Microsoft and Nokia are close to cementing a partnership to produce mobile phones together, according to multiple reports.
It’s like that celebrity couple you never expected to hook up, but who somehow did. Even a former Nokia employee was betting against the prospect of the phone maker working with Microsoft, which would involve shipping Nokia hardware with Microsoft’s new Windows Phone 7 operating system.
But the odds of the two partnering up are looking more and more likely. Bloomberg on Thursday published a report claiming that Microsoft and Nokia are likely to announce the new partnership on Friday. Earlier, The Wall Street Journal on Wednesday published an internal memo that Nokia CEO Stephen Elop sent to staff, and it suggests the company is about to make a dramatic move.
“I have learned that we are standing on a burning platform,” Elop said in the memo, referring to Nokia’s decline in market share. “”We are working on a path forward — a path to rebuild our market leadership. When we share the new strategy on Feb. 11, it will be a huge effort to transform our company.”
All indications suggest the transformation involves Nokia scrapping the mobile operating system that comes on its phones, Symbian OS, and ceding control of the software experience to Microsoft.
This shift would indeed be radical, but it’s an understandable move. Nokia has steadfastly relied on an open-source OS called Symbian. Nokia and Symbian have been the worldwide leader in the phone market for years, but some analysts say the OS could soon be dethroned by Google’s Android OS, which has a more modern user interface and several manufacturing partners. Wired.com late last year began documenting the slow death of Symbian in the wake of more modern interfaces offered by the iPhone and Android devices.
Symbian’s decline has continued as Nokia’s presence in market share plummets. Nokia’s share of the handset market in the fourth quarter of 2010 fell to 27.1 percent, down from 36.6 percent in the year-ago quarter.
“Market share is an existential threat to Symbian, it imperils the very existence of the platform,” said Gartner analyst Nick Jones. “And the main reason Symbian is losing share is the user experience, which isn’t competitive with Apple or Android.”
Shipping phones with Windows Phone 7 would be a quick fix to bring Nokia devices more up to date. Released late last year, Microsoft’s Windows Phone 7 is the software giant’s fresh new start on a mobile operating system after completely scrapping its predecessor Windows Mobile.
Windows Phone 7 features a more modern, tile-based interface that Microsoft believes will charm customers.
“We’re taking responsibility holistically for the product,” said Joe Belfiore, Microsoft’s corporate vice president of Windows Phone, in a previous interview with Wired.com. “It’s a very human-centric way of thinking about it. A real person is going to pick up a phone in their hand, choose one, buy it, leave the store, configure it and live with it for two years. That’s determined by the hardware, software, application and services. We’re trying to think about all those parts such that the human experience is great.”
Despite Microsoft’s efforts, Windows Phone 7 is off to a slow start. By the fourth quarter of 2010, Windows Phone 7 entered the market with lower share than the debuts of both Android and Palm’s WebOS, according to the NPD Group. Microsoft likely sees a partnership with Nokia as an opportunity to quickly gain some presence in phone hardware.
“The Windows Phone 7 ecosystem is still evolving because it’s newer, and market share is of course low,” said Ross Rubin, an NPD consumer technology analyst. ”The volume of handsets that Nokia delivers could certainly be a springboard for that ecosystem.”
The imminent partnership between Microsoft and Nokia has already drawn smack talk from Vic Gundotra, vice president of engineering for Google. Gundotra on Wednesday published a tweet tagged “Feb. 11″ — the day that the Microsoft-Nokia partnership is supposed to be announced.
“Two turkeys do not make an Eagle,” Gundotra said.
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Photo: Nokia N8 (Jon Snyder/Wired.com)
