Nokia, Microsoft Announce Deep Partnership

It’s official. Dismissed as a silly rumour by many, Nokia and Micorsoft have just announced a very comprehensive partnership in which Windows Phone 7 will become Nokia’s prime smartphone platform. It goes a lot deeper than that, though. Update: Qt will not be available for Windows Phone 7. Qt will remain the development platform for MeeGo and Symbian. Update II: During its Capital Market Day event, Elop confirmed Nokia will not make a comprehensive MeeGo product line. It will be a platform to learn from, but it won’t become a competitive platform. Update III: Android was not an option because it would be difficult to differentiate there. Update IV: There will be ‘substantial reductions in employment’ in Finland and around the world. Also, before I forget, thanks Engadget for the live-blogging where I get this stuff from!

Nokia, powered by Windows Phone 7

The biggest aspect of the partnership, of course, is that Windows Phone 7 will become Nokia’s ‘primary smartphone strategy’ upon which Nokia will innovate. Nokia will “help define the future of Windows Phone”, bringing its expertise in hardware design and language support to the platform. In addition, Nokia will be able to bring the platform to a wider range of price points and geographies. The two companies will also collaborate on mobile development and align their roadmaps “to align on the future evolution of mobile products”.

Bing will power search on all Nokia’s devices, while Microsoft’s adCenter will take care of the advertising experience. In return, Nokia Maps will become a core part of Microsoft’s mapping services, which isn’t odd considering Nokia owns Navteq which already powers Bing Maps anyway.

Also, Nokia’s application and content store (Ovi) will be integrated into Windows Phone 7’s Marketplace. Obviously, Microsoft’s development tools will be used to develop applications for Nokia’s Windows Phone devices, but that’s pretty much a given.

“Together, we have some of the world’s most admired brands, including Windows, Office, Bing, Xbox Live, NAVTEQ and Nokia,” Nokia’s CEO ELOP and Micorosft’s Ballmer write in a joint open letter, “We also have a shared understanding of what it takes to build and sustain a mobile ecosystem, which includes the entire experience from the device to the software to the applications, services and the marketplace.”

“There are other mobile ecosystems. We will disrupt them. There will be challenges. We will overcome them. Success requires speed. We will be swift,” the two CEOs add. While they’re facing an uphill battle, we’re talking about two major companies – the biggest in software and the biggest in mobile phones – coming together to conquer the smartphone market. This is big.

This gives Windows Phone 7 an incredibly amount of legitimacy – something the platform needed since players like Samsung and HTC saw Windows Phone 7 as an also-ran. They didn’t commit fully to the platform, and while Symbian and MeeGo aren’t going away (see below), Nokia will position Windows Phone 7 as its primary smartphone platform.

Wither Symbian and MeeGo?

What’s going to happen with Symbian and MeeGo? Well, while they aren’t going away for now, it would appear Symbian is on its way out. “With Nokia’s planned move to Windows Phone as its primary smartphone platform, Symbian becomes a franchise platform, leveraging previous investments to harvest additional value,” he adds, “This strategy recognizes the opportunity to retain and transition the installed base of 200 million Symbian owners. Nokia expects to sell approximately 150 million more Symbian devices in the years to come.”

It would seem this signals the end of an era for Nokia. Leveraging previous investments in Symbian? Right, so no more money will be going that way. Symbian’s bye-bye.

MeeGo, on the other hand, will simply be moved off phones and unto other types of devices. “Under the new strategy, MeeGo becomes an open-source, mobile operating system project,” the press release reads, “MeeGo will place increased emphasis on longer-term market exploration of next-generation devices, platforms and user experiences. Nokia still plans to ship a MeeGo-related product later this year.”

Reorganising Nokia

Not just Nokia’s strategy is being reorganised – the company itself is also getting a major overhaul. “As of April 1, Nokia will have a new company structure, which features two distinct business units: Smart Devices and Mobile Phones,” the company announces, “They will focus on Nokia’s key business areas: high-end smartphones and mass-market mobile phones. Each unit will have profit-and-loss responsibility and end-to-end accountability for the full consumer experience, including product development, product management and product marketing.”

Smart devices will be the division taking care of the new Nokia Windows Phone 7 devices, while also having sub-units for MeeGo devices and Symbian smartphones. Mobile Phones will take care of Nokia’s regular phones, which are still selling like crazy and are arguably the best regular phones in the business.

“Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward,” Elop said, “Today, we are accelerating that change through a new path, aimed at regaining our smartphone leadership, reinforcing our mobile device platform and realizing our investments in the future.”

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