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Nokia Partners with Microsoft Around Windows Phone 7

by Abel Avram on Feb 11, 2011 |

Nokia has announced a broad strategic partnership with Microsoft to integrated Windows Phone 7, Bing, Office, and XBox Live with their phone devices.

Nokia’s phone market share dipped from 36.7% in Q3 2009 to 28.2% in Q3 of 2010, over the span of one year. This prompted Nokia to react. They did so by changing the CEO with Stephen Elop, former head of Microsoft’s Business Division, in September 2010. Major changes were expected if Nokia were to maintain a leading position in the booming phone market, and they have come.

Reports of an internal memo from Nokia’s CEO to employees surfaced earlier this week. Elop was very open and direct. He compared Nokia with a burning platform in the North Sea, and the only option is to jump off the platform into the unknown:

We too, are standing on a "burning platform," and we must decide how we are going to change our behavior. …

There is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem. …

And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry's innovation to its core.

Let's not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally - taking share from us in emerging markets.

Then Elop mentions internal developments at Nokia, complaining about having great innovation inside the company but being brought to market too slowly:

We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.

At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms.

But the main problem seems to be the lack of an ecosystem, according to Elop:

Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem. This means we're going to have to decide how we either build, catalyze or join an ecosystem.

This is one of the decisions we need to make.

This report which was published first by Engadget seems genuine especially in the light of the new announcements coming from Nokia. Following is an outline of decisions made by Nokia:

  • Nokia will partner with Microsoft to create a new global ecosystem for mobile devices offering devices, tools and services for consumers, operators and developers
  • Nokia will make Windows Phone 7 their main mobile platform, and they will influence Phone 7’s future development, the two companies building their mobile strategy and roadmaps together
  • Nokia will use Bing as the search engine and Microsoft’s adCenter for advertising services. As a result of this move, Microsoft will use Nokia Maps
  • Application development for Nokia Windows Phones will be done with Microsoft tools
  • Nokia will integrate their app store with Microsoft Marketplace

This strategic alliance is not just a major change for Nokia with potential benefits in the future, but it is also a much needed boost for Microsoft’s lingering platform, Windows Phone 7. Microsoft’s OS will now be installed on hundreds of millions of Nokia phones.

Nokia has also announced organizational and management changes. There will be two distinct divisions inside Nokia, Smart Devices and Mobile Phones, each with “profit-and-loss responsibility and end-to-end accountability for the full consumer experience, including product development, product management and product marketing.” The Mobile Division will materialize the partnership with Microsoft while Smart Devices will target the high-end smartphone market, including Symbian smartphones and MeeGo computers. It is not clear if all Nokia phones will come with Windows Phone 7 in the future because an important product line, called Series 40, will continue to have “enhanced Java support and new SDKs”, according to a Nokia blog post.

Steve Ballmer, Microsoft’s CEO, added in a joint statement with Elop that this partnership will also include Office and XBox Live.

As a side note, Vic Gundrota, VP of Engineering at Google, commented on Nokia and Microsoft’s alliance: "Two turkeys do not make an Eagle".

It remains to be seen how effective this strategic alliance between world’s largest phone manufacturer and world’s (former) largest software developer will be. One thing is sure, this move is a disruptive one.

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From Bad to Worse by Sasa Vender

I think they made a mistake. They should do both Android and Windows Phone 7.
This way they will be consumed by Microsoft.

Re: From Bad to Worse by Dan Tines

Disagree. Android already had a big manufacturer pool in a fragmented market. Nokia would be just "another" player. With Microsoft, Nokia will be able to influence the direction of WM7.

I predict RIM is getting worried too. Once the younger generation no longer sees Blackberry as THE corporate phone, RIM will build their phones on top of Android. They're already doing some kind of compatibility layer.

Re: From Bad to Worse by Faisal Waris

Android is bit of a risk because of Oracle litigation.

WebOS could have been an option.

Cool, now if only... by Francois Ward

Now if only WP7 had an HTML5 capable browser so developers making web applications (as opposed to native) optimized for newer smartphones didn't have to handle it as a special case, we'd be golden.

Landscape's changing by Martin N

There's now way too many players in mobile space - HP/Palm's webOS, Android, iOS/OSX, Symbian, Blackberry OS + QNX (their latest purchase), and Windows Phone 7.

The trendsetter and the most advanced of all of these as far as stability, integration, brand recognition is iOS - everyone else followed suit, no one quite as successfully as Google and Android.

In this announcement I see an opportunity for the little green droid to put the final nail in the Nokia/Symbian coffin by buying RIM+QNX, destroying Blackberry OS & QNX, and converting RIM into a valuable hardware manufacturer - let's face it, they can make snazzy looking phones ... This will immediately bootstrap Google in the #1 position as far as market share goes by phasing out QNX + BB OS and rolling Android out on to every future BB device. There's a one-to-one match for all the apps on Blackberry Appworld to Android Market, with comparable quality - and at least a one-to-many overall with not so decent quality apps on Android Market.

