Backed into a corner, Nokia chooses Windows Phone 7

Fri, Feb 11, 2011


Hot on the heels of Nokia CEO Stephen Elop’s lengthy letter detailing Nokia’s failed attempts to keep up with the staggering pace of smartphone innovation comes a huge coup for Microsoft. Abandoning Symbian and relegating MeeGoo to lord knows what, Nokia has thrown it’s full weight behind Microsoft’s next-gen mobile OS, Windows Phone 7.

The New York Times reports:

The alliance is also a gamble, perhaps a last-ditch effort for both Nokia and Microsoft to gain a lasting foothold in the booming market for sophisticated smartphones, where Apple’s iPhone and Google’s Android software are leading the way in technology innovation…

At least at the outset, the alliance may prove to be more of a boon to Microsoft than Nokia. “Microsoft will have the rationale to really double down with its investment in the smartphone platform and ecosystem,” said Al Hilwa, an analyst at IDC.

One measure, in addition to market share, of how far Microsoft trails in building that ecosystem is the number of software applications developers have created for the Microsoft Windows Phone 7 operating system. The Microsoft applications store, though growing rapidly in recent months, has about 8,000 applications, Mr. Hilwa said. By contrast, more than 350,000 applications have been developed for Apple’s iPhone.

Nokia also considered going the way of Android but ultimately reasoned that such an alliance would do more to benefit Google than it would Nokia. Indeed, Nokia and Microsoft both find themselves sitting on the sidelines in a smartphone race that has largely passed them by.

“An alliance with Google,” Elop explained, “felt like giving up, not like fighting back.”

Microsoft, analysts said, most likely offered Nokia more generous support than Google in paying for engineering assistance, revenue-sharing terms on mobile advertisements, search and map services.

And, of course, it also doesn’t hurt that Elop is a former Microsoft executive.


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