Nokia joins forces with Microsoft to beat competition

Nokia, the world's largest mobile phone maker, said Friday it was joining forces with US giant Microsoft in a major corporate strategy shake-up that left investors disappointed.

The Finnish phone maker said Microsoft's Windows Phone would now serve as its primary smartphone platform in a "broad strategic partnership" destined to regain market share from competitors Apple and Google.

Nokia's chief executive Stephen Elop - a former Microsoft executive who in September became the first non-Finn to lead Nokia - also announced changes to the company's executive board in his new strategic plan.

The announcements were met, however, with sharp disappointment on the stock market, as Nokia's share price plummeted 9.44 percent to 7.39 euros ($9.99) on the Helsinki Stock Exchange which was down 0.87 percent.

"Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward," said Elop, shortly before holding an investors briefing in London on the new strategy.

He said the two firms would "combine ... strengths to deliver an ecosystem with unrivalled global reach and scale. It's now a three-horse race."

Analysts said the partnership would bring Nokia the benefit of Microsoft's massive resources and experience in cloud computing, essential to next-generation devices, while Nokia could help Microsoft get a better foothold in the portable devices market.

Others such as Espirito Santo Investment Bank pointed out that the Windows' operating system had "failed to gain traction" and that a partnership with Google - whose successful Android operating system had also been pegged as an option for Nokia - would have been a better choice.

"There are so many big questions still unanswered - what's the timetable, for instance? Nokia is starting from pretty much zero ... I still wonder how quickly can they get the new strategy moving," Pohjola Bank analyst Hannu Rauhala told AFP.

The company warned in a separate statement on Friday that 2011 and 2012 will be "transition years" a it gets the strategy up and running.

Nokia also said that it was creating a new 13-member executive board, with some new faces and the immediate departure of Alberto Torres, who was in charge of Nokia's MeeGo project.

But by far the biggest change is the tacit admission by Nokia that its flagship Symbian has failed to be as competitive as they had hoped, illustrated by the fact that Microsoft's platform is now Nokia's operating system of choice.

With Microsoft Phone as the primary smartphone platform, Symbian system will become a "franchise platform" as the company attempts to "retain and transition" its 200 million Symbian-powered mobile phone customers, it said in a statement.

MeeGo, on the other hand, will be kept for long-term development for next-generation devices.

Nokia has still not shipped any smartphones with MeeGo although the company said it hoped to have one MeeGo-related product on shop shelves later this year.

Nokia has over the past two years seen increasing competition in the lucrative smartphone sector from Apple's iPhone, Research in Motion's Blackberry and by Android-operated phones.

Technology research firm Gartner said Wednesday Nokia's global market share had tumbled to 28.9 percent in 2010 from 36.4 percent in 2009.

In a memo to staff that emerged the same day, Elop warned Nokia was standing on a burning platform," surrounded by a "blazing fire" of competition.

Life and Style
ebookNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Guru Careers: Software Developer

    £35 - 40k + Benefits: Guru Careers: We are seeking a Software Developer (JavaS...

    Ashdown Group: UI Developer - (UI, HTML, CSS, JavaScript, AngularJS)

    £25000 - £40000 per annum: Ashdown Group: UI Developer - (UI, JavaScript, HTML...

    Ashdown Group: Graduate UI Developer - HTML, CSS, Javascript

    £25000 - £30000 per annum: Ashdown Group: Graduate UI Application Developer - ...

    Day In a Page

    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf
    From Shakespeare to Rising Damp... to Vicious

    Frances de la Tour's 50-year triumph

    'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
    'That Whitsun, I was late getting away...'

    Ian McMillan on the Whitsun Weddings

    This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
    Kathryn Williams explores the works and influences of Sylvia Plath in a new light

    Songs from the bell jar

    Kathryn Williams explores the works and influences of Sylvia Plath
    How one man's day in high heels showed him that Cannes must change its 'no flats' policy

    One man's day in high heels

    ...showed him that Cannes must change its 'flats' policy
    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
    Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

    Laughter, but no tears, as Letterman takes his bow after 33 years

    Veteran talkshow host steps down to plaudits from four presidents
    Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

    Hozier's 'blasphemous' song takes Novello award

    Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
    Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

    Join the tequila gold rush

    The spirit has gone from a cheap shot to a multi-billion pound product
    12 best statement wallpapers

    12 best statement wallpapers

    Make an impact and transform a room with a conversation-starting pattern
    Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

    Paul Scholes column

    Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?