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[qi:083] Updated: The deal expected to be announced between Nokia  and Microsoft today, which would see Microsoft adapt its Office products for Nokia smartphones, would be is a desperate play. But not nearly desperate enough. The pact, by which Microsoft hopes to boost the fortunes of […]

[qi:083] Updated: The deal expected to be announced between Nokia  and Microsoft today, which would see Microsoft adapt its Office products for Nokia smartphones, would be is a desperate play. But not nearly desperate enough. The pact, by which Microsoft hopes to boost the fortunes of its Office software (threatened by Google, Linux and smaller companies like Zoho), and Nokia hopes to crank up sales of its smartphones (under siege from Research in Motion’s BlackBerry and the iPhone), is akin to taking two leftovers from your fridge, popping them on a plate and hoping people find the combination appetizing. Perhaps when the two companies hold their conference call today at 11 a.m. ET they’ll at least announce a special sauce to bring this whole mess together.

When it comes to the smartphone market, which is not only growing during the economic downturn, but is allowing Apple and RIM to walk away with 31 percent and 35 percent of the margins in the handset industry, respectively, Nokia needs to do something to protect its margins, if not its market share. Nokia sells a lot of phones, but most of them are cheap and carry low margins. So this deal with Microsoft, designed to appeal to the corporate customer, is clearly Nokia’s attempt to sell more high-end phones to enterprises.

But as partners go, Microsoft is an uninspired choice. The two firms already compete to put their two different operating systems on mobile phones — Microsoft has the increasingly less relevant Windows Mobile while Nokia is backing Symbian. And Microsoft’s Office software for mobiles is unlikely to give the BlackBerry a run for its money. After all, the email experience on a Windows Mobile phone isn’t terrible, but it’s not great, either.

As for Microsoft, its bet on Nokia isn’t much safer. Nokia retained its position as the top smartphone vendor in the world in the second quarter, according to global data out today from Gartner. But it’s seen its dominance erode over the last 12 months, to 45 percent market share from 47.4 percent.

So what we have is two behemoths that are feeling threatened by Apple, Google and Research in Motion hoping that combining their two products makes them stronger competitors. Heck, maybe corporations will like that.

gartner

Microsoft Business Division President Stephen Elop and Nokia’s Executive Vice President for Devices Kai Öistämö talk about the deal here:

http://www.microsoft.com/presspass/silverlightApps/videoplayer2/standalone.aspx?contentId=Nokia_News1&src=/presspass/videos/playlists/2009/08-12Nokia.xml&WT.cg_n=videoplayer&WT.z_convert=embed

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  1. It’s like two nerds in high school trying together to be as cool and good at football as the quarterback

  2. Latest News » Blog Archive » Microsoft-Nokia Pact: Logical, But Not Necessarily Appetizing Wednesday, August 12, 2009

    [...] Go to Source / watch movie [...]

  3. Microsoft, Nokia will bring Office apps to cellphones | csmonitor.com Wednesday, August 12, 2009

    [...] response to the partnership on the blogosphere has been mixed. Over at GigaOm, Stacey Higginbotham says “as partners go, Microsoft is an uninspired choice. The two firms already compete to put [...]

  4. Stacey Higginbotham can you do us a favor and stay away from the internet please? Your post was so full of horseshit, one has to wonder what you are smoking.

  5. Nokia’s Microsoft Deal: How Truly Focused is it on Open Source? | Geek & High Tech Wednesday, August 12, 2009

    [...] As GigaOm notes, the pact between Microsoft and Nokia–purportedly aimed at staving off the increases in market share that Research in Motion has seen–"is akin to taking two leftovers from your fridge, popping them on a plate and hoping people find the combination appetizing." Windows Mobile, the traditional platform that businesses interested in Microsoft’s mobile Office applications have run, has been increasingly threatened by both RIM and Apple in the smartphone market. While RIM and Apple don’t have huge market share among smartphones, they focus on the high end of the market, and their share of the industry’s profit margins is large and growing. [...]

  6. This bold, visionary move will win the PC week gold award for innovation, if it is ever 1998 again. Poor old Nokia. It thinks Microsoft is going to help it. The only way that will happen is if Finland applies to the Gates foundation for a grant to cure malaria.

  7. Nokia ditching Symbian for Maemo and Microsoft? Wednesday, August 12, 2009

    [...] Note: GigaOm has an article with additional market share information for Microsoft, Nokia, Apple and [...]

  8. That’s good news for Nokia users.

  9. “increasingly less relevant”

  10. two big players technology companies made big deal.

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