On Wednesday, Microsoft announced Windows Phone 8, the next generation of their Windows Phone platform. New product announcements are all well and good, Apple does the same too, but with one striking difference.
Never pre-announce any product or software that will render current shipping products obsolete without having successor products ready and shipping. The negative outcome from this is called the Osborne effect.
What Microsoft essentially did was to announce that Windows Phone 8 will not run on current generation hardware, including Nokia’s flagship Lumia 900, which are still being sold in stores. Apps written for the WP8 platform will not run on the older hardware either. Microsoft has just single-handedly killed Nokia’s current flagship product.
Given Nokia’s already poor performing financials, this couldn’t have come at a worse time—They just don’t have a profitable product from now till WP8 is launched. If this goes on, it wouldn’t be long before Nokia runs out of cash.