It appears that Nokia may be outsourcing the manufacturing of its Windows Phone 7 handsets to Compal, according to a report by DigiTimes. The move to have a third-party manufacture Nokia’s high-end smartphone is somewhat surprising considering that Nokia has built up its economy of scale through its manufacturing plants in the past, but it may show that the company is shifting its strategy from the hardware business to creating better phone and mobile experiences by leveraging Microsoft’s mobile OS.
With hardware being a mere commodity and manufacturing profit margins often small, Nokia may be investing its resources into research and development to understand, create, and deliver better user experiences on mobile platforms to stay competitive and not become commoditized in the process, which I think is a great move as there is so far very little differentiation between the various makes and versions of Windows Phone devices.
The leaked Nokia Windows Phone was shown with an outward appearance similar to Nokia’s recently announced MeeGo-powered Nokia N9 smartphone, but internally the two handsets will differ as the N9 utilizes a Texas Instruments OMAP ARM-based processor while Windows Phone 7 relies exclusively on Qualcomm chipsets.
In addition to landing the contract to make Nokia’s Windows Phone 7 devices, it seems that Compal itself has also signed a deal with Microsoft to become a licensee for Windows Phone 7. The deal would probably turn Compal into both a manufacturer and a white label designer to create handset hardware designs to license to other companies or carriers to brand as their own. Eventually, perhaps, Compal could potentially turn into an HTC, which itself had its roots as a white label brand making hardware designs for other companies and carriers; the company only recently within the last few years started to market itself under its own brand and pushed the ‘you’ ad campaign aggressively.