The World Mobile Congress currently going on in Barcelona will generate some surprises, but Nokia Corp.’s (NYSE: NOK) announcement of a cheap, Android-based smartphone is not one of them. The phone has been rumored to be in development since last October, and now we know the rumors are true.
Called the Nokia X, the new smartphone is aimed directly at customers in countries like India, Indonesia and others where price is often more important than the latest features. The initial phone is priced at €89 ($122), and two additional models will be released next quarter for €99 and €109.
Of course, a potential buyer may wonder what will happen to the Nokia X when Microsoft Corp. (NASDAQ: MSFT) takes over Nokia’s handset business.
Before tying up with Microsoft a couple of years ago, Nokia had tried to persuade Google Inc. (NASDAQ: GOOG) to allow the Finnish company to replace many of the features of Android with Nokia’s own versions. Google said no and that ended that discussion.
But Nokia apparently went ahead and built (a process called forking) its own version of Android in the same way that Amazon.com Inc. (NASDAQ: AMZN) built its own Kindle Fire operating system from Android. What Amazon and Nokia give up is immediate access to the latest features in new versions of Android, meaning the two companies have to either leave them out or build their own.
The big hit here is to third-party apps — not all will work on the forked versions of Android so Nokia had to build its own apps and construct its own app store for the new phone. And here’s where Nokia’s announced strategy may fall apart.
The company believes that Nokia X users who want to upgrade will migrate to Windows Phone-based smartphones. That may happen, but a user who has downloaded apps from Google Play may choose instead to stick with vanilla Android. That would be good for Google and bad for Microsoft, and that would be the end of the Nokia-Android experiment.
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