One of my favorite publications, Slate, published an all-too-common example of blindly following the consensus:
The Lumia 900 smartphone that launched yesterday has the backstory of a summer blockbuster: Two aging veterans of the tech industry, Microsoft and Nokia, team up for one last caper ... Nokia's Lumia 900 is supposed to lead Windows into the mobile promised land and upend the rapidly emerging Apple/Google duopoly.That's an incredibly thin, short-sighted and uninformed analysis of the situation. The author followed that up by speaking of logistical blunders surrounding the launch of Nokia's NOK new phone on Easter Sunday. (That sort of thing has never happened to anybody else? Think Apple and China). He concluded by arguing that "Microsoft MSFT can't subsidize hardware manufacturers to make Windows Phone products because Microsoft's whole business is selling operating systems to hardware makers." 10 Stocks That Could Rise in Market Decline >> Fair point. Google's GOOG Android is open and free. Surely, Microsoft executives never considered the conundrum the Slate scribe presents. I have. And it leads me to one of two solutions (or a mix of both):
- Give the mobile OS away for free.
- Subsidize smartphone/tablet inclusion of Windows 8 by wheeling and dealing in other areas.
People are lazy. If there's a browser already installed on their new computer -- free -- they'll likely use it, rather than go to the trouble of downloading another version. This has nothing to do with the quality of the browser or the "heroism" of Microsoft employees. Microsoft's share of the browser market would inevitably rise as consumers bought new computers and started up the default browser.10 Stocks Poised to Rise in Apple's Wake >> Granted, the author goes on to argue that Microsoft did not necessarily play fair and square. And that's really the entire point. Giants such as Microsoft and Apple often take the liberty of not playing it fair. That's one of the reasons they retain their enormity. Microsoft has not only thought of how to saturate Windows 8/Metro in the mobile marketplace, but has set itself up to do so. I almost feel comfortable guaranteeing this. Let's get beyond the obvious to something just slightly less obvious. Obvious: "Can't" is not in Microsoft's vocabulary. If you think it is, you're crazy, uninformed or blinded by Apple love. Slightly less obvious: Microsoft invested in Nokia for a reason. It needs a flagship hardware maker that needs Microsoft even more. The Microsoft partnership with Nokia is not merely an extension of Bill Gates' charitable work. Hardly. It's a shrewd move that just so happens to provide Nokia a much-needed bailout. This reality leads us to the reason why you should avoid the temptation of perceived "value" or upside in Sprint S and Research in Motion RIMM . Simply put, Sprint sold its soul to Apple. I certainly buy the argument that it had no other choice, but that only underscores the unworkable situation this disaster of a company finds itself in. Shockingly, RIM is even worse off. How to Turn Apple's Stock Into an Income Stream >> Microsoft is executing a strategic coup with Nokia. They're not teaming up for "one last caper." In fact, if you're going to get cute with words, you should refer to the Lumia launch as the pilot. RIM needed a partner. That partner could have been Sprint, but it would have made more sense for the company to pursue the rumor that it would power Amazon's apparently forthcoming smartphone. Instead, RIM went ahead with plans for BlackBerry 10 or whatever they're calling it. The second the company's new CEO (with a name you never heard of and really do not need to know) unveiled the new phones, RIMM stock took off to new lows. Expect this lack of vision to push RIM into the single digits alongside Sprint. Because companies such as Microsoft think of everything and then some, watch Microsoft flirt with $40 sooner rather than later. While I am not pouring my life savings into Nokia, it's a nice speculative derivative play on the moves Microsoft has yet to make.