Thursday, February 10, 2011

Nokia and Windows

Yesterday Nokia’s new CEO Stephen Elop(formerly of Microsoft) just sent out a fairly devastating internal memo to all Nokia employees. Elop suggested that his company is “standing on a burning platform” and must “change [its] behavior,” suggesting that the adoption of a non-homegrown platform like Android or Windows Phone 7 is a more realistic possibility than ever before.

Observers have been wondering what Nokia’s next step will be following its CEO’s Burning Platform memo yesterday. The Wall Street Journal and Bloomberg BusinessWeek reported this morning that Nokia is in talks with Microsoft to license the latter’s Windows Phone 7 operating system for use in its devices and that a deal may be announced at an event in London tomorrow. The company has also been in talks for several months with Google about its Android OS, which seem not to have panned out.
A Financial Chronicle interview yesterday with Microsoft India’s new Managing Director, Amit Chatterjee, on the Indian launch of Windows Phone 7 included an interesting tidbit :
“While HTC has already launched a couple of devices to support the Windows 7 phone, Microsoft is likely to join forces with Nokia for exploring the Indian market”
Similar rumors have been flying for a while, but the most recent set seem unusually intense, and Nokia-Microsoft deal might make a lot of sense now. Nokia continues to produce class-leading hardware but has seen its smartphone OS efforts (Symbian and MeeGo) founder in light of strong competition from Apple iOS and Google Android.

Microsoft, once a strong smartphone player with its Windows Mobile OS, has completely rebooted its phone OS with a new offering, Windows Phone 7, that offers an entirely new UI paradigm and smooth experience but has a lot of catching up to do in market share. While Google’s Gundotra was seemingly quick to dismiss the potential of such a deal, a combination of Nokia’s hardware prowess and global retail presence (especially in emerging markets) with Microsoft’s slick new OS could form a strong mobile competitor for Google and Apple.