Nokia and Microsoft form partnership
Nokia has joined forces with Microsoft in an attempt to regain ground
lost to the iPhone and Android-based devices. The deal will see Nokia
use the Windows phone operating system for its smartphones, the company
said. It means that Nokia's existing operating systems will be
sidelined.
Nokia's Chief Executive Stephen Elop revealed that there would be
"substantial" job losses as a result of the tie-up.
Nokia will remain "first and foremost...a Finnish company. Finland is
our home and will remain our home," he said. But job losses around the
world, including in Finland, will be inevitable, he added.
"So Stephen Elop has pushed Nokia off that now infamous burning
platform he described to staff some days ago and into the unknown. His
chosen lifebelt is Windows Phone 7, a new smartphone operating system
that has won critical praise but, so far at least, only a tiny share of
the market.
So Nokia is moving from an ailing system Symbian - which still has a
large chunk of the market - to a fledgling which has yet to prove
itself, made by a firm with a poor track record in mobile.
Why then, did Elop not opt to go with Google's Android, the operating
system with momentum behind it? Perhaps he feels more comfortable with
the culture of Microsoft, where he worked until joining Nokia.
The cruel verdict from some is that two turkeys don't make an eagle -
but you can't fault Elop for his audacity. This is a huge moment which
could shape the future of an industry."
Speaking about the new partnership with Microsoft, Elop said that
"the game has changed from a battle of devices to a war of ecosystems.
An ecosystem with Microsoft and Nokia has unrivalled scale around the
globe," he said.
Microsoft's Chief Executive Steve Ballmer was also present at the
launch, underlining the importance of the deal to the computing giant.
"Nokia and Microsoft working together can drive innovation that is at
the boundary of hardware, software and services," he said.
Microsoft's Bing will power Nokia's search services, while Nokia Maps
would be a core part of Microsoft's mapping services.
The new strategy means Nokia's existing smartphone operating systems
will be gradually sidelined. Symbian, which runs on most of the
company's current devices will become a "franchise platform", although
the company expects to sell approximately 150 million more Symbian
devices in future.
"It is a transition from Symbian to Windows phone as our primary
smartphone platform," said Elop. Windows may not be the exclusive
operating system for Nokia tablets though. Elop was at Microsoft before
joining Nokia "We reserve the right to introduce tablets using other
platforms, including ones we may be working on internally," he said.
There was no specific announcement about when the first
Windows-powered Nokia phone will be available.
Elop revealed that the firm did consider a tie-up with Google's
Android operating system. "We spent time with our colleagues at Google
and explored the Google ecosystem but we felt we would have difficulty
differentiating within that ecosystem," he said.
It was also revealed that talks with Microsoft only began in
November, illustrating how quickly the deal has been pushed through.
Future clashes The move away from Symbian is a brave decision for
Nokia, according to experts.
"This is a clear admission that Nokia's own-platform strategy has
faltered," said Ben Wood, an analyst with research firm CCS: Insight.
"Microsoft is the big winner in this deal, but there are no silver
bullets for either company given the strength of iPhone and Google's
Android," he added.
Nokia's share of the smartphone market fell from 38 percent to 28
percent in 2010, according to monitoring firm IDC.
Nokia's upcoming Meego operating system will also be sidelined.
According to the company statement: "MeeGo will place increased
emphasis on longer-term market exploration of next-generation devices."
The MeeGo platform was expected to form the core of Nokia's future
smartphone and tablet strategy.
The company says it still plans to ship one Meego device by the end
of 2011.
For Magnus Rehle, the Nordic managing director of research firm
Greenwich Consulting, Nokia may have difficulty juggling its three
operating systems: Windows, Symbian and MeeGo.
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