Ups and downs of Microsoft cellphones from Nokia to Surface Duo

Born in 1838 into a family that cared deeply about education, Fredrik Idestam went to study at the University of Helsinki. In college, wrote The Nokia Revolution, he befriended Leo Mechelin, a campus activist who was determined to fight for Finnish independence.

However, despite being friends with campus activists, Idestam had different interests. Like his father, he was more interested in engineering than in politics. Even in 1863, when lecturing was on break, he traveled to Germany, to be precise to Mägdesprung.

Idestam didn't come there to relax but to visit a factory to see the process of transforming pulp into whole paper, a production mechanism by German technicians Friedrich Gottlob Keller and Heinrich Voelter.

At the factory, Idestam believed he could create a similar process in Finland. His belief was proven. Two years since his visit to Germany, he founded Nokia, a forest product processing company. Nokia produced wood pulp, paper, matches, cellulose, and plywood.

Because Finland in the late 1860s really needed processed forest products, Nokia was flooded with orders. However, as a new company, it lacked capital. So, in order to catch up with the standing demand, Idestam tried to borrow capital.

It was at this point that Mechelin came to help. Idestam's foresight, and the capital Mechelin provided as well, had resulted in success. Between 1895 to 1913, Nokia processed forest products of 2.9 to 7.3 tons.

Its income increased from 1.2 to 3.6 million Finnish markkas, the currency of Finland at that time. Nokia, in short, hadn't only succeeded in securing the forest products market in Finland but also abroad.

In the early 1900s, Nokia wasn't only in the forest products business but also penetrated into telecommunication cable technology. Years changed. Nokia penetrated into the electrical sector, and in the 1910s, synergized with Kaapelitehdas, a specialized cable production startup founded by Arvid Wikström.

Nokia, which was originally headquartered on the outskirts of the city, moved to Helsinki, the capital of Finland, and was growing. Finally, in the early 1990s, Nokia entered the business that made its name famous, the cellphones.

Jorma Ollila, former CEO and Chairman of Nokia, in his memoir entitled Against All Odds mentioned that the success story as a company that connected people around the world with cellphones started at the end of 1991.

At that time, Nokia introduced the 101 as a fight against Japanese and American companies, especially Motorola, which had come a long way. The Nokia 101 was an analog phone using the latest communication protocol called GSM.

GSM allowed Nokia to take advantage of telecommunication networks from cellular providers almost anywhere in the world. Because it carried GSM, according to Ollila, Nokia had fast access to the US, European, and Asian markets.

Not surprisingly, the 101 was in demand. From the 101, Nokia released its next series, with the most famous being the 3310, a cellphone that was believed to produce a more powerful explosion than nuclear if dropped.

From the 101, aka feature phone, aka stupid cellphone, Nokia released the Symbian operating system, to MeeGo. Unfortunately, when Nokia was at its peak, a man who was a fan of black turtlenecks, blue jeans, and white sneakers, rocked the mobile world with the iPhone in 2007.

The man was later identified as Steve Jobs. Less than a year since he launched it, the iPhone was on the rise. Shortly thereafter, the world of cellphones was shaken again after another man named Andy Rubin introduced Android.

Nokia was in trouble. So, in 2010, an executive named Stephen Elop was appointed as the new CEO of Nokia to replace Ollila. In a book entitled Transforming Nokia, Risto Siilasmaa stated that Elop asked Nokia to clean up and immediately produce a cellphone that could answer the iPhone and Android challenges.

Unfortunately, Nokia didn't know how to answer the iPhone and Android challenges. Feature phones couldn't be expected against smartphones. Symbian was old, and MeeGo, an operating system co-developed with Intel, wasn't perfect.

Siilasmaa said Elop finally launched Plan B, which only had two ends, joining Google to participate in developing Android phones or adopting the remaining non-Nokia operating system, Windows Phone.

Nokia kept contacting Google, asking the search engine giant to give privileges to the king of cellphones to help develop Android. Unfortunately, because Android had been successful, especially after being supported by Samsung, Google was reluctant to provide the requested privileges.

Without features, Elop thought Nokia would be far behind, especially because Samsung had already developed Android. If they were adamant about adopting Android, the latest Nokia mobile phones would probably be in 2012 or 2013.

So, of course, Nokia finally docked with Microsoft. This decision was opposed by a consultant from McKinsey & Company who was hired by Nokia to see their prospects in the future. According to the McKinsey consultant, Nokia's decision to adopt Windows Phone only resulted in two scenarios: If successful in gaining at least a 30 percent share of the mobile market, Nokia would survive and continue to be king; If that failed, Nokia was finished.

