Nokia's Deep Investment in MeeGo

Even as it puts Microsoft software in smartphones, Nokia continues to spend on its MeeGo open-source platform in hopes of developing a proprietary ecosystem for handsets, tablets, and netbooks

Nokia's new strategy to use Microsoft's software is both Plan A and Plan B for the Finnish handset maker, but Plan C may stand for "costly." The company is reportedly paying out bonuses to keep developing its MeeGo platform.Today's Mobile Business Briefing blog says salary increases and bonuses are going to developers and engineers in the MeeGo area in order to maintain progress on the first MeeGo handset, dubbed the N950.Although Nokia has announced plans to use Windows Phone 7 on future smartphones, the company has officially committed to deliver at least one MeeGo product this year.
Any payouts or incentives to continue MeeGo development emphasize that Nokia's eggs are not all in Microsoft's basket when it comes to smartphones—or other devices, for that matter. MeeGo is an open-source platform that can power handsets, tablets, and netbooks, which may be why Nokia isn't letting go of MeeGo just yet.Microsoft Windows Phone 7 is specifically geared toward smartphones.If Nokia has designs on expanding hardware offerings beyond the handset—something it did when it offered the Booklet netbook— Microsoft's new mobile platform won't help.

Nokia's Budget Bid for an Ecosystem

I've been critical of Nokia's strategies in the past, but a small spend to keep MeeGo alive makes sense for a few reasons.Dropping Symbian would otherwise leave the company with no operating system or ecosystem of its own; if it's ever successful, MeeGo can provide both.It can also allow the company to expand into new mobile markets with a unifying platform for phones, tablets, and computers.Even if the reports are true on incentive payouts, the MeeGo division is far smaller than any other area, so it's unlikely that a significant percentage of Nokia's bankroll is funding the MeeGo initiative.Indeed, Nokia's own long-term research and development plans, shown at its recent Capital Markets Day event in this graph, are illustrative.
If nothing else, MeeGo keeps a potential long-term option alive while Nokia reboots itself using Microsoft's new platform in the short run. The key word, of course, is "potential," for even the best strategies must be executed. Nokia had a longstanding Symbian strategy that could have worked if the company had executed in a timely fashion. Perhaps Nokia has learned a lesson it will apply to MeeGo. On the other hand, if MeeGo doesn't prove its worth within the next year or two, it could go the way of Symbian—into a painful, end-of-life transition with little-to-no return on Nokia's investment dollars.

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