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Nokia and Microsoft Looks Like a Desperate Hook Up

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Nokia’s (s nok) new leadership under ex-Microsoft (s msft) executive Stephen Elop has reportedly met with Microsoft to plan a line of Nokia phones that would run the Windows Phone 7 software. This is according to Russian blogger Eldar Mutarzin, a noted tech writer with connections inside Nokia. The two sides may just be chatting, as all big companies do at some point (see Google (s goog) and Nokia) but the prospect of Nokia hardware sporting a Microsoft OS is intriguing, because it would signal a major shift on Nokia’s part, suggesting it needs serious outside help in getting its smartphone business in order.

That it would turn to Microsoft is also curious, though a little less unlikely now that Elop joined Nokia as CEO. Microsoft’s Windows Phone 7 software just launched, and early sales don’t appear to have taken off, despite some generally positive reviews. Tying the company to Microsoft’s nascent platform, even for one distinct line of phones, would go against the words of outgoing Mobile VP Anssi Vanjoki, who dismissed the idea of building phones running Android (s goog), saying it would be like a boy peeing in his pants for warmth. Why would Microsoft be different?

If anything, it’s less proven in the marketplace and still in the process of adding some basic features. Nokia has also said the future is in its MeeGo operating system for high-end smartphones, and is pushing its Symbian 3 operating system. Symbian 3 is still raw compared to iOS (s aapl) and Android, and Nokia is hoping its QT development framework will help unify the platforms for developers. Pushing Microsoft would only muddle the picture for Nokia software developers unless Nokia can tie Windows Phone 7 into QT.

But turning to Microsoft could be helpful for a company that has been slow to gets its smartphone act together. The company just delayed the release of the E7 after the N8 also slipped its launch date. As my colleague Kevin pointed out, Nokia likely pushed back the release of the E7 to improve its software experience, suggesting that Symbian is still in need of a lot of work. Meanwhile, MeeGo isn’t set to launch until mid-2011, which will put Nokia further behind its rivals.

Utilizing Microsoft could just be a stop-gap effort until Symbian 3 and MeeGo really find some momentum, or it could be a test for Nokia as it looks to support other operating systems. Either way, Microsoft’s OS may be a more attractive alternative than Android for Nokia. It is, despite some deficiencies, very polished and it would seem to have fewer patent concerns, something Google’s Android is having to deal with. And it could give Nokia a way to break into the U.S. market, where it has almost no presence. Nokia has great hardware; it just needs some good software. Meanwhile, Microsoft could use all the support it can get in trying to become relevant on smartphones again.

Ultimately, if Nokia goes this route, and there’s no guarantee it would, it would show a lot of desperation. It’s crazy to think the world leader in smartphones still doesn’t have a credible answer yet to the iPhone (s aapl), more than three years after the iPhone’s launch. My advice for Nokia would be to develop something in-house so it doesn’t become a commodity smartphone player and isn’t dependent on a third-party for its software. But if it can’t get its own smartphone OS plans together, something it failed to do in the last three years, turning to Microsoft might be its best play. With market share declining in the face of iPhone and Android sales, it’s clear Nokia needs to do something.

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21 Responses to “Nokia and Microsoft Looks Like a Desperate Hook Up”

  1. I hope out of all of this that someone will make the decision to allow Windows phones to synchronize with Microsoft Outlook again, like they used to. If that happens, it will have been all worth it.

  2. It does not make a lot of sense to me. What would Nokia be using WP7 for? Compete in the high-end? I thought they were betting on Mee-go. Compete in the mid-tier/low tier?
    WP7 is not an OS that can go down to mid-tier and low-tier phones while Android can.
    The only way to save Nokia at this point would be to buy MOT mobility prior to the MOT split to win the NA market, get the android integration skills and leverage the massive volume to become the lowest cost producer of android Smartphones for the masses. Too bad Nokia is too busy adding “value” on top of his hw by badly execcuting on devices (N8), os (S^3) and developer ecosystem (Ovi).
    Further analysis at

  3. Its their best chance.
    Then again they will likely not to succeed. And the bigger they are the harder they fall. Its natural selection at its best. The stronger DNA wins.
    I really don’t know anyone who would consider anything besides Android and iPhone. Even my corporate offers me now an option to register my Android as an official handset (where BB was the only option till now).

