Nokia Partners with Microsoft to Break Into Smartphone Market

In a move that could bring latecomer Windows Phone 7 roaring back to life, the world's biggest device manufacturer Nokia said it would adopt Microsoft's platform as part of its primary smartphone strategy. The Finnish handset maker said it will work closely with Microsoft on hardware design and in creating devices that reach both the high and low-end segments of the market. Nokia's phones will likely use Bing as their default search engine and serve Microsoft ads. Nokia's reach into developing countries will help Windows Phone 7 reach international markets, while Microsoft's presence in the U.S. may help the manufacturer break into a market it has long coveted. Both companies are coming from behind. Nokia chief executive Stephen Elop, who was hired from Microsoft in September, said in a widely distributed memo this week that the company was standing on a "burning platform," and that it had little choice but to do the unthinkable and abandon its own in-house efforts at creating an OS. He pointed out that Apple has grabbed control of the high-end market, while Android is eating into the mid-range segment. Meanwhile, dozens of Chinese manufacturers are consuming the low-end of the market. At the same time, Microsoft has arrived several years too late despite Windows Phone 7's polished OS. Although it spent more than $500 million on the launch last fall, Windows Phone 7 has made little headway. On AppData, we track about 346,438 monthly actives on the Facebook for Windows Phone client. That's a fraction of the more than 26 million users of the Facebook for Android app and the 63 million that use the Facebook for iPhone client. It's understandable why Elop has chosen the Windows Phone 7 route. He has close ties to the company after working as head of the business division overseeing Office for two years. At the same time, it would be hard to stand out among HTC, Motorola, and Samsung, which all have aggressive Android strategies.

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Nokia Partners with Microsoft to Break Into Smartphone Market

Kim-Mai Cutler

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