long-lasting carrier network to provide operator billing agreements to Windows Phone 7.

Clearly the biggest earning goes to Microsoft. World’s biggest smartphone vendor bringing it’s gigantic market share over. And more than merely contributing to cellphones, the newly gained land has already been cleaned and decorated, ready to embrace Bing Map, Bing Search, and adCenter. The Bing team should be bathing in happy tears right now.

For Nokia, it gained a quite new ecosystem, with great OS experience built already, and plenty of room for growth. It’s not sure whether or not WP7 works well enough to break Nokia’s fall. But it’s a good try like any other. Seriously there are only 4 options out there. iOS doesn’t welcome new kids. webOS is still tuning itself to the new ownership. Android is bursting with all kinds OEM fighting each other. Hop into a jungle battle, or join an emerging township hoping to build it a city then become one of the rulers. Can’t say which is better than the other.

The real pain here, I guess, should be felt by Google. No, I’m not talking about WP7 vs Android at all. It goes deeper than phones or OSes. Google doesn’t really care about Android phones. It’s not like it makes any money from them anyway. With a million seemingly free apps and services, Google’s only purpose is to attract users, and make them stay, to view or click advertisements. That’s Google’s problem, doing dozens of different free products ultimately to channel more fuel into its advertising platform, and profit there. That is actually putting a billion eggs, Google’s and its developers’, into one huge basket.

The Nokia-Microsoft deal is effectively barring Google’s extensive ad platform out of the world’s biggest share of smartphone market. That’s eating into Google’s lifeline. The search giant won’t be happy about this. We will see what it has to do to make up the lost-before-ever-gained share.

And in China…?

Most of my stuff has something about China, and so here it is: Microkia’s influence on the Chinese market. Partly because I AM IN CHINA, and the other part is because China is a Nokia country. Up to today, I’m still seeing more Nokia S60 devices on Beijing streets than anything else. Previously I’ve started a hobby watching what phones people are using on Beijing subway from Sanlitun to Dawanglu, some of the most active business/recreation blocks in town. The first half month I’m seeing enough Symbian phones to equal all Android, WinCE, Windows Mobile, iOS, NDS, PSP, E-ink reader combined on each trip. Counting and analyzing ceased to have any meaning with that kind of advantage. Even this year, when Android and iOS is supposedly “dominating the world”, I’m still seeing more Symbian phones them either of them in Beijing.

The Nokia-Microsoft partnership will surely facilitate the release of official full scale Chinese voice/text support on WP7 in China. Because China is one of Nokia’s final strongholds now, and Microsoft expected it to help with language support.

The partnership will also facilitate the app economy in China, since WP7 Marketplace supports buying apps through phone bills, and Nokia is a good old friend with China Mobile, China Unicom and China Telecom. In a country where credit cards are seldom used and in a primitive form, paying through phone bill is about the most effective and painless way of buying apps. It’s not like Chinese consumers like to pay for apps. But whenever some want to show proper support and respect to developers, they have the most sensible option. iOS is stuck on credit card payment in China, while Google clearly refuses Chinese user to find any paid apps (or even some free apps like Kindle) on Android Market at all. That’s significant progress.

Baidu won’t be comfortable. When the local leader of smartphones suddenly gets locked to Bing Search, the Chinese search engine provider will suffer the same concern as Google obviously will do. Their business models and profit sources are not much different anyway. Therefore I predict Baidu will hurry up making a search app for WP7 (upcoming Chinese version), as well as a Baidu Map app.

Baidu’s move will very possibly push Tencent over the border. Tencent is now keen on taking up every promising platform to promote its services centered around its QQ IM. Once QQ IM comes to WP7, there will be a surge of Chinese user growth, since Chinese smartphone users use “whether there is a QQ client” as a key standard measuring the usability of a phone.

Tencent will trigger microblog platforms that are competing with it. Sina will almost surely roll out a Sina Weibo client for WP7. It’s not like there is none at the moment. Despite lack of Chinese input support, Chinese devs have already made an unofficial Sina Weibo app for the English-only WP7, with a makeshift Chinese input method packed in-app.

After that a series of Chinese companies will follow. Chinese local apps will not come for now. But once Nokia brings WP7 to China, it will come quick, and like an avalanche.

And Microsoft China will probably get bucketloads of bashing and cursing in the process. Bing Search has been steadily eating shares from Google and (previously) Yahoo as a nice “Decision Engine”. However, it’s Chinese brother is still a pretty normal search engine that looks and works like something from year 2000. Force-binding of this “Bing” to all Nokia Chinese phones will be like a disaster. Hopefully it could remind Microsoft to show some love to Bing Chinese, and bring it closer to the flagship US engine.

Conclusion

I’m not sure this makes sense. But all-out partnership at such scale seldom happens. From what I feel is common sense I got aforesaid ideas. Any different voice is welcomed. Gratitude for any feedback left here or shot to me on twitter at @chassit.

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