Some additional thoughts on Nokia X

I have been giving some more thought on the Nokia X and I would like to point out few things I find interesting in it:

Microsoft services

According to Nokia website Nokia X comes with “Microsoft services like Skype, OneDrive and Outlook” [1]. Now naysayers say that Microsoft had nothing to do with Nokia X and that Nokia used the public MS APIs to include those services. I do admit that it is a possibility, but there is much more problematic aspect here and it is in form of Skype (see more below).
So I say Microsoft has been involved, at least to some level.

Skype

With the purchase of any Nokia X family smartphone in select markets, people will get one month of Skype’s Unlimited World Subscription for a limited time, ideal to make international calls to landlines in more than 60 countries and to mobile phones in 8 countries.” [2].
If we insist Microsoft had nothing to do with Nokia X, we could assume that Nokia has bought a bundle of Skype premium gift subscriptions for around $10 per subscription, but honest – for a device priced at $100 range? I doubt it.
If instead this is – as all common sense says it is – a campaign of handout of free limited time subscriptions from Skype, then well… Microsoft was involved (as it is Microsoft that owns Skype).

Windows Phone

Let’s then assume Microsoft (soon to own Nokia D&S and Nokia X product line) was involved in the process. Where does this fit? Offering Android device is direct contradiction to Windows Phone ecosystem strategy. CD-Host already wrote some about it (click here) and that initially triggered me to write this.
I agree with him, Microsoft definitely would love to have Lumia line sell in high-margin, high-end area, like Apple. No doubt about it. So a chance to stop going downwards in the price range makes it possible to focus more on the high end features. With Nokia X Microsoft could stop trying to go lower in the Windows Phone price range and still get their services to the target group of next billion of mobile phone users. At the same time they would fill the “Services” part of the Devices & Services strategy as they have a testbed for Android versions of their apps.
It’s a plausible view. Biggest risk looms in app developer side where this is once again more of a reason to choose Android instead of Windows Phone. But if (thanks to price range adjustment) Microsoft can show that Windows Phone users are on average far more likely to pay for their apps than Android users, they have their case for app developers.

All this said, I’m more and more excited to see what happens to Nokia X family after Microsoft takes over Nokia D&S.

Tomi Ahonen (naturally)

Yes, this blog rarely forgets to mention Tomi. Previous text was my view. Tomi on the other hand has been very clear that Microsoft wants to have nothing to do with Nokia X:

Microsoft cannot allow Nokia X series to exist. One thing they may do is to immediately cancel all unlaunched X phones and quietly end the one(s) that had launched. The other thing is to hide X series performance. And the third thing is to sell off the dumbphones unit with its X series phones as soon as possible.

[3]

Also Tomi insists that Nokia X will outsell Lumia for good:

Only one X series, the middle model, will be on sale now from February. It has one full month to sell (March).

It could sell a million or two if Nokia is lucky. For a full quarter – ie Q2 of 2014 – these three X series should sell in the many millions, say 5 million as a rough number and could be as high as 8 million. But for Q1 the quarter that is now under way, Nokia smartphone sales are falling and the one X series won’t stem that tide.

[3]
I don’t think I need to even mention his view about Skype-originated operator boycott. How does he expect this phone to sell if Skype was reason for Lumia sales issues? This phone comes with instant loss of one month of operator voice revenue. And that loss may be continued indefinitely if the customer chooses to continue Skype subscription. In Tomi’s perspective Nokia X phones should not see a single unit sold by any carrier, anywhere, ever.
But instead he says they will outsell Lumias whose sales are falling. Could he make up his mind? Either there is a Skype based boycott or then there isn’t. He can’t have both.

REFERENCES:

[1] http://conversations.nokia.com/2014/02/27/maps-shows-way-nokia-x-family/

[2] http://press.nokia.com/2014/02/24/nokia-connects-the-next-billion-with-affordable-smartphones/

[3] http://communities-dominate.blogs.com/brands/2014/02/modelling-nokia-x-scenarios-and-the-level-of-desperation-it-reveals.html

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