Nokia: Microsoft Partnership on Schedule

Nokia and Microsoft's negotiations over their smartphone partnership are apparently proceeding on schedule, according to a Nokia executive.

The partnership between Nokia and Microsoft is apparently proceeding on schedule, according to public comments by one executive. In turn, that suggests Nokia smartphones running Windows Phone 7 could arrive by their scheduled release date sometime in 2012.

"Negotiations have progressed very well," Kai Oistamo, Nokia's head of corporate development, told Reuters April 4. "They will be concluded well on schedule."

But according to Nokia's publicly released Form 20-F 2010 report, submitted to the U.S. Securities and Exchange Commission and posted on Nokia's Website, the deal continues to carry some substantial risks.

"If we fail to finalize our partnership with Microsoft or the benefits of that partnership do not materialize as expected, we will have limited our options and more competitive alternatives may not be available to us in a timely manner, if at all," reads one section of the report. "Our expected transition to the Windows Phone platform may prove to be too long to compete in the smartphone market longer term."

That aside, the deal also presents some potential benefits for the two companies as they both seek to challenge Apple's iPhone and the Google Android smartphones that currently dominate the market.

Under the terms of the agreement, the report states, Nokia will apparently leverage its expertise in hardware and design to "help bring Windows Phone to a broader range of price points, market segments and geographies." It will also collaborate with Microsoft on development and joint marketing initiatives.

"We expect the transition to Windows Phone as our primary smartphone platform to take about two years," the document continues. "While we transition to Windows Phone as our primary smartphone platform, we will continue to leverage our investment in Symbian for the benefit of Nokia, our customers and consumers, as well as developers."

New numbers from analytics firm comScore suggest that Microsoft's share of the smartphone market dipped to 7.7 percent for the three months ending in February. That's down from 9 percent in November 2010, and enough to place Windows Phone far behind Google Android, Apple's iOS and Research In Motion's BlackBerry franchise.

Ahead of its MIX11 conference, Microsoft has taken to the public channels to tout Windows Phone as the ideal environment for developers. A March 30 posting on The Windows Phone Developer Blog detailed numbers associated with the development ecosystem: Windows Phone Developer Tools downloaded some 1.5 million times, the Windows Phone developer community boasts 36,000 members and the Windows Phone 7 ecosystem contains around 11,500 applications.

Despite the posting's advocacy of Windows Phone 7 as a platform, its title ("The Windows Phone 7 Numbers That Matter") and much of its rhetoric hint at an enormous elephant in the room: actual consumer sales numbers, which remain unreported.

"You might think that the primary driver is the number of handsets in market," Watson wrote at another point. "Based on the conversations we are having with some of our developers, many are telling us that they are seeing more revenue on our platform than competing platforms, despite the fact that we cannot yet match the sheer number of handsets being sold."