Feb 13, 2011

Nokia and Microsoft enter strategic alliance on Windows Phone, Bing, Xbox Live and more

It's happened. We have been pointing out again and again. Former Microsoft exec and current Nokia CEO Stephen Elop has married his future and his past in the holy matrimony of a "strategic alliance." Windows Phone is becoming Nokia's "principal smartphone strategy," but there's a lot more to this hookup -- scope out the official press release just after the break. Microsoft's Bing and adCenter will provide search and ad services across Nokia devices, while Nokia will look to innovate "on top of the platform" with things like its traditional strength in imaging. Ovi Maps will be a core part of Microsoft's mapping services and will be integrated with Bing, while Nokia's content store will be integrated into (read: assimilated by) Microsoft's Marketplace. Xbox Live and Office will also, as is to be expected, feature on these brave new Microkia handsets. An open letter on Nokia's Conversations site, penned jointly by Stephen Elop and Steve Ballmer, sets out the foregoing details along with the following statement of intent:
"There are other mobile ecosystems. We will disrupt them. There will be challenges. We will overcome them. Success requires speed. We will be swift. Together, we see the opportunity, and we have the will, the resources and the drive to succeed."

Hit read more for a detailed list of important aspects within this partnership.
  • Stephen Elop says that he expects Nokia to ramp up the transition this year and be ready to ship Windows Phone 7 devices in significant volume in 2012.
  • Elop also confirmed that Nokia is a Finnish company and always will be -- they will not be moving to Silicon Valley or anywhere else.
  • Ballmer said that the partnership is "not exclusive" but some things that Microsoft is doing with Nokia are "unique" allowing Nokia to differentiate itself in the market. Elop added that it's important for the Windows Phone 7 ecosystem to thrive, which means that multiple vendors must succeed.
  • Elop didn't believe that Nokia could create a new ecosystem around MeeGo fast enough.
  • Nokia will "substantially reduce" R&D expenditures while increasing R&D productivity moving forward.
  • Nokia did talk with Google about adopting Android but decided that it "would have difficulty differentiating within that ecosystem" and the "commoditization risk was very high -- prices, profits, everything being pushed down, value being moved out to Google which was concerning to us." Microsoft presented the best option for Nokia to resume the fight in the high end smarpthone segment.
  • Elop clarified that MeeGo will ship this year but "not as part of another broad smarpthone platform strategy, but as an opportunity to learn." Something that sounds very similar to position Nokia took with its so-called "experimental" Maemo-based N900 last year. After the first (and apparently, only) MeeGo device ships this year, the MeeGo team will then "change their focus into an exploration of future platforms, future devices, future user experiences." Trying to determine the "next disruption" in smartphones.
  • Responding to "hope for a broad MeeGo-based ecosystem," Elop said that Nokia simply wasn't moving fast enough to effectively win and compete against Apple and Google. Windows Phone makes it a "three-horse race," something that Elop says is pleasing to the carriers he's been speaking with.
  • Nokia has different options for its tablet strategy including using something from Microsoft or something that Nokia has developed internally.
  • Nokia's been beating the Qt warpath for years after purchasing the developer framework from Trolltech back in January of 2008. In fact, Nokia just made the switch to Qt exclusively back in October in a sign of its unrelenting support for the unified development environment. That, like all previous Nokia strategies, is in for a big change today. While Qt will continue on as the development framework for Symbian and MeeGo, Microsoft will provide its free Windows Phone Developer Tools (Visual Studio 2010, Expression, Silverlight and the XNA Framework) to developers interested in developing for Nokia Windows Phones (get used to that phrase) while providing "guidance" to anyone wishing to port their apps to WP7. In other words, Qt will not be adapted for Windows Phone 7 APIs. Full letter after the break to what we imagine is a very disgruntled and previously loyal Nokia developer community.
  • Stephen Elop and Steve Ballmer are in the middle of a Q&A now. When Elop was asked by a concerned Finnish reporter, "What happens to Finland," Stephen responded that a successful Nokia is good for Finland but there will be "substantial reductions in employment" in Finland and around the world. We can't even imagine what it's like to be working inside of Nokia at the moment but the stress, frustration, and concern must be extraordinarily high.
  • After listening to the Q&A and further presentations, it's clear that Symbian is on its last legsand will be replaced by Windows Phone just as soon as Nokia and Microsoft can make it happen. Commitment to MeeGo has also softened with Elop calling it "an opportunity for learning."

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