Microsoft today noted that the pending acquisition of Nokia is not yet complete as it sidestepped commenting on the Finnish firm's decision to launch a new low-cost smartphone powered by an offshoot of Google's Android. See all MWC news. View our MWC live blog.
Earlier Monday, Nokia announced a three-model line of smartphones, dubbed Nokia X, Nokia X+ and Nokia XL, that will be powered by a fork of Google's Android and come with multiple Microsoft services pre-installed.
Analysts split when asked whether Microsoft would hold onto the new Android Open Source Project (AOSP)-powered phones when the deal closes later this quarter.
The Redmond, Wash. company will face a decision -- keep the Nokia phones or kill them -- once it closes the $7.4 billion acquisition. But for now, it's not saying what it will do.
Frank Shaw, who heads corporate communications for Microsoft, took to a blog to spell out his company's position, such as it was, on Nokia's move.
"First, our transaction with Nokia has not yet closed," Shaw wrote. "Today, we operate as two independent companies as required by antitrust law, and we will until the acquisition is complete."
What Shaw was saying -- that even if Microsoft wanted Nokia X dead it wouldn't have been allowed to kill it -- had been voiced earlier by outsiders, including Hal Berenson, who last October laid out how things work between an announcement of an acquisition and the deal wrapping up.
Berenson's frequent commentary on Microsoft is closely watched, since he was formerly a Microsoft manager and engineer.
"Nokia can not change its actual plans based on the discussions with Microsoft [emphasis in original]," Berenson said two months after the companies announced the planned purchase.
Shaw also pointed out that while Nokia X does not run Microsoft's Windows Phone operating system, as does the Finns' higher-end Lumia brand, it does rely on various Microsoft services -- including OneDrive, Outlook.com and Skype -- rather than Google's. "This provides the opportunity to bring millions of people, particularly in growth markets, into the Microsoft family," Shaw argued.
But Shaw saved his most telling comment for near the end of his blog. "Our primary smartphone strategy remains Windows Phone, and our core device platform for developers is the Windows platform," wrote Shaw.
That implied that the Nokia X and its AOSP foundation would be an outlier for Microsoft, perhaps the "feeder" to Windows Phone that former Nokia CEO Stephen Elop stressed in an interview today with re/code, the website kicked off earlier this year by those who formerly ran the Wall Street Journal's All Things Digital.
Elop, who was a Microsoft executive before taking the Nokia top job in 2010 -- and among the small group thought to be in the running for the CEO spot before Satya Nadella was named -- will return to Redmond when the acquisition completes. He will then run Microsoft's devices group.
In his conversation with re/code, Elop hinted that Microsoft would retain the Nokia X. "There's a lot of people in Redmond very excited about being able to reach, literally, tens of millions of people who have no other way of having an experience with Microsoft," Elop told re/code's Ina Fried.
And those people at Microsoft should be excited, contended Ben Bajarin, an analyst with Create Strategies.
"While the Nokia X is an attractive product for first-time smartphone customers..., there is a more significant first that could play out if these devices are successful," Bajarin said in a piece published to Techpinions today. "Nokia will successfully bring potentially hundreds of millions of new customers into the Microsoft ecosystem by giving them their first Microsoft ID."
Bajarin was referring to the Microsoft Account needed to access free services, including OneDrive, Outlook.com, Skype and even the Office Online browser-based apps for doing lightweight work in Word, Excel, PowerPoint and OneNote.
He reasoned that if the Nokia X line fueled large numbers of Microsoft Account sign-ups, the Redmond firm may be able to replicate long-in-the-past moves by both Apple and Google, which used iTunes and Gmail accounts, respectively, to pull customers into their ecosystems.
"This is the most important strategic objective, in my opinion, for Microsoft," said Bajarin. "Nokia sits at the heart of Microsoft's comeback. Forking Android and going after the next billion smartphone customers may just be crazy enough to work."
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is [email protected].
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