Couple of days ago there was some “inside rumors” about Nokia working on an Android phone. This rumor was pretty quickly denied by the Finnish giant.

Full QWERTY and dual screens. Eat that iPhone. Also works as a fishing net weight.

It was a good rumor because it sounded plausible until one starts to seriously think about it. Yes, Nokia is one of the few handset manufacturers who doesn’t have Android plans so it just a matter of time, right? Not exactly. Sure, some might think Android is a better platform than S60 and yes, in my opinion, the current S60 UI and user experience are a crapfest but at least it’s Nokia’s own crapfest. And that’s the important thing.

The reason why other traditional cell phone manufacturers are pushing out Android phones is that it doesn’t really matter what software runs in their phones as long as it sells. And of course Android sells, because carriers finally get to bill for data usage when mobile users discover the web.

Does SonyEricsson, Samsung, HTC have a smartphone that matters? They all pump out smartphones on different platforms and don’t really focus on building an ecosystem across their phones. Their main customers are phone operators, who’ll eventually brand the phones and fill them with their own software and sell them to their customers. This is ture for Nokia too as far as Nokia the mobile phone manufacturer goes. Nokia, however, isn’t just about manufacturing hardware. Take SonyEricsson as a counterexample. As a part of Sony, SonyEricsson is more about extending Sony’s brands (Walkman, Cybershot) and not solely about mobile phones. Same goes for Samsung. Nokia, on the other hand, is a brand on its own and has interests in all aspects of mobile communication.

SonyEricsson is a good example also because it shows what would happen to Nokia if it’d adopt Android. Those who remember time when it was just called Ericsson, the company actually did have pretty nice technologies and phones. Today, that history is pretty much nonexistent in their phones.

Unlike the other phone manufacturers, but like Apple and Google, Nokia has a wide application ecosystem. Nokia is betting a lot on services, even though Ovi Store and other Ovi services haven’t caused similar nerdgasms like Apple’s Apps Store. In fact, one might say that Ovi services are a source of a lot of nerdrage instead. Nokia would also need to port its Nokia Maps and Mail for Exchange support over to Android, just to mention few. Also, why invest in Qt if you’re going Java?

The only way for Nokia to remain relevant in the marketplace is to own the software its phones and services run on. It’s about vertical integration and it’s about mattering in the smartphone market. This vertical integration is why Google and Apple suddenly matter in smartphone business. Vertical integration is why Apple still matters in the computer business.

This is also why no other mobile phone manufacturer has taken Symbian seriously. It would give Nokia, their #1 competitor, immense strategic power. The reason Windows Mobile has zero traction in mobile phones follows the same logic.

As Trip Hawkins, whose Electronic Arts was first to bypass the game resellers and went straight to retailers, has put it, “it’s all about leverage. If you don’t have it, you lose”. With Google’s recent announcement of Chrome OS for netbooks, there are many unhappy netbook manufacturers who decided to build something on Android. On the other hand, by bypassing the need for a real OS and focusing on the Web, netbook manufacturers can try to cut costs – at the expense of becoming dependent on Google.

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