Microsoft just bought Nokia for $0

Whilst at the front of the race they took their eye off for a little distraction called Symbian. The problem there was the complete lack of control over the UI. Symbian forked their UI for phone and tablet, and phone producers forked their own UIs again (UIQ, Series 60,80,90), making upgrading the existing UI centrally practically impossible. The only option was to start from scratch... oops. The committee appears to have made a big deal out of binary compatibility. Yet with today's consumer, that is not important on a smart phone, when we want to get apps from a store.

Nokia looked up and has realised it's now running on a different track to everyone else - the finish line moved and they can't catch up (3 years to get from the old UI's, and we've still not got shiny new Symbian in mass market products). Time to get into the current race.

The problem with branching Android, is that it puts them back in exactly the same sort of situation they were in when they backed Symbian. By going with Microsoft they have moved to a much more controlled system. Microsoft have buckets of experience with smart phones, and I believe that WM7 will be the XP of mobile. Let's just hope they don't Vista it.

That's what this post is: someone refusing to face the changing landscape of tech.

Mobile is greater than what it seemed to be at the start. Mobile operating systems are no longer button phones, they are computers, and they are going to integrate with the desktop tightly. That's the new world, and in such a world, there are only going to be just a few platforms.

Nokia had almost zero chance of being the new platform. Microsoft continues to maintain strong platform presence on the desktop, browser, gaming console/set-top, and they have brought in a strong mobile platform, even if sales are lack-luster now.

Android provides a free, single platform for everybody else.

Apple has their iPhone eco-system, which is not open to others to use.

If Nokia stays on their platform, they will surely fade into irrelevance, and at some point they will need to switch to Android, and be years behind all the other Android clones. That would be the end of Nokia.

The Microsoft-Nokia deal basically has given the Microsoft mobile platform relevance, and it means that a big chunk of the mobile market will be MS/Nokia, and that will ensure that Nokia remains relevant.

With this move, the integrated platform market has basically been divided into three equal chunks (Android, iOS, MS) and for the new few year people are going to have to choose between those. Nokia as a hardware manufacturer - if it does good deals with MS, will basically form one-half of the third major platform. That's how it will stay relevant.

After this deal, Android is likely going to become more popular, because most other hardware manufacturers will bet full-scale on android. However, the problem is that Android lacks a desktop environment, so canot be as tightly integrated as the other two platforms could.

So I expect Android to take the role of feature-phones now, while MS and Apple control and split the high-end market.

I'm not sure what role blackberry will play in all this.

I wouldn't try to play something like this. I've done highly leveraged, highly speculative investing successfully in the past. But even then, I was making bets on the order of weeks and months, not minutes.

Do you think it is a sure thing that nokia will be down by %20 beyond the current price over the next year? IF you can make that argument mathematically, then it is soemthing worth investing in. (at least, this is the method I used. I can't say anything about nokia's valuation as I have never analyzed it. But I only invested in mathematically sure things that were consistent with the overall trend.)

PS- When I say "sure thing" I mean "presuming no black swan events". I know there is no really sure thing. I also used leverage and hedged to limit my downside.

If their choice was to get out of software and choose between WP7 and Android, WP7 is a much better idea.