Nokia admits “unproven” Windows Phone 7 is a risk
Nokia has admitted it’s taking a major risk with its deal to deploy Windows Phone 7 on its handsets.
In its annual report filed with the US Securities and Exchange Commission, Nokia outlined the Microsoft deal and highlighted the potential dangers of hopping into bed with an “unproven” platform.
The company was outlining upcoming risks that could affect the company and its investors, and the Microsoft tie-in was prevalent in those uncertainties, which stretched over 29 pages of the report.
The “Risk Factors” might relate to worst-case scenarios, but make sobering reading for investors in the company.
The Windows Phone platform is a very recent, largely unproven addition to the market focused solely on high-end smartphones with currently very low adoption and consumer awareness relative to the Android and Apple platforms
“The Windows Phone platform is a very recent, largely unproven addition to the market focused solely on high-end smartphones with currently very low adoption and consumer awareness relative to the Android and Apple platforms,” Nokia said in its report.
“The proposed Microsoft partnership may not succeed in developing it into a sufficiently broad competitive smartphone platform.”
The company said it was also wary of its ability to profitably sell handsets now that it had to work a licence fee into its pricing model.
Not only is the platform a risk, Nokia said, but the fact that it would overshadow Symbian could also put developers off working on the older OS and hamstring its involvement with the MeeGo platform.
Consumers might also wait for Windows handsets to become available and hold off buying Symbian devices, the company warned.
“We may not be able to maintain the viability of our current Symbian smartphone platform during the transition to Windows Phone as our primary smartphone platform or we may not realise a return on our investment in MeeGo,” the company said.
“Our mobile operator and distributor customers and consumers may no longer see our Symbian smartphones as attractive investments during the transition to Windows Phone.
“This would result in a loss of market share, which could be substantial during the transition, and which we may not be able to regain when quantities of Nokia Windows Phone smartphones are commercially available.”