Why a Nokia-built Android phone might make sense for Microsoft

With Nokia’s(s nok) hardware division becoming part of Microsoft(s msft), you’d think that building phones based on Android(s goog) would be like cheating on a spouse. Let’s call it more like “playing the field with permission,” as Nokia reportedly does have an Android phone in the works and it might not be a bad idea for Microsoft if that handset comes to market.

Back in 2010, I thought the time was right for Nokia to dump its then up-and-coming MeeGo platform and go with Android. I still wonder what would have happened. That didn’t occur though, and as we all know, Nokia opted for Windows Phone in 2011 to be its primary smartphone platform. To its credit, Nokia sales are on the rise and Microsoft’s market share of Windows Phone continues to grow as a result. There’s still opportunity from Windows Phone alternatives though.

Look to Amazon(s amzn) if you doubt that. It uses Android — the free Android Open Source Project, or AOSP, software — for example on its Kindle Fire tablets. As a result, Amazon doesn’t pay for the platform and it can control the entire user experience; something that you can only typically do with your own software if you make hardware.

An AOSP-powered Nokia handset could enjoy the same benefits and Microsoft could reap the rewards.

How? By using freely available software, Microsoft could customize the experience and, to some extent, replicate that of Windows Phone without investing much. That could be helpful and cost-effective for Nokia handsets in the fast-growing low-price or mid-range phone segments.

Nokia Lumia City Lens

With control over the software, Nokia can also integrate both its and Microsoft’s services into the handset experience. Think Nokia Here, CityLens, Bing, Skype, Office, and SkyDrive to name a few. Microsoft could use the base Android software to build a Microsoft-centric phone that has no ties to Google’s services at all. If Microsoft were to add those services, which obviously doesn’t make sense for it to do so, it would have to pay Google.

There’s another benefit as well, although it’s not very obvious, nor would it help Microsoft’s overall Windows Phone initiative: More mobile apps to offer.

Again, take the Kindle Fire tablets for example.


Developers with Android apps don’t need to change much for the same apps to run on Amazon’s hardware. Microsoft could leverage the hundreds of thousands of currently available Android apps for Nokia-built Android phones. Of course, more apps for the “Android version” of Microsoft’s handsets could be looked upon as a Windows Phone detriment, so the company would have to be careful here.

If nothing else, every Android-powered phone built by Nokia for Microsoft would be one less “win” for Google.

Since the phones wouldn’t use any Google services by default, Google gains nothing: No revenue and no user data, which is where it makes its money. Such a move, if successful, could blunt Google’s momentum. Android would still be a dominant OS, but it wouldn’t matter for these phones: Microsoft would reap all of the ad and service revenues while keeping information from mobile device users out of Google’s hands.

My colleague, David Meyer, has a differing viewpoint, suggesting that Microsoft would simply be better served to kill any such Android project. He has a point in that Microsoft’s overall Windows message is confusing enough with three platforms, including Windows RT, which is likely to be merged with Windows Phone. He could well be right for that and other reasons; let’s see what Microsoft decides to do once it officially closes its deal to purchase Nokia’s hardware division in the first quarter of 2014.