Nokia Alliance with Microsoft

Nokia Alliance with Microsoft

On 11 February 2011:

Nokia's CEO Stephen Elop, a former Microsoft employee, unveiled a new strategic alliance with Microsoft, and announced it would replace Symbian and MeeGo with Microsoft's Windows Phone operating system except for mid-to-low-end devices, which would continue to run under Symbian. Nokia was also to invest into the Series 40 platform and release a single MeeGo product in 2011.

These news was not well received by consumers, and has contributed to the decline in the stock price by 11%

As part of the restructuring plan, Nokia planned to reduce spending on research and development, instead customizing and enhancing the software line for Windows Phone 7. Nokia's "applications and content store" (Ovi) becomes integrated into the Windows Phone Marketplace, and Nokia Maps is at the heart of Microsoft's Bing and AdCenter. Microsoft provides developer tools to Nokia to replace the Qt framework, which is not supported by Windows Phone 7 devices.

Symbian becomes described as a "franchise platform" with Nokia planning to sell 150 million Symbian devices after the alliance was set up. MeeGo emphasis is on longer-term exploration, with plans to ship "a MeeGo-related product" later in 2012. Microsoft's search engine, Bing becomes the search engine for all Nokia phones. Nokia also gets some level of customization on WP7.

                       

After this announcement, Nokia's share price fell about 14%, its biggest drop since July 2009. As Nokia was the largest mobile phone manufacturer worldwide at the time, it is suggested the alliance would make Microsoft's Windows Phone 7 a stronger contender against Android and iOS. In June 2011 Nokia was overtaken by Apple as the world's biggest smart phone maker by volume.

In August 2011 Chris Weber, head of Nokia's subsidiary in the U.S., stated:- "The reality is if we are not successful with Windows Phone, it doesn't matter what we do (elsewhere)." He further added "North America is a priority for Nokia (...) because it is a key market for Microsoft."