The phone revolution that is under way at the moment is insanely interesting and continuously full of buzz about directions, failures, and promises. The movement started with Apple completely reinventing what a smart phone was all about and now we have the followers. Though – don’t dismiss the followers, they are usually the ones that come out with the leap frog products when most of the world is thinking about jumping on. Remember the often used analogy – the USA invented the TV – but it was Japan that took it to the next level and now all TVs are from somewhere else other than the USA.

Really there are two camps for the phones – the Cool Kids and other kids that no one wants to hang out with anymore. When it comes to cool – for some reason, the phone is an important part of that factor. Everyone wants to show their phone and its configuration (apps installed, etc) to their friends as a sign of (1) “I have money” and (2) I have smarts/tastes/style/etc when it comes to my applications that are on my phone.

For those that don’t know – the Cool Kids include:

• Apple – this is quite obvious as everything Apple produces is in the cool camp. Just having an Apple product on your person means you can dance.
• Google – this is one of the more interesting releases as they have created something called Android (which in it’s own right is a major brand in itself).
• Microsoft – you might be saying “Really, Microsoft is cool?”. I would argue that they are indeed cool as it is now associated with XBOX 360, Kinect, and Windows 7. Gone are the days of Bob and that silly paperclip.

Well – that’s it. There is nobody else I would stick in that camp. The other kids that weren’t picked for that dodgeball team include:

• Nokia
• Motorola
• Palm
• Blackberry
• and many many more

The sad part of all this is that no matter what this second camp does now, it won’t be able to get out of this bucket easily. They will always be associated as yesterday’s technology and that association will drive the sales of the phone purchasers of the world. For those in that group, the only possible way out is to get invited to the cool club by one of the cool club members in the hope that their coolness somehow rubs off. To me, this is the move that Nokia is making. They are at this point where they have realized that they don’t have the full scope of the required end to end solution to make this all work. They have the plants to build the phones and the reach of the retailers that sell what they have. What they are missing is the proper operating system for the new world of multi-touch form factor phones. Even the companies that come up with some sort of new operating system for this type of new device, they are still associated with the yesterday and lack the developer community behind them to be the real wave of adoption that this market needs.

Think about that – this is a major different between Nokia/Blackberry when you compare it to the likes of Apple, Google, and Microsoft. These three powerhouses having a very large and strong development community that will eagerly take on new initiatives using the skillsets that they have already cultivated over the years of already working with the company. This then results in a plethora of applications that are then placed on an app store of some kind. The developer gets a cut and then Apple/Google/Microsoft then get their cut. It is definitely a win-win. None of the other phone companies and wannabies can provide the same results.

What Microsoft was missing was the major phone manufactures coming on board to create and push forward with the phones that are required to start the wave. This is where Nokia can come in and help Microsoft. They have the ability to promote the Windows Phone operating system on a new wave of phones. This does mean that Nokia will sell phones, but they lose out on the application store that they might have been thinking about making some money on as well as controlling the end to end solution.

What is interesting is in questioning to oneself if Microsoft will purchase Nokia. It really depends upon how they want to compete and with whom Microsoft views as the major competitor. For instance, they can purchase Nokia and have their own hardware company and distribution network for phones – thereby taking on a model that is quite similar to Apple. On the other hand, they could just leave it up to the phone hardware companies such as Nokia and others to build and promote phones in a model that is similar to Google. Both ways have pluses and minuses.

If they own the phone manufacturer, they really can put some thought into the design and technical specifications of the phone that is really designed to exactly how they want it. Microsoft has shown that they have this ability – especially with the XBOX initiative they have done over the years. Think about how good and powerful they have moved forward with XBOX – and I am not talking about just copying what others are doing, but coming up with leapfrog products that are steps ahead of everyone else. Though, if they didn’t do it themselves, they could then leave it up to the phone manufacturers to drive each other to build better and better phones that run the Microsoft OS – competition drives better products. We have seen this with the Android line of phones that are out there on the market.

I have read a lot about Nokia investors really upset about the new Microsoft relationship – but really, this is a great thing. I for one am a fan of this relationship (I am also a Nokia stock holder btw). This will mean better days for Nokia.