Microsoft With Nokia: Maybe Not As Far-Fetched As It Sounds?

Stephen Elop

It has been a while since the last time we heard that Nokia and Microsoft might work together on a device — at least a few months. So perhaps we were due for the rush of reporting we’ve seen today, based on some paragraphs at the end of a blog post in Russian, that said that behind closed doors the two companies were working on a new line of Nokia (NYSE: NOK) devices running on the Microsoft (NSDQ: MSFT) Windows Phone 7.

The post, which ran on the site, says that the alliance is Nokia’s way of getting around the problems it is facing in its high-end device segment, to offer compelling touch-screen devices to the market to better compete with the immediate threat from cheap Android-based handsets.

It points out that Nokia is also developing its own, dual-core devices but that they probably will not be ready before 2012; hence the alliance with Microsoft.

Mobile-Review gets attention here because it was one of the first sites to preview Nokia’s N8 device — well before it ever hit the market.

But this is not the first time that the two companies have been rumored to be making a device together — a rumour that became more persistent after Nokia appointed Microsoft executive Stephen Elop (pictured) to be its new CEO — although past reports have been denied by the company. To add to the speculation, there has already been software collaboration, integrating Microsoft software into enterprise-focussed devices.

For what it’s worth, Mobile-Review thinks the alliance would be a disaster, a sign of weakness at Nokia.

Yet the Windows Phone 7 OS and the apps coming with it might make for a compelling combination with a Nokia device. It’s hard to gauge how well new Windows Phone 7 devices have been selling so far — the company has yet to release official figures and guesses are all over the charts. But on the OS/software side, Microsoft actually may not be doing so bad.

A research note from IDC analyst Al Hilwa [via eweek] notes that the Windows Phone 7 Marketplace reached 4,000 apps two months after launch. “[This] has to be one of the most rapid ramp-ups in recent times, reaching this milestone faster than Android, which took from October 2008 to March 2009 to reach about the same level,” he writes.

Of course there could be other reasons for the ramp-up in apps: some may have been transferred from the previous Microsoft phone iteration, for example. And simply having apps there doesn’t mean people are necessarily using them.

But if we are approaching a time in mobile where the operating system and handset are becoming less tied to each other — a trend being pushed by Google (NSDQ: GOOG) and Android but also being followed by Microsoft — perhaps it’s not such a bad idea to consider something completely different for Nokia devices.


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