Nokia and Microsoft team up: Suffering together, merging to survive?

Nokia and Microsoft team up: Suffering together, merging to survive?

Summary: Nokia's Strategy and Financial Briefing today outlined a radical shakeup of the phone giant's plans, including a marrying of Nokia phones and Microsoft's newest mobile operating system. But this could show a mutual weakness rather than a friendly partnership.


Nokia has struggled in the last few years, suggesting that the mobile phone manufacturer is in trouble. With Google's Android operating system, combined with 'viral phones' like the BlackBerry range and the iPhone, Nokia has struggled to play catch up.

But the teaming up of Nokia with Microsoft to roll out the Windows Phone 7, which was confirmed this morning, could be pouring more petrol on already burning bonfire.

And beyond the merging of simply Nokia and Microsoft phone services, Bing will power the device search facilities while Nokia Maps will become a core part of Bing Maps.

Nokia and Microsoft haven't quite merged, but for all intents and purposes, they may as well have done.

Windows Phone 7 sales have barely taken off, with numbers that have been vastly misreported by the Redmond software giant, though not escaped by our very own Mary Jo Foley. And just because this partnership will include new Nokia hardware with design-suited Microsoft software, it does not mean that the Symbian relics will disappear any time soon.

Perhaps the two coming together will provide mutual beneficiary to one another, rather than Microsoft appearing to support Nokia during its depression.

But it isn't the first time Nokia and Microsoft have worked together. Stephen Elop, CEO of Nokia, only recently departed from Microsoft where he headed the Office business division. Under his oversight, mobile versions of Office were brought to Nokia E-series devices.

While no phone manufacturer can viably compete with the iPhone, many have tried and failed. But where the iPhone fails is the innovation of Android, the world's most popular phone operating system.

Together, these forces have nearly crippled Nokia; yet though they still maintain their top spot in handset sales, the lead is narrowing.

MeeGo was reported to have been dropped by Nokia, but now says that the first MeeGo phone will ship before the end of this year. As an open-source mobile operating system, it could potentially rival Android while its new sibling, the Windows Phone 7 mobile operating system takes on Apple's iOS powered iPhone.

It is not clear when the new Windows Phone 7 powered Nokia devices will emerge, but Nokia have made it clear that existing Symbian run phones will be side-lined in favour of the new operating system.

Nokia will have a tough time working with Microsoft to convince at very least the Generation Y that Windows Phone 7 is a viable mobile operating system for long-term use, let alone tempt them away from their iPhone and BlackBerry habits.

Microsoft's power in the advertising segment is perceptively equal to that of Nokia's. Both appear regularly on television, and combined could take the unified devices into a new age.

But the one question that remains is whether Windows Phone 7 any better than the iPhone? Unless compelling arguments can be made, short of brainwashing the European population of anything Apple or BlackBerry related, the new strategy outlined today may still struggle.

As Android can be ported for free to such a wide variety of phones across the spectrum of manufacturers, the marrying of Nokia's hardware and Microsoft's mobile operating system signals a shift in the portability of Windows Phone 7 to other devices.

Overtaking Nokia's own Symbian platform, Android took the crown as the most used mobile operating system for phones worldwide. Though the numbers are still tight between the two, Nokia took a blow in the overtaking.

It would make sense for Nokia to join the Android clan and ditch Windows Phone 7 altogether. If it's Android consumers are after, both Nokia and Microsoft are gambling that the two can come together to make Windows Phone 7 successful.

Then again, at least there is a new strategy. Anything is better than before today when there seemingly wasn't one. But the problems Nokia had and still has will not be cured overnight, and will probably seep into next year regardless of the new strategy announced today.

Topics: CXO, Enterprise Software, Nokia, Software, IT Employment

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  • RE: Nokia and Microsoft team up: Suffering together, merging to survive?

    The question is, will Microsoft be able to release OS versions every other 6 months like Google does? Is Microsoft going to give Nokia the licence to innovate like Google does? Is Microsoft going to give away Windows Phone 7 for Free like Google does?

    if they can give away WP7 free, and come out with new stuff every other 3 months like Android OEMs do, they, I think they've got a chance. If else... tough time for MSFT ahead.
    • RE: Nokia and Microsoft team up: Suffering together, merging to survive?

      @tatiGmail Well, if I find out any more later on, I'm sure either I or Adrian Kingsley-Hughes will chip in! :)
  • Is Android really free??

    Can ZDNET bloggers and columnist do a story on the real TCO of Andriod for a manufacturer like HTC, Samsung or Motorola. I believe when Microsoft sells the license of WP7 to manufacturers for $5, MS also shields them from any potential lawsuits realted to the OS. But with Android, when Oracle is suing google for copying code, they can also happily sue the manufacturers for using the OS with copied code, isnt that right?

