In business, as in war, chess, and first dates, it’s always good to have an exit strategy, a backup plan to disentangle yourself if things go south. This backup plan is infinitely more important if you’re struggling. And Nokia is definitely struggling. Like many phone companies that were at the top of their game when the iPhone came out five years ago, Nokia has struggled to stay competitive in the rapidly changing mobile phone landscape. Over the last year or so, the company has bet heavily on Microsoft’s Windows Phone platform.
It’s a match that made sense, really. Nokia was a feature phone company struggling to keep up in a smartphone world, and Microsoft had missed the boat with its Windows Mobile platform. Both companies badly needed a hit, and hoped to find it in the Nokia Lumia 900. While the Lumia 900 has performed decently, it wasn’t exactly a home run. Surely the next lineup of Windows Phone devices will be once Windows Phone 8 comes out later this year, right? That would certainly be best for both Nokia and Microsoft, but the fact is that Nokia can’t afford to put all its eggs in one basket anymore. To that end, Nokia board chairman Risto Siilasmaa recently told a Finnish talk show that Nokia has plans in place should Windows Phone 8 hit the market with a whimper instead of a bang.
According to Finnish news site Yle Uutiset, Siilasmaa said that while he remains confident in Windows Phone 8’s potential to perform well, the company has not put all its eggs in one basket. He declined to be more specific, however, leading to speculation about just what those plans might be. He did point to Nokia’s location services and network division, as well as the company’s large intellectual property portfolio. Those things, however, don’t seem to fit the concept of a contingency plan all that well.
What Siilasmaa likely means, then, is that Nokia is working on hardware that will run other software platforms should Windows Phone 8 flop. The obvious choice would be Android. On the other hand, the Android market is becoming a difficult place to get into. Samsung is the only really profitable Android phone maker, though Motorola Mobility’s new-found direct ties to Google are bound to make it a major player. Of course, there’s always RIM – there have been rumors that RIM would sell off its hardware business and begin licensing the BlackBerry platform to other hardware makers.
At this point, though, using RIM as your contingency plan looks an awful lot like using an anchor as your backup parachute, so if Nokia were to consider an alliance with RIM, they’d be wise to have another contingency plan in case RIM doesn’t survive until Windows Phone 8 goes thud (assuming it does).
At any rate, Siilasmaa’s lack of specificity means that this is all speculation. The likeliest candidate for Nokia’s contingency plans is Android, but unless Windows Phone 8 falls flat, we’re not likely to know anything for certain.