Nokia is going to be launching an Android device soon. Sure, it's a low-end phone that falls in line with Nokia's Asha devices, not a high-end smartphone that will sell incredibly well here in the U.S. But this Nokia phone could be a step in the right direction for the new Microsoft-owned division. It could also be a foot in the door for Android at Microsoft, although that is also unlikely. If Microsoft would embrace Android, at least in the developing market, it would be a key to their success with the Nokia brand and with their struggling mobile brand.
Microsoft's Windows Phone sales are abysmal. They come in a solid third in global market share behind Android and iOS. Android holds about 80% market share, iOS has about 17%, and the rest is made up of Windows Phone, BlackBerry, and smaller mobile OS's like Ubuntu Touch and Firefox OS. Microsoft can't seem to get developers onboard with their platform for either their smartphones or tablet offerings. The argument that Microsoft should embrace Android is not a new one, but it is one that is still relevant. In a world where customers want apps and platform integration, Microsoft can't compete.
The Microsoft that Satya Nadella is taking control of is confused about what it wants to do with its mobile platform. His predecessors wouldn't pay the Metro grocery chain ~$800 million to use the Metro name. That left Windows Phone without a solid platform identity. The company further confused things with Windows RT. Even so, all of the pieces are in place for a really compelling end-to-end consumer offering, but Microsoft can't pull it off. Between desktops, laptops, Windows Phone, and the Xbox, Microsoft should be able to give consumers a complete package. They don't have a unified vision and so they don't have a unified offering to compete with the Android or iOS ecosystems.
The one hope for Microsoft to make an impact on the mobile landscape is with Android. Nokia seems to have said, "We're getting purchased so we might as well release this Android phone we've been working on." Microsoft is allowing it to happen, but they would do well to build this platform into something that can carry the Nokia handset division back to relevance. Nokia sustained itself for years with it's low and mid-range S40 devices sold in developing countries. BlackBerry has followed a similar path, although they are now on the brink of death. It's the same strategy behind the Moto G. Samsung has flooded the market with these type of devices, too. They are cheap to make, affordable for customers and can provide a foundation for Microsoft to build their mobile brand.
The Nokia X is built on Android but won't have access to the Google Play Store, so it doesn't fully address Microsoft's need to provide more relevant apps for their customers. It's a start, though, and Nadella says that they are fully embracing the new Nokia division. "While the deal is not yet complete, we will welcome to our family Nokia devices and services and the new mobile capabilities they bring us," Nadella says. The statement is vague but it does leave the possibility of a Microsoft/Android partnership. There's even rumor that we could see additional Nokia devices running Android this year.
Microsoft already generates about $2 billion per year in revenue from Android royalties and licensing agreements. Why not just make the leap to Android fully, if only on their low-end Nokia devices? Droves of Android fans would make the leap. Nokia makes excellent hardware. Their devices are held back by the current Windows Phone OS. Unfortunately, the Nokia X is likely to be a one-off device that fails to bring about any real change in Microsoft's floundering ecosystem. Nadella has committed to a "cloud first, mobile first" strategy, and the answer is sitting right in from of them if they would only embrace it.