As widely expected, Nokia has announced a “broad strategic partnership” with Microsoft, betting that the low-flying Windows Phone 7 platform can halt its slide.
It makes sense in that Microsoft is a software company, and Nokia desperately needs help in software. Indeed, the software development process is so beyond clearly its own competencies that Elop had no choice but to seek outside.
The financials of the deal have not been revealed, but reportedly both Microsoft and Google offered “hundreds of millions of dollars worth of engineering assistance and marketing support.”
Nokia’s statement asserts:
With Windows Phone as its primary smartphone platform, Nokia would help drive the future of the platform by leveraging its expertise on hardware optimization, software customization, language support and scale.
But Microsoft’s smartphone market share fell by more than half last year to just 4.2%, according to Gartner. Windows Phone 7, released in October, may have enjoyed an early bump in sales, but it is still well below the radar for consumers and developers.
Elop and Ballmer offer brave words about creating scale and disrupting “other mobile ecosystems,” but without specifying how this will come about.
Presumably the deal means Symbian has finally been put out to pasture, although Nokia camouflages this in dense corporate-speak:
With Nokia's planned move to Windows Phone as its primary smartphone platform, Symbian becomes a franchise platform, leveraging previous investments to harvest additional value.
MeeGo, the planned Nokia-Intel platform which is way behind schedule, will now become “an open-source, mobile operating system project” with “increased emphasis on longer-term market exploration of next-generation devices.” The first MeeGo product is likely to ship this year.
As well as the partnership with MS, Elop also unveiled a company restructure – the fifth in five years.
In any case, both moves, announced at the start of Nokia’s capital markets day, left investors underwhelmed. Nokia’s NYSE stock fell 95c, or just under 10%, in after-hours trade.