updated 07:30 am EST, Fri February 11, 2011
Nokia and Microsoft strike Windows Phone deal
Nokia during its financial meeting today confirmed a historic deal with Microsoft to switch primarily to Windows Phone in return for key deals. The phone maker will use Windows Phone as its "principal" smartphone strategy for the future, including the use of mobile Office and Xbox Live. Bing will be primary search engine across all of Nokia's platforms, and Microsoft's adCenter will provide mobile ads.
The apps and content from the Ovi Store will be subsumed into the Windows Phone Marketplace, the two companies added. Apps will have to be made with Microsoft's tools and won't work with Nokia's cross-platform Qt.
MeeGo and Symbian are still in development, Nokia said, but will change roles. A MeeGo device is still due in 2011 but will be an open-source project dedicated to "longer-term market exploration of next-generation devices, platforms and user experiences." Symbian would now be there to support an established ecosystem as it would be "leveraging previous investments." The aim would be to ultimately transition those customers, Nokia said. Smart Devices Lead Jo Harlow will take control of MeeGo, Symbian smartphones and Strategic Business Operations.
In return for using Windows Phone, Microsoft will also take cues from Nokia. The American OS developer will take cues from Nokia on hardware design as well as expanding distribution, including new countries, languages and smartphone price categories. It will take advantage of Nokia's experience in making carrier billing deals to get Windows Phone into areas where few if any use credit cards.
Bing and adCenter will also integrate Nokia Maps and should lead to a "unique local search and advertising experience."
Nokia hasn't said when its first Windows Phone hardware will ship, but it has promised its collaboration is "unique" and will let Nokia stand out among others using the platform. The two engineering teams have already been meeting together, Nokia chief Stephen Elop said.
The two companies cast the deal as both bringing Nokia into relevance with a modern smartphone ecosystem and catapulting Windows Phone into serious contention by taking advantage of Nokia's scale. They now expected that the combination would be able to compete with Apple's iPhone and Google's Android.
"Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivalled global reach and scale," Elop said. "It's now a three-horse race."
The deal if implemented quickly could thrust Microsoft back into the upper echelons of smartphone market share on at least a temporary basis. Although Nokia's share has been falling fast, it remains the leading smartphone maker, although not necessarily by platform. The company still has edges in Africa, Asia and the Middle East where North American rivals like Apple, Google and RIM are only just getting established.
The move is nonetheless a gamble as it could represent a step backwards in some areas even as it moves forward. Until the two major OS updates expected this year, WP7 won't have copy-and-paste text or multitasking. Symbian has also traditionally been more flexible in software where Microsoft has relatively strict requirements.