Summary:

We reported last week that this would happen, and frankly you could have guessed as much, but now it’s been made official: Nokia (NYSE: NOK)…

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We reported last week that this would happen, and frankly you could have guessed as much, but now it’s been made official: Nokia (NYSE: NOK) today outlined how it planned to slowly drop its Ovi mobile content brand, in favor of Nokia branding, in the lead-up to a new set of smartphones running Windows Phone 7. The news comes on the same day that a blogger claims to know Nokia is working on a deal to sell its entire mobile division to Microsoft (NSDQ: MSFT) (a rumor dismissed by a Nokia spokesperson).

In a blog post today — called an Ovi-tuary by one Twitter wag — Nokia said that it would begin introducing the Nokia-only branding with selected devices and services beginning in July and August.

Jerri DeVard, the first CMO that Nokia has ever had (she is an American who joined in November 2010, having worked at places like Verizon Wireless), explains it like this:

We have made the decision to change our service branding from Ovi to Nokia. By centralizing our services identity under one brand, not two, we will reinforce the powerful master brand of Nokia and unify our brand architecture – while continuing to deliver compelling opportunities and experiences for partners and consumers alike.

Ovi is currently used as the name for Nokia’s app store, as well as for a number of services within it, from music to maps. Nokia says that nothing in its service roadmap will be affected by the changeover.

The first devices that will see the new branding will be those shipping in July and August. Those using existing handsets that have had Ovi branding on services will start to see the switchover when software gets updated in subsequent months.

The switchover to Nokia from Ovi is not really a big surprise. Ovi only had mixed success as a brand, which some services, such as the company’s “Comes with music” music service, switching to Ovi from Nokia and still failing to find strong traction with users.

Given how poorly Nokia’s smartphones have fared in key markets like the U.S., some might even have branded Ovi a failure — although it should be pointed out that in other markets like China, the Ovi portal is still among the most popular mobile destinations.

Plus, come 2012, Nokia will have to make room for Microsoft’s many brands, from Windows Phone to Bing: the marketeers clearly decided that it would have been too confusing to keep Ovi on the deck alongside all of the rest.

The move to axe Ovi also follows with the extreme paring down we’ve seen at the Finnish handset maker: last month, Nokia outsourced its Symbian OS, which will no longer be used in the main lineup of new smartphones, to Accenture.

When Nokia debuted a new carrier-branded app store experience last week, a spokesperson told us that Nokia would continue to offer these carrier app stores as a Nokia-branded experience when the Windows Phones were launched. Now it looks like that switchover might be happening sooner than even he thought.

Are there other things going on that Nokia’s spokespeople don’t know — or are at least keeping under their hats? Today the Russian blogger Eldar Murtazin — the messenger for many outlandish but sometimes accurate rumors — posted a tweet and blog post (in Russian) that alleged that Nokia next week will begin negotiations with Microsoft about selling its whole mobile phone operation to the software giant. He goes on to say that the deal could close by the end of this year.

Nokia has issued a flat-out denial. “We typically don’t comment on rumors. But we have to say that Eldar’s rumors are getting obviously less accurate with every passing moment,” responded Mark Squires, who runs comms for Nokia in the UK.

Nokia’s devices and services division currently makes up nearly three-quarters of Nokia’s business in terms of revenues, and all of its profits. Effectively that would mean selling the company to Microsoft, and a return to Redmond for CEO Stephen Elop.

Whether it is true or not, a deal like this definitely seems possible: it would mean drawing a line under the licensing fees that Nokia would have to pay out to use Windows Phone, and it would give Microsoft some kind of business model to compete better against Apple (NSDQ: AAPL) in smartphones. It’s demonstrated success (but also failure) on devices in the past, but Nokia would bring with it more expertise than Microsoft had with the ill-fated Kin.

It also brings to mind what Steve Ballmer said about its Skype acquisition last week: the two companies were talking about an advertising deal, which evolved into an unsolicited bid for Skype. It could be the case that the same thing is happening with Nokia.

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