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Nokia on 'brink of failure', warns analyst

Prepare Plan B

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Nokia's comeback will fail unless Microsoft pulls its finger out, according to one analyst. Ian Fogg of IHS isn't isn't optimistic, however, and recommends the Finns develop a Plan 'B' - in case Windows Phone fails to crack the Android-Apple duopoly.

Fogg commends Nokia for a strong comeback product range in the shape of its Windows Phone-powered Lumias. But, he cautions: "Nokia's problem is that Microsoft appears to have stood still. A year-and-a-half after Windows Phone 7's debut, it has changed little. In effect, the gap in features between Windows Phone and Android or the iPhone has widened and not shrunk as Nokia needed it to."

Unless volumes are achieved in Q2, smartphone developers will begin to drift away, say the analysts. "With US failure, Nokia will be locked out of the premium part of the US handset market, again, and Windows Phone will need a complete rethink."

Microsoft can hardly be accused of delinquency, but it is beginning to look worryingly like a team content to rest on its laurels. The Metro designers are frightfully pleased with themselves – and can't stop telling the world how their new UI is fresh and exciting and different and fast. So, we recall, was BeOS... and that wasn't enough.

Fogg may have underestimated the developer issue. What most Nokia-watchers appear to be unaware of is that for developers, breakage lies ahead. The three bedrock components of Windows Phone 7x – the Embedded CE kernel, the Compact .NET framework and Silverlight – are all being cast aside. Windows 8 Apollo will share the same kernel as Windows 8. What third-party developers are supposed to do is not clear. Will all today's applications break? Will there be a legacy runtime? What source-conversion tools will be available? Even key Nokia sources don't know the answer to these questions yet.

And as Fogg says, developers are key. Stephen Elop has done as much as any CEO could in transforming Nokia's culture in a short space of time. But Nokia's comeback is now entirely in the hands of a few key Microsoft system architects and programmers. They need to reassure the market – a job Metro's designers are not in a position to do. ®

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