The release of the Android-based Nokia X2 smartphone makes clear that Microsoft is committed to Android for the long haul. But it also reveals a big hole in Microsoft's strategy: The phone's default engine will be Google, not Bing. Will Microsoft be able to fix this hole?
The X2 is a budget phone, and aimed primarily at the developing world, which had been a traditional Nokia stronghold until the company committed to Windows Phone. So its specs aren't particularly noteworthy: a 4.3-inch, 800 by 480 pixel screen, a 5-megapixel camera, 4 GB of storage, a 1.2 GHz dual-core Qualcomm Snapdragon 200 processor, and 1 GB of RAM. It has slots for two SIM cards, and a microSD card slot for up 32 GB of storage. The suggested retail price is $134.
Although the phone has Android under the hood, it's got a tiled interface reminiscent of Windows Phone. That's no accident: Microsoft clearly hopes that people will get use to the interface, and when the phones' owners have a bit more ready cash, they'll upgrade to a Windows Phone rather than an Android device.
As with earlier Nokia Android phones, Microsoft expects to make money from it via Microsoft services, including OneDrive, Skype, and Outlook.com. But there's a serious problem as well: The default search engine is Google, not Bing. That's because Opera is the default browser, and Opera has an arrangement with Google that searches must be delivered through Google, not any other search engine. People can always download a Bing Android app, but very few people will do that.
That makes Opera somewhat of an odd choice for the browser, given that Google has to be its default search engine. But Computerworld's Gregg Keizer makes the point that Opera is well-suited for the developing world, because it compresses data, cutting down on the amount of bandwidth used. Customers in the developing world are sensitive to data-usage fees.
The problem is that a Microsoft phone without Bing as the default search engine may be a money-loser. However, there may be a fix in sight: Opera's deal with Google runs out on August 1, 2014. My guess is that Microsoft will pay Opera to either have Bing be the browser's default search engine, or at least allow it to be a default. Otherwise, Microsoft's Android strategy could be imperiled.