Nokia and Intel made an "industry changing", "joint collaboration", "strategic relationship" yesterday. Undoubtedly a PR coup for the respective marketing teams, as they have this blogger writing about it, I'd expect both teams will be secure in knowing that they have their quarterly bonuses secured.
However when we look underneath the hype, what might this mean?
On the face value it looks like Intel come off better than Nokia out of this deal:
The Intel and Nokia effort includes collaboration in several open source mobile Linux software projects. Intel will also acquire a Nokia HSPA/3G modem IP license for use in future products.
This opens the door for Intel chipsets to integrate 3G modems - so expect to see SIM card slots appearing on notebooks and netbooks. Not good news for Huawei the world leader in 3G dongles. This vertical integration has happened before - those of us who can remember when laptops didn't have integrated modems will recall the market leader in the PCMCIA modem space - one Psion Dacom, the value of their products today is clear.
So this is good for Intel as they will be able to secure their position in the laptop space (there continues to be a threat from ARM in netbooks).
So what do Nokia get out of this? Some "collaboration" on mobile linux - which is a platform that Nokia don't seem to have made a great success from just yet.
I suspect the real value to Nokia here is in the detail of the agreement - the commercial terms on licensing of Intel chips for devices. If Nokia have negotiated good terms here (and I would expect Nokia have "world beating" terms as this involves a cross licensing deal) this could mean that Nokia could have a cost advantage in the manufacture of Intel based laptop devices.
Nokia already have great supply chain, and brand - so the opportunity to take a significant market share in the PC market is there - but how to do it?
To execute fast, I'd expect Nokia to be looking at acquisitions - the most obvious candidate being Acer - with a market capitalisation of around €3bn it's feasible that Nokia could swallow a manufacturer like Acer from it's €6.5bn cash pile. If it has indeed got favourable terms from Intel then it could be earnings increasing without any additional integration work - but combine the experience and supply chain of Nokia with the same from Acer, we could see some increasing innovation in the desktop space.
Who would be Nokia's main target here? The people who are growing market share fastest in the smartphone space - Apple, rather than spend all their time defending the smartphone space against Apple, why not attack Apple at their cash cow market - the MacBook market - with a price advantage, and a strong brand, Nokia could challenge Apple's growth in the laptop market.
I await the NokBook Pro with interest.
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