Nokia pledges smartphone future to Windows

Nokia has announced a partnership with Microsoft that will see the software firm’s Windows Phone platform adopted as the handset vendor’s primary smartphone platform. The news comes in a week when speculation over Nokia’s strategy was driven to fever pitch after a leaked memo from CEO and former Microsoft executive Stephen Elop revealed the depth of the crisis facing the Finnish firm.

Once a peerless leader in the handset space, Nokia has lost its way in the vital smartphone sector as other players, Apple and Google chief among them, have redefined the game. Microsoft’s recently launched Windows Phone platform is the result of an overhaul of its own mobile strategy, which had also faltered.

Under the new partnership some of the two firms’ core products and services will be combined. Microsoft’s Bing search engine will power all Nokia search functions, while Nokia Maps will be integrated into Bing, to create a competitive offering to Google’s search, location and advertising proposition.The two firms’ application stores will also be combined as Nokia and Microsoft prepare to try and retake the ground that has been lost to Android and Apple. “Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivalled global reach and scale,” said Stephen Elop. “It’s now a three-horse race.”

The benefit to Nokia, a handset vendor without a smartphone platform, is clear. For Microsoft, Nokia’s scale and distribution offer an unrivaled route to market. “Nokia would contribute its expertise on hardware design, language support, and help bring Windows Phone to a larger range of price points, market segments and geographies,” the firm said in a statement.

“The partnership announced today provides incredible scale, vast expertise in hardware and software innovation and a proven ability to execute,” said Microsoft CEO Steve Ballmer. Analysts have suggested that Microsoft is keen to control much of the Windows Phone experience, leaving handset vendors with little opportunity to modify and differentiate. Indeed the collaboration between the two firms casts Nokia very much as a manufacturer of hardware. But Nokia said in its statement that it would “innovate on top of the platform in areas such as imaging.”

The fate of Symbian is less clear, and Nokia’s language in addressing it was circuitous. “Symbian becomes a franchise platform, leveraging previous investments to harvest additional value,” the firm said. There is a huge installed base of Symbian handset users and Nokia can ill-afford to alienate the faithful if it is to rebuild its desirability in the high end. “This strategy recognizes the opportunity to retain and transition the installed base of 200 million Symbian owners. Nokia expects to sell approximately 150 million more Symbian devices in the years to come,” the firm said.

Meanwhile Meego, platform developed by Nokia and Intel, will now become open source. Nokia said that the platform would be focused on next generation devices, although it reiterated that it would ship a device based on the platform this year.

It will now be interesting to watch how Microsoft’s other vendor partners react. Key players like Samsung and HTC have become leading lights in the Android space and such a close tie up between Microsoft and Nokia may well dampen what enthusiasm they have for Windows Phone.

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