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8/21/2014
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Microsoft, Opera Partner On Phone Browser

Opera Software's Opera Mini browser will replace Nokia's Xpress on Nokia feature phones, but Microsoft's long-term plan for old Nokia products is unclear.

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Microsoft and Opera Software announced a deal Thursday that will make Opera Mini the default browser on all Nokia Series 30+, Series 40, and Asha feature phones. Opera Mini will replace Nokia's Xpress browser, which now appears to be a casualty of the restructuring and layoffs that Microsoft enacted after it acquired Nokia's device business.

The partnership's long-term implications are unclear. Microsoft reportedly plans to leave the feature phone market within the next 18 months, and instead focus on smartphones. Given that Opera is unlikely to displace Internet Explorer as the default browser on Windows Phone devices, the deal appears to involve mostly short-term benefits.

For Opera, those benefits potentially include adding millions of new users to its existing base of a quarter billion Opera Mini users. According to Opera CEO Lars Boilsesen, whose company announced better-than-expected earnings on Thursday, the deal will be profitable from the start.

[Is Amazon's first smartphone a flop? Read Amazon Fire Phone Slow To Ignite.]

Microsoft, meanwhile, gets flexibility to realign resources while supporting existing Series 30+, Series 40, and Asha customers. Two-thirds of the 18,000 layoffs Microsoft recently announced involve former Nokia employees. With so many jobs eliminated -- and most of those that remain focused on Windows Phone -- Microsoft likely didn't see the sense in continued Xpress development.

"The agreement with Opera will enable us to provide continuity of service as we transition from Xpress Brower to Opera Mini," Microsoft VP Rich Bernardo, who leads the company's legacy phone business, said in a statement

Starting in October, current 30+, 40, and Asha users will be prompted to download Opera Mini. New devices from the factory will ship with Opera Mini pre-installed.

Because Nokia remains a strong brand in emerging markets, many expected Microsoft to use feature phones to funnel users toward Windows Phone devices. To some extent, Microsoft appears to be following this plan. Company execs have emphasized that emerging markets represent Windows Phone's greatest potential for growth, and a rep confirmed to The Next Web that Microsoft will bring Microsoft services such as Skype and OneDrive to Nokia-branded feature phones.

Even so, Microsoft quickly killed off Nokia X, a product line that combined a forked Android OS with Microsoft services and was similarly pitched as a way to funnel entry-level buyers into the Windows ecosystem. Last month, Microsoft corporate VP Jo Harlow reportedly said in an internal memo that most feature phone development would enter "maintenance mode" -- an 18-month period during which the company would support existing customers while moving toward a "controlled shutdown of services."

In the statement announcing the deal with Opera, Microsoft's Bernardo affirmed short-term commitment to feature phones but avoided long-term statements. "We continue to sell and support classic first and feature phones as well as the Asha range," he wrote.

Microsoft has not officially confirmed when legacy feature phone services will be dropped. Further confusing matters, earlier this month, Microsoft launched the Nokia 130, a Series 30+ handset that sells in developing markets for only $25.

"While our smartphone strategy is now exclusively focused on Windows Phone, we will continue to offer a portfolio of low-cost mobile phones (which we dub 'first' devices)," Doug Dawson, vice president of media relations for Microsoft devices, said in an interview. "There continues to be strong demand for these types of products, particularly in emerging markets. The recently announced Nokia 130 is one of these 'first' devices. For the time being, these products will continue to carry the Nokia brand which Microsoft has licensed for several years.  Regarding feature phones -- which offer higher specifications than first phones -- this is the category of products we have put into maintenance mode."

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Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio

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PedroGonzales
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PedroGonzales,
User Rank: Ninja
8/24/2014 | 1:53:10 PM
Re: feature phones
Phones for emerging market seems to be an important market .  It could be an area where microsoft can gain some advantage over other provides.  As we all know their number in the smarphone market are pretty low. 
Michael Endler
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Michael Endler,
User Rank: Author
8/21/2014 | 7:06:58 PM
Re: feature phones
Feature phones were a big part of Nokia's revenue—so big, in fact, that it really makes you rethink why Microsoft bought the company's device business. Microsoft must have been really afraid that the other OEMs weren't coming back to Windows Phone. Otherwise, I can't explain why they pulled the trigger, given that I don't think Microsoft every wanted to stay in the feature phone market. That market includes a lot of existing users, but very little growth potential. Microsoft probably didn't like the margins involved in supporting a dying branch of products-- hence the high headcount among former Nokia employees. Microsoft seems to think it has a better chance just getting people in emerging markets to buy cheap Windows phones, rather than trying to leverage the Nokia brand to convince feature phone users to upgrade. That said, products like the Nokia 130 suggest this attitude will ebb and flow over the next couple years.
Thomas Claburn
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Thomas Claburn,
User Rank: Author
8/21/2014 | 6:44:15 PM
feature phones
So this deal affects feature phones. Are these still a meaningful portion of the market? Perhaps abroad?
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