Nokia Finally Drops Its News: It’s Microsoft

Stephen Elop and Steve Ballmer (use this one)

The news everyone has been waiting for has finally come out: Nokia (NYSE: NOK) has done a deal with Microsoft (NSDQ: MSFT), where Windows Phone will become the primary operating system for Nokia’s smartphones. The deal will bring brands like Bing and Xbox to Nokia devices.

The news was first announced on Nokia’s blog, in a post co-bylined by Stephen Elop and Steve Ballmer, and lays out the details of a “broad strategic partnership”.

Lots of questions that are not answered yet: Microsoft’s Marketplace will be the new app store on the devices, but does that mean Ovi will disappear altogether? What happens to Symbian and MeeGo, Nokia’s existing platforms? And what happens to Microsoft’s other partnerships for devices, such as those with Samsung, HTC and Dell?

The details direct from the blog:

»  Nokia will adopt Windows Phone as its primary smartphone strategy, innovating on top of the platform in areas such as imaging, where Nokia is a market leader.

»  Nokia will help drive and define the future of Windows Phone. Nokia will contribute its expertise on hardware design, language support, and help bring Windows Phone to a larger range of price points, market segments and geographies.

»  Nokia and Microsoft will closely collaborate on development, joint marketing initiatives and a shared development roadmap to align on the future evolution of mobile products.

»  Bing will power Nokia’s search services across Nokia devices and services, giving customers access to Bing’s next generation search capabilities. Microsoft adCenter will provide search advertising services on Nokia’s line of devices and services.

»  Nokia Maps will be a core part of Microsoft’s mapping services. For example, Maps would be integrated with Microsoft’s Bing search engine and adCenter advertising platform to form a unique local search and advertising experience.

»  Nokia’s extensive operator billing agreements will make it easier for consumers to purchase Nokia Windows Phone services in countries where credit-card use is low.

»  Microsoft development tools will be used to create applications to run on Nokia Windows Phones, allowing developers to easily leverage the ecosystem’s global reach.

»  Microsoft will continue to invest in the development of Windows Phone and cloud services so customers can do more with their phone, across their work and personal lives.

»  Nokia’s content and application store will be integrated with Microsoft Marketplace for a more compelling consumer experience.

Ballmer and Elop note that the finer details of the partnership have yet to be worked out. There is a full strategy day planned today, which should give more detail. MocoNews will be covering it.

In a separate announcement Nokia has outlined the details of its new executive leadership and company structure. We’ve covered it here.

The news comes after weeks of speculation, based on alleged insider leaks, about what Nokia was planning to unveil during its strategy presentation to analysts and investors later today. The rumours regularly alternated between complete management reshuffles; ousting most of Nokia’s old guard in favour of fresh talent and fresh ideas; opting for a new operating system or either all or part of Nokia’s line of smartphones and feature phones using Android or Windows Phone 7; abandoning or keeping existing OS platforms MeeGo and Symbian.

Om Malik, quite rightly, observes that at its heart Nokia is a hardware company. The emergence of software, and the ecosystems that develop around it, as a cornerstone — not the only one, but a significant one — to the future of mobile devices has been a major challenge for the company up to now.
But will today’s announcement really change much? It has to be reiterated that Nokia still has a very large share of the market and that might take a couple of years or more to truly get dire.

Nokia today might have put events into place that will change that. Now all eyes are on the company like never before — if Nokia gets it right, they can nudge that market share needle in the right direction. Getting it wrong could send it into freefall.


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