Microsoft-Nokia Alliance Doesn't Mean End of Windows Mobile

When Microsoft and Nokia formed a partnership to load a mobile version of Microsoft Office onto Nokia smartphones, the better to compete against RIM's BlackBerry line, analysts immediately began discussing how the alliance would weaken Microsoft Windows Mobile. However, Microsoft has shown signs that it fully intends to keep backing Windows Mobile, even if the operating system has a small share of the smartphone market.

Immediately after Microsoft and Nokia on Aug. 12 announced a deal to load a mobile version of Microsoft Office onto Nokia smartphones, debates erupted online as to what the alliance would mean for Microsoft Windows Mobile, Redmond's own mobile operating system.

Under the terms of the agreement, the mobile Microsoft Office applications will come preloaded on Nokia Eseries smartphones, allowing out-of-the-box functionality for the business-centric devices. Nokia and Microsoft plan to later port the application platform onto other smartphones.

Click here for a look at the Nokia N97 smartphone.

That porting of Office functionality onto a competing mobile operating system has led some analysts to the conclusion that, while the alliance will allow both Microsoft and Nokia to compete more heartily against Research In Motion, it leaves Windows Mobile somewhat isolated.

Even before the announcement, Microsoft seemed to b e designing the upcoming version of its mobile operating system, Windows Mobile 6.5, with the intention of making an aggressive unilateral push to compete against the Apple iPhone, Palm Pre and other smartphones. Windows Mobile 6.5's new features include improved touch capabilities, allowing the user to navigate through tapping and other gestures, as well as customizable widgets.

But certain analysts now see Microsoft as retreating a bit from its original intention of going it alone in the mobile arena, particularly with regard to the enterprise.

"I see [the Nokia agreement] as a tacit admission from Microsoft that WinMo [Windows Mobile] hasn't made the grade," Nick Jones, an analyst with Gartner, wrote in a blog post following the joint announcement. "Imagine you're Steve Ballmer, and in two years' time WinMo was still fourth in smartphone market share. How much longer do you keep throwing money at it?"

In an interview with company spokespeople following the announcement, neither Microsoft nor Nokia would comment on any structuring within the deal that would allow the mobile Office side to proceed without being affected by competition on the OS side of the equation. With both Nokia and Microsoft feeling pressure from Apple and RIM in the marketplace, however, the alliance may take priority over other concerns.