Nokia's Android-based mobile phones are part of a strategy to grab more customers for Microsoft in countries that haven't been saturated yet with smartphones - the intent being to upsell them to actual Windows Phones over time, according to the pending head of Microsoft's phone division.
By mixing in Microsoft services such as OneDrive cloud storage, Outlook.com and Skype in with Nokia X phones, the company hopes to acclimate buyers to the Windows user interface and Microsoft's Cloud infrastructure, says Stephen Elop, former Nokia CEO and soon-to-be Microsoft executive vice president in a video interview with re/code.
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"Now is the right time because there is a rapidly growing low-price affordable smartphone segment that's really taking off in a number of growth economies. We're seeing that in countries like Indonesia, Russia, Vietnam and a number of others," Elop says in the interview, shot at Mobile World Congress in Barcelona.
While Nokia X is based on Android, the user interface "is remarkably similar to the Windows Phone interface," he says.
That means these customers, many of whom have never owned a smartphone before, will learn to navigate in Microsoft's world first, with the potential over time to buy higher end Nokia Lumia phones that run Windows Phone as Lumia prices drop.
"And so we've gone for that and we'll take advantage of that to keep people in the Lumia family but using Nokia X as a feeder system into our Windows Phone strategy," Elop says.
The strategy isn't meant for the US where cellular carriers widely and generously subsidize the price of high-end phones in order to lock customers in to long-term contracts, he says.
Microsoft fleshed out this strategy more at Mobile World Congress, where it announced that it has lowered its hardware standards for Windows Phone, making the phones cheaper for OEMs to manufacture and in some cases to install the operating system on the exact hardware they already make.
The company also announced a list of OEMs it says will produce Windows Phones: Foxconn, Gionee, JSR, Karbonn Mobiles, Lava (Xolo), Lenovo, LG, Longcheer and ZTE. These companies and its existing partners represent 56% of all smartphones in the world, says Joe Belfiore, vice president of Microsoft Windows Phone in a blog. These partners mainly sell smartphones based on other-than-Windows Phone operating systems, but the number does underscore their collective reach.
Once Nokia becomes a part of Microsoft the deal is pending closure the Nokia phones will have access to even more Microsoft features that Elop says will entice buyers. "In the context of Microsoft not only can we continue to build these great devices, but we'll have the opportunity to bring many of the other pieces of Microsoft to bear," he says. "You see a little bit of that with Nokia X and the various Microsoft services being introduced but I'm really excited about having a much broader footprint in the world..."
Tim Greene covers Microsoft and unified communications for Network World and writes the Mostly Microsoft blog. Reach him at firstname.lastname@example.org and follow him on Twitter @Tim_Greene.
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