In 2011, the Nokia-Microsoft collaboration phone named Lumia 800 was born. As predicted by McKinsey consultant, Nokia as the king of cellphones ended. In the following years, Nokia sold its mobile business unit to Microsoft, Elop's second achievement after selling Macromedia, the company that created Flash, to Adobe Inc.

According to Siilasmaa, Nokia failed to beat the iPhone and Android because Windows-based phones were priced too high. In fact, the main base of Nokia's strength was India, Pakistan, China, Brazil, Indonesia, Nigeria, Egypt, and Russia, which were countries whose population was very price sensitive.

On the other hand, many Chinese companies produced cheap Android. Not to forget, another major failure of Nokia was Microsoft. When viewed carefully and in the shortest possible time, there are fundamental differences between Microsoft-Google-Facebook and Apple.

Microsoft, Google, and Facebook are companies that create application software that is translated through products such as Windows, Office, Gmail, Android, and Instagram. On the other hand, Apple is a company that creates whole software and hardware products.

Remember, Steve Wozniak, the co-founder, single-handedly soldered all the components and almost wrote the entire firmware code for Apple I, Apple's first product. With this fundamental difference, it was easy for Apple to give birth to a complete iPhone cellphone, a combination of hardware and iOS of its own creation.

On the other hand, Microsoft, Google, and Facebook have had difficulties in their history when they wanted to create complete products, especially about creating cellphones. Despite its status as the owner of Android, Google cannot stick Pixel as the king of cellphones and be unable to compete with Samsung, Huawei, and even Xiaomi.

A similar fate has befallen Facebook in collaboration with HTC. The Facebook Phone, aka HTC First, failed miserably on the market. Microsoft actually has a similar ending to Google and Facebook in terms of mobile phones.

But what interesting is that Microsoft never seems to give up. Microsoft's endeavor to rule the cellphone world was actually going on in the same way they controlled computers: licensing. With a licensing system, Microsoft stood on its main strengths in creating software and delegating hardware creation to its peers.

In 2002, for example, long before the iPhone and Android, Dell released Axim, a personal digital assistant that used Windows Mobile, a forked version of the Microsoft computer operating system. A technology journalist of The New York Times stated that Microsoft's strategy to dominate the world of cellphones by licensing Windows Mobile in its early days actually worked.

In the world, Windows Mobile PDA controlled a significant market share. In 2007, when the iPhone was introduced to the world, Windows Mobile controlled 60 percent of the market share. Unfortunately, PDAs, not the Windows Mobile, carried a strange concept.

PDA was fitting to be called a smartphone but failed to bring the spirit of the iPhone or Android. As a mobile phone, the PDA wasn't compact. Even if it was called a computer, the PDA wasn't powerful. Plus, PDAs were taken too seriously.

This device was widely used by corporate executives to support work. There was no element of fun as could be found in entertainment applications like the iPhone and Android. When the iPhone and Android were born, PDA and Windows Mobile were finally abandoned.

Failed with Windows Mobile, Microsoft created the Windows Phone. At the beginning of its appearance, Windows Phone wasn't treated like Windows Mobile. Instead of licensing the software, Microsoft made its own hardware and immersed Windows Phone in Kin, the machine they made in 2010 after acquiring Danger, a company that had a history of making Hiptop.

Unfortunately, Kin failed. The New York Times reported that Microsoft stopped selling the Kin only 48 days after its launch. Because, Kin, which was created and aimed for teenagers, failed to attract the attention of young people.

Finally, Kin and Windows Phone were expected to be replaced by another product called Windows Phone 7. Failed to create a complete product, Microsoft finally returned to its original license standards.

Windows Phone 7 came along with Nokia's despair in facing the iPhone and Android. As written at the beginning, Microsoft's attempt to regain control of the world of mobile phones, coupled with Nokia's confusion, finally resulted in a product called Lumia 800 in 2011.

Unfortunately, back to the book Siilasmaa wrote, the initial version of the Nokia Lumia was quite expensive, so it failed to recapture Nokia's main power in developing countries. In addition, Windows Phone 7, he said, failed to localize itself.

When Android and iPhone immediately presented various language choices, Windows Phone 7 only served English. This simple fact kept Nokia Lumia out of place in countries where the population didn't speak English.

What most intriguing was the fact that application developers were reluctant to create a version of Windows Phone 7 even though, in the end, some did. WhatsApp, for example, only appeared on Windows Phone in version 7.5. Instagram only appeared in 2013, two years after the Nokia Lumia 800 arrived.

