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Market Insight

Nokia and Microsoft expand Windows Phone content with Sky Go launch

December 06, 2013

Abel Nevarez Abel Nevarez Research Analyst II, Mobile & Telecoms, IHS Markit

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Nokia, Microsoft and Sky Italia, have partnered to launch Sky Go on Windows Phone 8. The service will be launched on the entire Nokia Lumia product line in Italy in December. The partnership will expand Sky Go's mobile offering beyond its current iOS and Android apps, while also integrating Sky Go's bundled video services on Nokia Lumia handsets. 

With 1.9 million users, the Sky Go mobile app allows users free access to 800 on-demand movies and up to 30 pay-TV channels depending on users' Sky TV subscription. The service is available across multiple devices including smartphones, Mac, PC, and Xbox 360.

Our Take:

Nokia and Microsoft's partnership with Sky Italia underscores the effort Microsoft is making to improve Window Phone's relatively limited content line-up. The recent additions of Sky Go, Instagram and Vine have are all efforts to expand the Window Phone platform beyond its current 190,000 apps. The volume of apps is important, but even more important is that Microsoft secures locally relevant content with strong brands such as Sky Go.

Sky Italia will also help promote Microsoft's Window Phone, with 4.8 million subscriptions, Sky Italia is a very useful ally. Italy is historically a strong Nokia market and so it's a key country for Windows Phone to establish a strong market share. If Windows Phone cannot do well in Italy, then it will struggle everywhere. But even here Windows Phone has a relatively small base. IHS forecasts Windows Phone will have just 5.3% share of installed smartphones in Italy at end of 2013, compared with 4.5% in the US. Windows is breaking through in Italy though, with the installed base forecasted to grow to 8.3% by the end of 2014.

Despite the addition of Instagram, Vine and other popular apps, Windows Phone still lags behind Apple's iOS and Google's Android duopoly. Windows Phone's three billion app downloads pale in comparison to Android's 48 billion and Apple's 50 billion total app downloads to date. Also, Window Phone apps have generally lacked core features and suffered from slower updates compared with their iOS and Android versions. For example, Instagram's Windows Phone app initially launched without video capture and uploading, tagging, and in-app camera capture in a rush to launch on Window Phone.

Nokia and Microsoft still need to convince app developers of Windows Phone's viability and profitability as an alternative mobile platform to iOS and Android. In the interim, Microsoft and Nokia re right to seek out significant brands such as Sky Italia and ensure their content is available on Windows Phone.

Geography
Italy
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