Posted by Antti Pekkanen:

Nokia’s epic fail with Symbian, Elop’s ineptness to communicate a new smart phone strategy and a general slowness in operative execution in all fronts, has left the outside observers in a state of full and total confusion. What is happening and why this ‘fly-or-die’ WP strategy were chosen even though many other less risker, but still potential strategies would have been on the table.

Situation goes even more twisted now, when the only Meego phone, N9, has been recently launched and almost all reviewers has given it a very postive feedback – even, which is well known of its biased and patriotic views. User experience based on buttonless swipe action has been described as – really intuitive, natural, fluid, fresh, completely and utterly irresistible and, as natural as anything the smartphone world has yet introduced.  Clearly Nokia has created something that would be far too stupid to just throw away.

Fortunately, there is path that can make sense and explain at least some of these oddities. What if it is so that that the increased R&D efforts in low end mobile phone range, the propriatery S30/S40 OSs, are related Meego or better to say Maemo 6 and its next versions. Namely,  N9 is not actually a Meego phone, it is Maemo 6 with a very distinctive separation with Meego OS. Instead of it being Fedora based and having an RPM package management like the true MeeGo OS, Nokia N9′s Meamo 6 OS uses a Debian-based linux with DEB package management just like the N900. This means that Meego never reached commercial level, N9 is just a next version of Nokia’s Maemo Linux project which started already five years ago. So if Meego was too late and too little for smartphone segment and therefore deserved a death sentence, why not to keep Maemo 6 and make it the next low end segment OS. Meego is dead, long live Maemo!

Maemo could replace S30/S40 operating systems while HW performance are increasing and low end phones are able to run it. This is not in a distant future but is here today. Nokia just revealed new Asha series which runs on S40 with 1GHz processors, just like N9!  Low end mobile phones are more like smartphones very soon. Maemo is a license free, lightweight and easily down- and upscaleable for each and every HW setup and price point.  Qt development tools would be ready to compile Symbian and linux apps, forming already a sizeable low end application ecosystem. A simple fact is that WP7 can never be really profitable in sub 100$ phones. Already Microsoft licensing fees make sure of that in addition to resource requirements and processor architecture restrictions WP7 puts on mobile phone hardware.

This would also really leverage Nokia’s undisputable asset: Clearly over 1 billion daily Nokia users, a number that will easily be 2 billion by 2015. Recent 3Q2011 figures show that Nokia’s low end phone business is running strong. It is selling in high volumes, with a very low average price point (32eur) but still making over 10% net margin. That is something Chinese copy cats can’t do.

There are already some hints to this direction. Nokia is porting a very popular maps applications to S40 making it more like smartphone kind of OS.

However, the ‘project Meltemi’, which leaked out lately, shows that Maemo adoption to the low end phones is really strongly on cards. Meltemi is most probably Maemo 7, just like Harmattan was a code name for Maemo 6. That way Nokia could utlize all remarkable R&D efforts they put on N9 development, like the praised swipe UI, and really leverage it through “next billion” users.

This strategy is wise also in terms of competing against Apple IOS and Google’s Android. As it is well known, it is much easier to move up from low end market than to move down from high end market, basically in every high technology sector.

What about WP7? Honestly, I don’t know. It’s entirely different story and just as risky as market currently considers it.