Well, I wasn’t too far adrift in my predictions of what Nokia would announce this morning. See Takeover rumours and Nokia torn between burning and drowning
A few minutes ago Nokia and Microsoft announced a ‘broad strategic partnership’ which would mean Nokia adopting Windows Phone for its smartphones. The companies will work together on the development of Windows Phone and share assets (eg Bing will be search on all Nokia devices, Nokia Ovi Maps will be the core of all Microsoft mapping services, Office will be the apps, Nokia will power the billing ecosystem, Microsoft adCentre for advertising etc)
The joint letter from Balmer and Elop ends in rousing tone:
“There are other mobile ecosystems. We will disrupt them.
There will be challenges. We will overcome them.
Success requires speed. We will be swift.”
Bluntly, I think this is the right deal. Partnerships only work when both parties need it badly – and the very survival of both Nokia and Microsoft in the mobile space now depend on it being a success. The combination of these two last generation powerhouses deserves to be taken very seriously. They have huge assets. Nokia still has a 30% share of the global smartphone market (Source - Gartner) .In the enterprise software market, Microsoft is still a preferred partner and Nokia could play to this strength. Although Apple, Google and RIM will be tough competitors at least Microsoft+Nokia together could put up a fight.
Note - Nokia shares slumped 10% when the markets opened.