  4. Nokias latest smartphones are straight forward, the company has closed the gap to a relevant degree. It seems like the Finns started to learn faster and to shorten the time to market. Nonetheless there are remaining issues.

    Microsofts Windows Phone 7 software marks a big step ahead as well. But I can’t image Nokia phones with Microsofts OS. There is a difference between HTC or Samsung creating Android phones or Nokia creating the hardware for Windows Phone 7. HTC and Samsung are known as trusted hardware providers for whatever OS but Nokia is primarily known as a full service mobile manufacturer and many costumers would – as you properly assessed – sensitively notice such an extensive shift.

    On the other hand a shared research and development centre (Nokia + Microsoft) probably wouldn’t worry anyone. Both could benefit from new ideas and developments.

    Nokia should change but it shouldn’t change to much. Especially because Nokia apparently is doing quite well with Symbian^3, MeeGo (cooperation with Intel) and at its new marketing direction at the moment.

  5. The world doesn’t need another Android OEM. Nokia is doing the smart thing by dumping Symbian and going to Windows Phone 7. Nokia could make inroads into the Enterprise space since WP7 has Office apps built in. In a little over one month, Window Phone 7 has over 4000 apps and growing. Why put all your eggs into Symbian 3 or MeeGo? Symbian 3 and MeeGo are long shots at best.

  6. Its a crying shame that it even appears to come to this. I have been in on the Internet tablet scene for a while now and have tried to be patient for Nokia’s great hardware to be married to a great OS. Time and time again the Meego hype falls short and as it will, the rest of the world moves on.

    It kills me to say it but I think I am going to get off this train at the station and get on the Android express. Sorry Nokia, you just dragged your heels way to long.

  7. 1 + 1 = 0

    I think this is a really nonsense. Nokia has a serious investment in Meego and it is extremely unlikely WP7 would do anything but further dilute their software and ecosystem efforts.

  8. Jabberwolf

    You guys dont get it.
    Droid , IOS and now WM7
    are the future that has little to do with a phone OS !!!

    Symbian has little future as its only a good mobile OS – but small ties to web centric services.

    MS – has warm reviews and is not locked down to specific phones. It has the widest development to run on the most amount of hardware. This is what Nokia is looking at.
    Ms also has the best plan for synchronized services and data. Better than Apple or Google.

    The only thing lacking are some features that MS has hidden and will release in January and the apps. MS already doubling its apps every 2-4 weeks.

    • Christopher

      I’m fairly certain that Android has the widest development to work with the most hardware. The WP7 hardware requirements are actually quite specific. There really is no low end WP7 hardware, quite unlike Android. this is useful in hitting multiple price points for different markets.

  9. This is the dumbest “rumors” I have ever heard. Just check your facts. What is the market share of WP7? And then look at Symbian’s market share. Why in the name of God Nokia would change its platform to Windows Phone 7? To marginalize itself even more? Would you believe rumor that tell you that Microsoft will replace Internet Explorer with Google Chrome in the next Windows update? I highly doubt that.

  10. Hi Ryan,

    I actually think this is a fairly well balanced “What if” article. I very much doubt it will ever happen but it would be stupid of MS and Nokia not to at least talk it through.

    I’d agree with Mark A, The E7 delay has been reported by Nokia as being a hardware issue.

    Also I don’t think Symbian needs as much work as you seem to think that it needs. According to Nokian I follow on twitter the N8, C7 and C6-01 are all selling very well so the buying public don’t seem to have much of a problem with it too, but we’ll know for sure when the q4 results are released.

  11. “This is according to Russian blogger Eldar Mutarzin, a noted tech writer with connections inside Nokia.”

    I think you need to keep up with development, Ryan. That was true in 2008, it isn’t now.

    I’d also point the delay is hardware based, most likey the slider mechanism. This has been confirmed by Nokia.

    Perhaps you should leave the phone reporting to Kevin?

  12. Come on now, all this grudge holding russian pseudo journalist has to do is make up stuff and misinterpret others and all of a sudden it warrants an article like this?

    It aint gonna happen.

  13. this is nonsense and unacceptable.

    Stephen Elop was brought to bring back nokia to number one spot but unlike he Sold nokia to MS..

    He is one Spineless Leech. Such kind of guys are like pimps and not CEOs