Microsoft's US$7.17 billion (S$9.1 billion) acquisition of Finnish company Nokia has given the latter a new lease of life. Rid of the highly competitive mobile phone industry, Nokia can now focus on developing new technologies.
One area is wearable computing. At its pleasant research centre located by the shores of the Baltic Sea, which I visited a few times in the early 2000s, I was amazed at the cutting-edge technologies in its labs.
Today, we put mobile phones on vibration mode. That is haptics - tactile feedback technology that lets a user feel some force, like vibration or some form of motion. Engineers told me it could be incorporated into phones but Nokia phones did not have it until much later.
Around the time of the smartphone revolution in 2007, the company built a concept phone called the Nokia Morph to showcase a future handset.
I saw the video here and was wowed. Made of cutting-edge new material, the device can bend into numerous shapes without breaking and can even be worn on the wrist. You can see right through it, electronics and all.
It is also self-charging, absorbing solar energy to charge its battery.
This phone, on which Nokia collaborated with the University of Cambridge Nanoscience Centre, was exhibited at the Museum of Modern Art in New York in 2009. Nokia believed then that the technologies could appear in high-end mobile devices by 2015.
Today, haptics is available in phones as vibration mode. But no bendable phone has arrived. It is perhaps being cooked up in Nokia's Advanced Technologies unit, one of the three divisions left after the sale of the phone business.
What Nokia Morph demonstrates is that the company has the technologies for wearable computing. It can combine new materials, and sensors with mapping and location-based services - the software services unit not sold to Microsoft - into a device which can be worn on the body. It can tell people pollution levels, areas to avoid in a flash flood and the best deal at Robinsons as you walk past the store.
It may not be worn like Google Glass, which is a mini-display worn on the head. But it could be worn on the hand, where information can be seen at a glance.
Nokia will not get involved in the cut-throat handset manufacturing business. But it can take the licensing route, providing the cool technologies to phone makers, presumably starting with Microsoft and Windows Phone.
Nokia is also looking at how its technologies can be used in the connected car, where vehicles are linked to the mobile network and the Internet. New services offered, such as online music streaming and 3-D detailed maps showing points of interests, will appear as apps - the same ones users access on their smartphones or computers. All the contacts, preferred routes and bookmarked destinations will be synchronised between devices.
This is the potential of the new Nokia. Watch these areas as Nokia recalibrates its business in the next 18 months.
At the same time, Microsoft's purchase of Nokia makes its Windows Phones more compelling. It adds heft to Microsoft's device-making ambitions.
In buying Nokia, Microsoft is following Apple and Google in having an integrated software and hardware product strategy. The idea is simple: For a great user experience, the phone must be built so that it can leverage the power of the software.
Being able to control both is thus strategic to growing the Windows Phone business, whose global market share is currently under 4 per cent.
The third element to building an integrated business is mobile apps. In this, Microsoft may not have the 700,000 apps available for Android phones, but it has the key ones, enough to entice office workers already familiar with the Windows environment.
The software giant has "appified" its desktop software such as messaging, Microsoft Office and Skype which let users access their documents, files and photos on their Windows Phones.
Said Forrester Research senior analyst Clement Teo: "Microsoft has made a compelling case for users, so that when they are refreshing their phones, the Windows Phone will be a strong option."
More importantly, said Mr Teo, Microsoft will offer carriers a way out of the duopoly presented by Android and iOS phones.
The Microsoft-Nokia deal has also thrust BlackBerry into the spotlight. This is the last independent handset maker with its own operating system. In its heyday, before the iPhone was unveiled in 2007, it was the indispensable tool of investment bankers and corporate executives.
But it was slow to move to the smartphone world of touchscreens and mobile apps. Lacklustre sales of its new line of smartphones saw its market share decline by more than 33 per cent last year, said research firm Gartner. The company has already been put up for sale.
For consumers, their choice today is now either an Android, Apple or Windows phone.
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