For a while now it's been obvious that Nokia has been fighting a losing battle, particularly in terms of mindshare, against the emergence of the iPhone/iOS and Google's Android OS, with the outdated Symbian failing to be modernized and made competitive and the upcoming MeeGo OS being unproven and hampered by delays. The leak of a memo by CEO Stephen Elop earlier this week indicated his perspective of the company being in crisis and alluded to some big impending changes.
In a move that has been rumored in recent weeks, Nokia today announced that it has entered into a strategic alliance with Microsoft and that Windows Phone 7 will become the company's primary smartphone platform. Going into further detail, it appears that the alliance covers a broad spectrum and doesn't mean that Nokia is simply becoming a WP7 manufacturing partner. The two companies stressed that Nokia would have room to innovate within and possibly customize the WP7 ecosystem in order to differentiate its products, and that the company would also be actively involved in helping to drive and further develop the Windows Phone platform in the future, providing its expertise in hardware and strong international market presence. As such, the two companies will also share a unified development roadmap for R&D, marketing, and new products. Other areas that the alliance will cover include Microsoft's Bing search engine and adCenter advertising platform becoming standard across all Nokia services and devices, Nokia Maps becoming a core component of Bing and Microsoft's mapping services, and the integration of the Ovi Store with Microsoft Marketplace.
Moving back to Nokia's current platforms, Symbian and MeeGo, the company announced that the two operating systems would continue for the foreseeable future, but clearly in a more downscaled supporting role. The so far unreleased MeeGo, previously Nokia's planned primary smartphone OS, will be reduced to an open-sourced, mobile OS project intended for learning and future development, much in the same way as its predecessor Maemo. Elop also confirmed that a MeeGo device would be launched later this year, but any hopes of it becoming a large scale mobile platform appear to now be in vain.
As for Symbian, Nokia recognizes the current large market share it still occupies and as such it will become a "franchise OS" with the company continuing to provide support during the transition to WP7. However, it seems clear that Nokia will stop investment in further development of Symbian software, products, and services from now on as it devotes those resources to its new WP7 line-up.
There hasn't been any firm indications regarding the likely timescale of these changes and developments, but Stephen Elop and Microsoft CEO Steve Ballmer stressed the need for action and urgency to get developments to market sooner in order to address a long-time weakness of Nokia. I think we can certainly expect to see a Nokia WP7 phone in the second half of this year, with an insider claiming it will be based on existing hardware.
Although I had considered the possibility of Nokia joining in an alliance with another platform holder, it is still quite an unbelievable development that is sure to spark a lot of discussion and debate. While part of me would have liked to see Nokia turn around Symbian and make MeeGo into a success, signs are that this would probably never have happened, particularly with Symbian.
As Elop pointed out, the company simply wasn't moving fast enough to catch up with the likes of Apple and Google. By switching to Windows Phone 7 in alliance with Microsoft, Nokia will hope to gain a modern, competitive software platform with a lot of potential, with which to combine with its traditional strengths in hardware. Microsoft will gain by teaming up with one of the best hardware partners it could hope for, with truly global market reach and influence.
On the other hand, I think the sidelining of MeeGo into what will effectively become an experimental niche platform for enthusiasts and developers is a disappointing move by the company and one that will be particularly badly received among the Maemo and Linux communities who have strongly supported Nokia's previous open source software and hardware developments.
Interestly, Elop also revealed that Nokia did consider switching to Android, entering discussions with Google. But ultimately the company was concerned with certain key factors including whether it would have the freedom and ability to "differentiate with the ecosystem," the fragmentation of Android, and the high commoditization risk with "prices, profits, everything being pushed down, and value being moved out to Google." Hence it became clear to Nokia that the close alliance with Microsoft and the adoption of Windows Phone 7 was the best option for the Finnish giant.
What are your thoughts on Nokia switching to Windows Phone 7? Has the company made the right choice to move forward?[Nokia via Engadget]