Stephen Elop, CEO of Nokia, defended the company’s choice to use Microsoft’s fledgling Windows Phone platform over Google’s near-dominant Android, by stating that rival handset players are “worried that the Android device manufacturers’ profit margins are getting reduced.” According to a Dow Jones Newswires report, Elop cited Peter Chou, chief executive of HTC, as one of the parties worried about the effect competition is having in the Android space. While HTC is one of the leading Android device vendors, having offered a number of devices powered by this platform, the company also has a long-standing relationship with Microsoft, and currently also offers Windows Phone 7-powered smartphones.
At the GSMA Mobile World Congress earlier this year, Elop said that the decision to support Windows Phone rather than Android was intended to avoid the creation of a duopoly in the smartphone market, dominated by Google/Android on one side and Apple on the other. However, with the company now having marked out its Symbian OS as a legacy platform, it is losing market share before its first Microsoft-powered devices are ready for customers. In contrast, Android volumes are going from strength-to-strength, with tier-one vendors such as Samsung, LG Electronics, HTC, Motorola and Sony Ericsson using it as their smartphone platform of choice – and with aggressive players such as ZTE also offering devices using the OS. This is creating tough competition which is suppressing handset prices, limiting the profit margin of manufacturers.