Microsoft Windows Phone 8 leaves Nokia in fragments

Changes to software mean that even the latest mobile phones can be out of date within months. Matt Warman reports. 

In January, Stephen Elop, chief executive of Nokia, announced the company’s flagship handset. The Lumia 900 was considered the exemplar of Microsoft’s new operating system, Windows Phone. This week, just six months later, Microsoft announced a major Windows Phone update that it said would not be available to Lumia 900 owners. Nokia sold two million Lumia handsets in the first quarter of 2012 but the company's top device has essentially been rendered out of date within a year.

The move highlights the pace of technology developments, especially in mobile phones, but it also emphasises the growing problem of so-called ‘fragmentation’. This means that relatively new devices are often unable to run the latest version of the software that powers them. For software developers, fragmentation means they can’t be sure how, or even if, their applications will run successfully on the latest handsets.

Part of Apple’s dominance of the smartphone app market can be explained by its approach to limiting fragmentation. While a few of the latest features are limited to the most recent handset, Apple typically ensures that the latest version of its iOS software is compatible with iPhones that are up to two years old. The fact that the company releases just one iPhone per year makes this task a little easier.

For Android, the situation couldn’t be more different: according to analysts at CCS Insight, “chief among Android’s challenges is fragmentation: the splitting of Android into multiple incompatible variants. This has significant repercussions for users, developers, network operators, manufacturers and Google itself.

"We believe Android fragmentation falls into two categories: splits that come about through Google's own actions in releasing new versions and those driven by third parties like Amazon, Baidu and Barnes & Noble releasing their own versions. Both are prompting overall fragmentation within the Android ecosystem.”

Now, the same problem is coming to Windows Phone. While Microsoft points out that the major shift in software will bring huge improvements, it also concedes that for some time shelves will carry a range of devices labelled ‘Windows Phones’ that are in fact fundamentally different. The idea of some models being more equal than others is not attractive for manufacturers trying to encourage reluctant users away from Google and Apple. For Nokia, sales down more than half in the first quarter, it could be critical.
Indeed, according to leading retailer Carphone Warehouse, the mobile phone sales pitch is now based far more on a phone’s software than it is on its physical functions. Where previously the market was divided into, for example, good cameraphones and music phones, now it’s all about the operating system.
Graham Stapleton, the firm’s Chief Operating Officer, argues: “What was once a battle of hardware between the manufacturers, has now become a battle of software. Both customers and developers can look forward to reaping the benefits in the coming months, as Windows Phone 8 brings some much needed variety and depth to the market."
He continues: “There are some very exciting devices due this autumn sporting the new operating system, and they will be fundamental to its success.” By implication, the existing devices are now far less attractive because they will soon be usurped.
As Informa analyst Malik Saadi put it on his blog: "Operators and users will hold on until the new devices are in the market this coming autumn. This will have a serious impact on Nokia's financial performance this quarter."
For consumers, it makes the issue of when the best time to buy a new phone is significantly more tricky. Nobody, after all, wants their phone to be in fragments within months of buying it.