Meanwhile, in Jean-Louis Gassée's presentation for Quartz, the failure of Windows Phone 7 couldn't be separated from Microsoft's traditional licensing strategy. Because they had to pay, the cellphone companies weren't interested in Windows Phone 7.

In fact, Android came free of charge. Practically, apart from Nokia, only HTC, Samsung, Dell, LG, and ZTE used Windows Phone 7. As a result of Microsoft's failure to manage Windows Phone, Nokia was a victim.

Nokia sold its mobile phone business unit and its patents to Microsoft for 7.6 billion dollars. As the owner, Microsoft then continued the struggle for Windows Phone alone, ditched the Nokia brand, and released the Lumia 535 in 2014.

The world was slowly leaving feature phones. Microsoft also sold its Nokia feature phone business to HMD Global for 350 million dollars. HMD Global licensed the Nokia brand to its original owner Nokia Oyj. Oyj is the Finnish term for public companies like Inc.

Even though Microsoft finally had Nokia, because the weaknesses of Windows Phone failed to be fixed, Lumia failed in the market. In 2017, Microsoft closed the story of Lumia's journey. Since then, Microsoft had never given birth to mobile phones.

But in 2020, in the midst of the COVID-19 pandemic, Microsoft has kicked off by releasing cellphones again. What unique is that the new cellphone isn't powered by Windows Phone or an operating system made by Microsoft but uses Android.

Another unique thing is that the process of creating cellphones isn't continued by the division that inherited Nokia but by Microsoft Surface, a business unit that creates a cool laptop or tablet to compete with the MacBook.

So, the Surface Duo was born. In his interview with Wired, Panos Panay, the father of Surface, said that his computer was a project to reinvent laptops. This project was executed on the grounds that Microsoft failed to get a cool impression about laptops.

Cool for laptops, before Surface came, fell in the hands of the MacBook. Why does Microsoft want to create cool laptops? This is part of the changes that Microsoft's CEO promised since 2014. At that time, when Satya Nadella was about to release Windows 10 in 2015, he promised to make changes not only in the company's inner circle but also about the way the public viewed the company Bill Gates and Paul Allen founded.

They wanted to move on to changing the views of those who used Windows not only because they needed it but because they chose it. Later, people would use Windows because they loved it, Nadella stressed at that time.

Nadella's intention to change Microsoft was implemented through a company reorganization. For example, he changed the name of the Windows and Device Group division to the Experience & Device, which was in charge of Windows, Office, and the new star in the Microsoft family, Surface.

The Surface is actually an old product from Microsoft. It wasn't born in Nadella's day but when Steve Ballmer was still in power. At that time, in 2012, Surface was born to make sure Microsoft took part in the tablet business.

The President of the Windows Divison, Steven Sinofsky, saw that Google, Amazon, and Apple already had tablets first. According to him, Google used tablets to collect data while Amazon released them to lead people to shop, and Apple made them an extension of the iPhone.

Microsoft must immediately respond to the challenges of its competitors. Then Surface was born. Initially, Surface came in a lightweight form. The first Surface RT tablet didn't have the power of a laptop and used Windows for the ARM architecture version of the processor.

According to Ars Technica, this tablet couldn't even run almost all Windows applications ever made. Panay then cleaned up. Microsoft had finally released a more powerful Surface that was closer to what it meant to be cool.

They launched the Surface Book, Pro, Laptop, and Go. Later, they returned to bring the ARM processor to launch the Surface Pro X. And finally, the Surface Duo was born, an Android phone that had a shape similar to the Samsung Galaxy Fold.

Why doesn't Duo use a Windows Phone? Well, the operating system wasn't something that mattered to them anymore, Nadella claimed. Panay himself, as he told The Verge, said that Android was chosen because this operating system ecosystem had been successful in the world of mobile phones.

Because on Android there were hundreds of thousands of applications, and people wanted them, Panay said. On mobile, everything was about the application, not the operating system, he added later.

Panay said that the work on Surface Duo was also assisted by Google. So, he also claimed users would feel the advantages of Microsoft and Google from this device. But even though it carried Android, he emphasized that Windows was still very important for Microsoft.

It's just that the world of cellphones is much more suitable for Android, not Windows. Meanwhile, according to the Editor-in-chief of The Verge, Microsoft aims to present an Android-based cellphone to patch the hole in the world of mobile phones.

With Android, Microsoft can force users to keep using other Microsoft products. Microsoft failed to win Windows Phone, but don't forget they have Office to beat Docs, Teams to beat Slack, Edge to beat Chrome, and Bing to beat Google.

These products can be won by joining the Android extended family.