Nokia Partners with Microsoft, Adopts Windows Phone 7

Nokia will adopt Microsoft's Windows Phone as its primary smartphone strategy, the company said on Friday, after days of speculation on what it would do to compete with Apple's iPhone and Google's Android.

By Mikael Ricknäs
Fri, February 11, 2011

IDG News Service — Nokia will adopt Microsoft's (MSFT) Windows Phone as its primary smartphone strategy, the company said on Friday, after days of speculation on what it would do to compete with Apple's iPhone and Google's (GOOG) Android.

Microsoft is already working with Nokia on the company's first Windows phone, and the companies are in discussion with chip manufacturers, the companies said. However, they gave no indication of when the phone will go on sale.

The companies will also partner on mobile ads -- where Nokia will use Microsoft adCenter in mobile devices -- and on mapping, where Nokia Maps will become part of Microsoft's Bing search engine. Nokia's application and content store will be integrated into Microsoft's Marketplace.

Before today's announcement, Nokia CEO Stephen Elop had stated that Nokia needed to "decide how we either build, catalyze or join an ecosystem" to change its fortunes. In the end it decided to partner with Microsoft and join the Windows Phone 7 ecosystem.

Nokia had approached Google about using its Android OS, but ultimately decided it didn't want to play in a commodity market, Elop said. Adopting Android would also give Google too much of the services revenue associated with the phones, he said.

In the competition between mobile phone manufacturers and OS vendors to make their platforms more attractive to developers and customers, Research In Motion (RIM) isn't even in the running, according to Elop. "This is now a three-horse race," he said.

In its partnership with Microsoft, Nokia will contribute its hardware design and language support, and help bring Windows Phone to a larger range of price points, market segments and geographies, the companies said in an open letter from Elop and Microsoft CEO Steve Ballmer.

Nokia won't abandon its own platforms, Symbian and MeeGo, yet. The company still plans to put out a "MeeGo-related" product later this year, it said. However, Alberto Torres, who headed Nokia's MeeGo push, stepped down from the management team on Thursday to pursue other interests outside the company, Nokia said.

Nokia "expects to sell 150 million more Symbian devices in the years to come," it said. In the fourth quarter it sold 28.3 million.

The company needs Symbian to continue as a strong platform in the interim period before Windows Phone 7 is up and running, according to Ben Wood, director of research at CCS Insight.

As recently as December, Nokia planned to roll out four or five upgrades to its Symbian OS in the next 12 to 15 months, adding a new look for the user interface and a more flexible home screen, according to a presentation given at the 2010 International Mobile Internet Conference in Beijing.

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