Nokia, Microsoft Announce Partnership, New Strategies
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Nokia and Microsoft plan to form a "new global mobile ecosystem" that will include running Windows Phone 7 on Nokia smartphones.
Nokia and Microsoft officials hope that by combining forces, they can become significant players in a lucrative and highly competitive smartphone market in which each has struggled while rivals Google and Apple have flourished. At a joint press conference in London Feb. 11, Nokia and Microsoft announced plans to form a strategic partnership that will include running Windows Phone 7 on Nokia mobile smartphones rather than Symbian or MeeGo, bringing together their respective strengths to create a new "global mobile ecosystem."In addition, they plan to create what officials said are calling new service offerings.
As part of the new partnership, Nokia will adopt Windows
Phone as its principle smartphone operating system, contributing its hardware
expertise and helping to bring the Microsoft OS to a larger range of price
points, market segments and markets worldwide.
Nokia's Ovi applications store will be folded into the
Microsoft Marketplace, Nokia Maps will become a core part of Microsoft's
mapping services, and Microsoft's Bing will power searches on Nokia handsets.
Additionally, Microsoft development tools will be used to create applications
for Nokia handsets, to help expand the new ecosystem's global reach.
As of April 1, Nokia will also separate into two distinct
business units: a Smart Devices unit and a Mobile Phones unit. The former will
focus on smartphones, including Symbian smartphones (Symbian will become a
"franchise platform, leveraging previous investments to harvest additional
value," said in a statement), MeeGo computers and strategic business operations.
The latter will focus on Nokia's "Web for the next billion" strategy, which
seeks to deliver an affordable Internet experience to a billion users,
primarily in developing markets.
Given the core competencies of each, the pair insisted that
they could move quickly to market.
"Ecosystems thrive when fueled by speed, innovation and
scale," Microsoft's Ballmer said in a statement. "The partnership announced today
provides incredible scale, vast expertise in hardware and software innovation
and a proven ability to execute."
Nokia officials said in statements that they expect to see
revenue growth in 2011 and beyond as the spike in smartphone sales continue,
but added that this year and 2012 should be viewed as transition years as the
partnership with Microsoft ramps up.
Effective Feb. 11, Nokia also has a new leadership
structure, still topped by Elop. Jo Harlow will run Nokia's Smart Devices
category; Mary McDowell will lead the Mobile Phone unit; and its Markets
division, responsible for selling products and executing compelling marketing
campaigns, will be headed by Niklas Savander.
This month Nokia also opened a new headquarters in
California's Silicon Valley.
While the pair certainly have some work to do, they're
apparently confident that together they can stand up against Apple and Google.
With Nokia and Microsoft's strengths combined, Elop said in the statement, they expect to deliver an ecosystem with "unrivaled global reach and scale." He added, "It's now a three-horse race."
With Nokia and Microsoft's strengths combined, Elop said in the statement, they expect to deliver an ecosystem with "unrivaled global reach and scale." He added, "It's now a three-horse race."
