Nokia & Microsoft Go After Apple & RIM

One its face, it would seem to be a mismatch. Nokia (NYSE: NOK) and Microsoft (NASDAQ: MSFT), two huge global firms which have been notoriously unsuccessful in the smartphone market up against the two companies that the market believes have already won the business-Apple (NASDAQ; AAPL) and Research-in-Motion (NASDAQ: RIMM).
Microsoft has tried for a decade to make a success of it mobile Windows product. It has, by most estimates no more than 6% of the worldwide market. Its licensing costs are high and its programmer base is small. Nokia has also tried to get a foothold in the smartphone market, but its success has been in mid-tier and cheap handsets. That has left it mostly out of the most profitable segment of the industry although its sells over a third of the one billion plus cellphones shipped each year.

Nokia and Microsoft have finally launched the Microsoft Office Communicator Mobile software on the handset company’s modest line of smartphones that includes its E72 and E52 models. The software is free at the Nokia online applications store.

The big money will be on RIM and Apple. They are deeply entrenched and the number of units each sells is growing rapidly by the quarter. There is no appetite for Nokia high-end phones it would seem. It is left to fight with LG and Samsung for market shares but not smartphones.

But, Nokia has huge leverage in the handset market. It does a great deal of business in developing nations where Apple and RIM only have a modest presence. The Microsoft software also has many features. According to Bloomberg BusinessWeek, “The Communicator software is the core of a suite that is expected to include document sharing, live meetings and video conferencing capabilities for smartphones analogous to those on corporate desktop PCs but adapted for mobile use.” Many of these feature are not available on the iPhone or Blackberry.

And, the two huge companies do not have to take the US market by storm to be winners. The EU market is huge as are markets in China, India, and the Third World. Nokia has deep relationships in these regions. The Microsoft product is free. and Apple and RIM rely on the US and not most of the rest of the world for the great majority of their sales.

Douglas A. McIntyre