The only serious contender Google will have at that point is Apple. Unless Jobs has groomed his executives to carry the torch once he completely retires (or passes), then Apple may be at risk of losing dominance too. Jobs is like a cult figure - for a good reason, he's freakin brilliant, visionary and deserves everything he had coming to him in the last 10+ years. Imagining Apple without Jobs, at least for me, is very difficult - so I'm betting on a wait 'n' see... Steve is going to leave everyone a good legacy - it'll be theirs to screw it up.

Google also has a huge gorilla on its back, the Oracle lawsuit, which smells like a cross-licensing agreement in the works - which means Oracle taking a piece of Google's ass or duking it out in court until someone "wins"... While Google and Oracle are at each other's throats, you can bet your bottom penny that their competition won't stand still.

The alternative for Google is to turn Go into a DalvikVM compiled language and substitute Go for Java, which bears C resemblance, scales well (goroutines), has GC, etc. That way they come out winners even if they "lose" the lawsuit w/Oracle and chances are, devs are going to love Go and adopt it quickly just as Java was adopted quickly when Gosling touched everyone's nerve back in the early 90's successfully.

In the end, Symbian will be dead, webOS & Windows Phone 7 marginalized and irrelevant, and Android and iOS will reign supreme....

Anyone else have their prediction? Come on - I thought this thread would generate 10x the responses :).

Re: Landscape's changing by Martin N

Since Google's taking on the tech world these days, while they're on top of their game, they could definitely help Canonical & Mark Shuttleworth develop Ubuntu on Wayland, given that a bunch of their developers are internally using a customized Ubuntu version (GUbuntu). In doing so, they replace the X legacy for the next 20+ years by gently phasing it out. Wayland can act as a X display server and an implementor of the X protocol. Not sure where that leaves their "Chrome OS", but given Ubuntu's _enormous_ popularity, dropping "Chrome OS", or I should say, dropping and trimming just a tad of the Google engineering hubris, sounds like an awesome strategy for GOOG.

Google already set the world free by making Android open/free, and if they can do the same for Ubuntu/Linux and create a killer PDF/PS-based GUI such as OS X's, they can set the OS world free, along with Canonical at the helm as their lead.

I'm willing to look at Google ads for the rest of my life if they're up for this. And once they've doubled their current market cap, and made Larry and Sergey into gazillionaires, those two ought to then become reverse tithers like Rick Warren and give away 90% of their income to Bill & Melinda Gate's foundation (just as Warren Buffet did) and be remembered for a long time after that by everyone on the planet who ever touched a computer.

Microsoft will be at version Windows 10 or 11 of their NT kernel by then, if all goes well....

Re: Landscape's changing by Dan Tines


The alternative for Google is to turn Go into a DalvikVM compiled language and substitute Go for Java, which bears C resemblance, scales well (goroutines), has GC, etc. That way they come out winners even if they "lose" the lawsuit w/Oracle and chances are, devs are going to love Go and adopt it quickly just as Java was adopted quickly when Gosling touched everyone's nerve back in the early 90's successfully.


You've got it backwards. It's mostly Dalvik that O
racle is suing over. Oracle wants a piece of the Google mobile pie


In the end, Symbian will be dead, webOS & Windows Phone 7 marginalized and irrelevant, and Android and iOS will reign supreme....

Anyone else have their prediction? Come on - I thought this thread would generate 10x the responses :).


Symbian will be dead, but I would bet anything that you're wrong about WM7 being marginalized and irrelevant. Three always seems to be a magic number, there's a huge base of .NET developers, and Microsoft seems to get things right after a couple tries. Everything I've seen about Windows 7 phones, is that they're no joke.

look forward to the suceess of both by Tarzan Wang Tarzan Wang

look forward to the suceess of both

Re: Landscape's changing by Sasa Vender

Android and iOS are the only two serious players now, with Apple being two generations infront of everyone else. While this is a great move for Microsoft, it remains to be seen if it's enough. They'll keep burning the money, because they have it, and they just might get the piece of the pie. Symbian and MeeGo are out of the picture now (Symbian was dying anyway), and I don't see the bright future for webOS or Blackberry either. While webOS or WP may be good products from tehnical point of view, it's not the only thing that drives the market. Android will become like PC with lots of cheap devices, while iOS will take the High End market, like Mac. Tablets will replace desktops and laptops, except in IT. It would be interesting to see Google making the devices and how would that play out. It's probably the only way to get close to Apple quality.
I'm saving this to see if it'll end up like "640K ought to be enough for anybody" :)

Re: Cool, now if only... by Charles Cherry

Didn't Microsoft recently announce that WP7 will have IE9 in its next update?

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