    Also why is Android married to Google products, if they really want to make it free and open then make the OS totally browser, search, mail client and maps agnostic so that other providers can add their stuff.

    And also what about monopoly, since Google's Android is the most dominant Mobile OS, their pushing Google products is monopolistic, isnt it?
    • RE: Nokia and Microsoft team up: Suffering together, merging to survive?

      @DontBeEvil I'll forward this on - I'm sure someone wouldn't mind giving it a go.
    • Will that work?

      They could spend the $5 saved on lawsuit insurance. By straight commerce, Microsoft's lawsuit insurance can't be worth more than the $5 they charge for it.
  • RE: Nokia and Microsoft team up: Suffering together, merging to survive?

    Nokia handsets ( I've had 5 I think since 1995 - latest was E65) have always been top notch and the only reason I changed to iPhone was the symbian os. I think that combining WP7 with Nokia hand sets and Nokia's global presence, that MS doesn't have in mobile, will be a great match. This will now probably be my replacement for my 3GS I suspect depending on product release timetable.

    Sink Nokia, sink..

    Until you wake up to a market share
    that has fallen below 3rd place worldwide
    as Androids take over the entire planet.

    Then you will wake up and join the Android army.

    Until then, sink Nokia, sink..

    I cannot understand why Nokia doesn?t realize that
    Microsoft is good only for Windows on PCs.

    The disappointing WP7 sales, the tetris like WP7 interface
    and less than 10,000 Apps compared with close to 300,000 Android Apps
    will keep WP7 at the bottom of the
    worldwide market share for years to come.

    Samsung, Motorola, HTC, Sony Erickson
    went Android and became successful.
    Why not Nokia?
    With an innovating, custom, eye candy
    Android user interface they can easily
    penetrate the US market.

    It would have been better for Nokia to go
    BOTH Android AND WP7
    and see which one will sell more.

  • Oh dear

    So their phones will be what Samsungs WP7 phones are now? Is Samsung's Wp7 phone selling?

    That's a pity, I had hoped he's get Nokia's act together and drive their product forward, instead of another OS switch.... and he's delivered.... yet another OS switch.
    • RE: Nokia and Microsoft team up: Suffering together, merging to survive?

      To even imply that Samsung is as big around the world as Nokia is, is pure stupidity. Nokia sold something like 400 million phones last year...when MS gets all those phone running WP7, thats a huge up swing any way you cut it.
      • Samsung are the *second* biggest

        @timotim,<br>Samsung are the second biggest and catching up quickly. (Nokia 31% market share, Samsung 20%) so yes the fact Samsung can't sell WP7 is significant.<br><br>Keep in mind Samsung have sold 5 million Wave phones with their own bada OS, and 10 million of the Android, so they're doing well in the Smartphone segment, and in theory if WP7 was a winner, they'd be doing well with that too.
  • Really Zack? Reall?

    Thats your headline?
  • Good decision

    Piling into Android like everyone else would have been a mistake. Nokia + win 7 is a distinctive package which seems more coherent and less fragmented than Android rivals. With Win phone 7 you get updates direct from MS meaning you can install that cool new game you've just seen. As a gaming platform Win 7 is already exceeding Android whose app store is still weak in terms of both quality and quantity.
    The Star King
    • RE: Nokia and Microsoft team up: Suffering together, merging to survive?

      @The Star King
      Most so called "mergers" are only a disguised hostile takeover of one company by another. This alliance between Microsoft and Nokia might be the exception to the rule. As far as I can tell, this is a great win-win for both companies.
  • RE: Nokia and Microsoft team up: Suffering together, merging to survive?

    Why are all these posts actively anti-microsoft? I loove microsoft and i more than just looooove nokia.... noone can understand the build quality of nokia. i literally drop my phone 3 times a day. but it has never even suffered a scratch. it had suffered two pen leaks and had big blue patches on it. but mysteriously they were gone after 7 days. wow... their camera is awesome. when i say nokia IS good...

    and pleeez... i don't want any ZW to comment on this post. i hardly comment at all. certain affections are ok. but to such extent that one always eats apples?? really?? i believed at a tech site i would get unbiased opinions... but sorry the author doesn't inspire me with confidence. and i don't need explanations for it. :)
  • Might it mean dirt-cheap smart phones for employees?

    Most companies are "Microsoft shops" for email, authentication, etc. Where before they issued their employees with Nokia "Classic" unsmart phones worth about ?20, is there any chance that these will gradually be replaced with W7 smart phones? If so, that could be a really vast market. If on the other hand it would be too expensive (in economically troubled times), then Nokia and Microsoft wouldn't gain a lot. Only time will tell.