Thursday, February 24, 2011

Why I believe Microsoft will buy Nokia

I have been pretty lucky in January to predict that Nokia would pick Windows 7 as its new OS. I even won a beer in a bet with the Honorary Consul to Finland in Silicon Valley, clear sign the Finns were not expecting it at all...

I felt it made sense for the situation Nokia was in. I do not think they had many choices. I believed Android was a better option, but it was just not going to happen. Microsoft, also because of Elop's background, was the easiest path.

However, I have been quite surprised by the way they threw Symbian under the bus. I was ok with killing MeeGo, although it is sad to see it (almost) gone, but I feel Symbian has so much market share - still - that a light touch would have been better.

I would be shocked to hear today from any developer in the world "I am still developing for Symbian". As of last week, Symbian is a dead platform, everybody is jumping from it.

Unfortunately for Nokia, developers are not jumping from the platform towards the same boat. They are going to miss the Microsoft boat because it is just a raft, right now. However, they will not miss the Android cruise ship, because it is enormous, it has a pool and a casino on it (check this fantastic video, it is amazing to see how fast Android grew).

Giving up on Symbian, waiting for a Windows Phone to appear (at the end of the year), means wasting a long year, probably even two. If you consider where Android was two years ago (nowhere, check the video above for February 2009) and where they are now, you know what I am talking about. This market is moving at Silicon Valley speed, if you miss two years, you are history.

That's why I think Nokia is doomed as an independent company. Before the announcement, their market cap was $43B, now it is $32B (yep, eleven billions jumped off the platform too). That means today Microsoft has 7 times Nokia market cap (they are at $224B).

With the devastation of the Symbian story (and the grow of low-cost devices from MediaTek and Android), I can only see the stock go south from here. In a year, I bet their market cap will be around $20B, just half of what it was before the announcement.

Put yourself in Steve Ballmer's shoes. At that time, your market cap will be ten times Nokia's. Their company will be $20B cheaper. Apple will be out with iPad 2, iPhone 5 and maybe even an iPhone Mini, with the highest margins ever. Android will be over 80% of market share in mobile, with Google making billions in mobile ads. Where can you go? You can't beat Android, because it is open source and it sells for zero dollars (and it has a momentum that cannot be stopped). But you can chase Apple.

And to chase Apple, you need a vertical integration, from the phone to the OS to the cloud. Microsoft+Nokia is exactly that. Give it a year, there will be friction between the two sides, because the pressure will be enormous and these things rarely work. Microsoft will be left with the only choice of buying, with everyone saying "smart move, you got them for cheap!".

That's why I believe ultimately Microsoft will buy Nokia. And a fantastic story of a company, which was selling rubber boots in the coldest place on heart then moved to mobile to conquer the world, will come to an end. Knowing the Finns, they will drink on it, and move on with a smile. They still have Angry Birds, after all.

Thursday, February 03, 2011

Android Honeycomb is no iPad

A few weeks ago, I wrote a post about the Home button of the iPad, what I call "The Panic button" (the one you press when you are in panic, that brings you home). Someone told me the post was Zen, even too Zen... "How can you write an entire post on a single button?".

The answer is "Just because I can ;-)".

Jokes apart, I still believe it is a little detail that makes all the difference in the world (of UI).

Today, looking at the pictures of the new Android Honeycomb operating system (the one designed for tablets), I found a confirmation. Look below.

What is it?

Simple, this is the home button on the Android tablets, just slightly more complicated. Slightly.

First of all, is there really a Home button? Let's look left to right.

The first button must allow you to scroll the screen to the left. The middle one to scroll the screen up. The third one... well, maybe that thing on the top is an arrow pointing top-right: so it must be a button to scroll the screen up and right (although I am not sure why I would do it).

Right? Wrong.

The first button is actually Back. Mmhh, like the circular rotating arrow I have on my Android today. But the circular shape of it somehow gives the impression of going back. This one, it does not. In particular, not with a touch interface (it could, with a mouse-based interface).

The second button is actually Home. Hey, how did I miss it? That is a house, not an arrow! Yep, one close to an arrow, which is not really an arrow...

The third button allows you to switch between applications you have open (I am not even sure what its name might be ;-) Something that would freak out your beginner user, the actual Panic button, but the one that generates panic because stuff move in front of your eyes and you do not exactly know why.

I do not think my mom will ever click the Switch App button intentionally. She would not know what to do with it. She wants one single application open, the one she is using. She does not understand multitasking, multitabbing, multiwhatever. She is old school, when people would watch TV without an iPad on their lap.

However, I am sure she would click on it by mistake. She would panic, she would lose confidence in the device, she would think it is an enemy, not a friend.

That is why I am going to buy her an iPad tomorrow. Android is no iPad, sorry. And yes, just for a little button, however Zen it is. It is $499 more for Apple, Zen.