Microsoft and Nokia need to speed the transition of Windows Phone 7 onto the latter's smartphones in order for their deal to succeed, according to analysts.
The agreement between Microsoft and Nokia to port Windows
Phone 7 onto the latter's smartphone devices will almost certainly change the
mobile landscape in coming years. But if the two behemoths are to succeed in
their plan to combat Apple and Google, they may need to execute their strategy
with startup-style rapidity.
And at least one analyst feels Microsoft's cash-as opposed
to any benefits of the Windows Phone 7 platform-may have persuaded Nokia to
take the leap down a potentially dangerous path.
"If Nokia wanted to leave mobile operating system
development to another company, IHS thinks Google Inc. and its Android software
would have been a better choice," Jonathan Cassell, an analyst with HIS
iSuppli, wrote in a Feb. 14 research note. "Nokia could have reaped many of the
benefits it expects with the Microsoft relationship from either Google or
Microsoft. But clearly, the unspecified billions in Microsoft cash payments
were an important motivating factor in entering into the deal."
In the meantime, he added, Nokia will have to suffer through
several quarters with no new products entering the marketplace.
"With the Microsoft deal unlikely to yield any products for
nearly one year, Nokia will have no choice except to remain awkwardly reliant
on the Symbian and MeeGo platforms in 2011," he wrote. "This will have a
further negative impact on the Nokia's already-eroding position in
Concept images of a Nokia-build Windows Phone 7 are floating
around Websites such as Winrumors
Sleek and thin, the devices' designs seem tailor-made to counter high-end rivals
such as the iPhone. The potential release date for such devices, though,
remains an open question.
Nokia's agreement with Microsoft could help the latter
penetrate the international markets where the former maintains a strong
presence. However, Nokia's placement as dead-last among top mobile OEMs,
according to the latest data from research firm comScore, suggests the deal's
effect on the U.S. market could be somewhat more negligible.
Meanwhile, it remains too soon to tell whether Windows Phone
7 is living up to Microsoft's expectations for a new-and-improved smartphone
franchise. Company executives claim that Windows Phone 7 is selling at a rate
comparable to other first-generation smartphone platforms, but the exact number
of devices reaching consumers' hands remains unclear. At the end of January,
Microsoft confirmed that some 2 million Windows Phone 7 units had been sold by
manufacturers to retailers.