tequila bomb

Microsoft Corp. will pay Nokia Oyj more than $1 billion to promote and develop Windows-based handsets as part of their smartphone software agreement, according to two people with knowledge of the terms.

Nokia will pay Microsoft a fee for each copy of Windows used in its phones, costs that will be offset as Nokia curtails its own budget for software research and development, said one of the people, who declined to be identified because the final contract hasn’t yet been signed. The agreement runs for more than five years, the people said.

At a $15 per phone royalty that Nokia will be paying Microsoft, Microsoft is betting on Nokia selling 60 Million handsets running Windows Phone 7 for the deal to break even.

For some perspective: Apple passed the 100 Million iOS devices sold mark in the summer of last year. That’s iOS devices, which includes the iPod Touch and iPad, not just smart-phones.

Nokia’s executive vice president of mobile solutions, Anssi Vanjoki, let an interesting analogy go when speaking with the Financial Times today. When asked about the possibility of his company switching mobile operating systems from Symbian to Android, Mr. Vanjoki compared the prospective move to Finnish boys who “pee in their pants” during the winter months for warmth; the temporary relief acquired is soon followed by a larger issue.

From tequilabomb.

So I ask again, “What would switching to Windows Phone 7 be akin to?”. Which is exactly what Nokia announced today.

Nokia said on Friday it was teaming up with Microsoft to take on Google and Apple in the fast-growing smartphone market and set financial targets for the group.

From reuters.

To me this seems like an act of desperation. Desperation from a company that no longer has the vision to innovate.

And with Microsoft’s penchant for the colour brown, I think the new analogy is obvious.

[There's] Google’s Android Market where a leaner 100,000-plus Android apps reside. That’s up from 60,000 in May, with an average 5,000-plus added weekly. Approximately 15 percent are games (although the company would not give a more specific breakout).

Or the Ovi Store where the daily number of app downloads for Nokia smartphones just topped 3 million.

And then there’s the platform-agnostic GetJar which provides more than 60,000 mobile apps across all the major handset platforms and where the daily download rate is similar to the Ovi Store’s.

All three stores are eagerly welcoming game submissions as evidenced by recent interviews with corporate spokespeople.

Worth a read.

Apple’s legal battle with Nokia looks to have seen some setback, with staff at the US International Trade Commission (ITC) telling the judge in the case that Apple’s patent allegations are ‘unfounded’.

“The evidence will not establish a violation” of Apple patent rights, the staff, which acts on behalf of the public as a third party in the case, said in a pre-hearing memo released yesterday.

Bloomberg tells us the case will begin before Judge Charles Bullock today. Apple is attempting to have Nokia’s US phone imports banned on strength of its four allegations.

Nokia also has a case against Apple. Meanwhile, Apple is suing HTC and Motorola over Android phones, and Microsoft is suing Motorola. In fact, the mobile business is a minefield of legal fun and games, as displayed in the above info-graphic.

From 9TO5Mac.

The graph above shows just how crazy this has become.

In the end this will come down to who has the most influential lobbyists. Or who blinks first, and settles in a back room somewhere with an undisclosed deal.

Nokia’s executive vice president of mobile solutions, Anssi Vanjoki, let an interesting analogy go when speaking with the Financial Times today. When asked about the possibility of his company switching mobile operating systems from Symbian to Android, Mr. Vanjoki compared the prospective move to Finnish boys who “pee in their pants” during the winter months for warmth; the temporary relief acquired is soon followed by a larger issue.

So what would switching to Windows Phone 7 be akin to?

Pretty graphs showing mobile operating system market share in various territories.

Sure, Nokia (Symbian) is still the biggest segment in most European graphs, but RIM (Blackberry) and Apple (iOS) alternate for a firm second place in many of them, with Android gaining too.

Nokia is barely visible in the US though, with RIM, Apple and now Android all fighting for dominance.

Nokia is in big trouble, except in Spain, Italy and Germany where they still hold between 51.6% and 72.5% of the market.

Nokia, as expected, have replaced their beleaguered CEO…

And it seems like Nokia’s board just hired another CEO who is a seasoned manager, but not a consumer product visionary. So unless Stephen Elop, Nokia’s new boss, has hidden talents, he may represent more of the same for Nokia — which would be a disaster.

No shit!

Let’s trace through his career: Nothing exciting the last couple years as the Office boss at Microsoft, nothing that consumers would ever care about as COO of Juniper Networks, and then sales functions at Adobe and Macromedia.

The mind boggles. Perhaps he was cheap.

I give him 12 months, tops.

A chart comparing the total handset industry profits since 2005 captured by:

1) Apple (light blue), and

2) Everyone else (RIM, Nokia, HTC, Sony Ericsson, etc.)

Apple will generate 2X as much handset profit as the rest of the industry combined this year despite selling only 3% of the handsets by unit volume.

Puts it in perspective. If I was Nokia I’d be looking for a new CEO.. oh wait.

What are the rest of the competition doing?

Mobile phone maker Nokia Corp. has launched a search for a new chief executive, people familiar with the situation said Monday.

The move comes as the current chief executive, Olli-Pekka Kallasvuo, struggles to find traction for the company in the market for high-end smartphones.

While Nokia continues to sell more cellphones than any other manufacturer, it has failed to keep up with advances by such rivals as Apple Inc. and makers of smartphones running Google Inc. operating software.

I touched on this in May.

When assistive technology researcher Dr. Cliff Kushler contributed to the development of the T9 predictive text input system in the ’90s, he helped pave the way for a major breakthrough in mobile messaging. T9 became ubiquitous on feature phones and is still widely used today on mobile devices with conventional numeric keypads.

T9 Predictive Text Input was what made Nokia’s the best mobile phones on the market. And probably what made texting the core phenomenon of cell phone culture in the UK and Europe.

Originally devised as head-tracking system and later adapted to touchscreens, the Swype keyboard allows the user to input text by moving a finger in a rapid sweeping motion over a qwerty keyboard, sliding in order over the letters that form the desired word. The software will analyze the path of the user’s finger on the screen and compute possible word matches. This system allows users to input an entire word without having to lift their finger from the touchscreen surface. It offers a considerable boost in typing speed relative to conventional touchscreen keyboards.

This could be big.

Instead of hitting each key individually, you just move your finger or thumb over the keys in succession. The software will draw a line that follows your movements, tracing your finger through the keys. When you lift your finger after tracing over a word, the software will compare the traced letters with the contents of its dictionary and look for a match.

I still remember today how I felt the first time someone showed me the mysterious T9 setting on my first Nokia, and how it revolutionised the way I input text. Prior to that I had been laboriously keying in every letter of every word on my Motorola.