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Nokia-Microsoft connections not likely to disrupt mobile sector

Nokia and Microsoft have entered a smartphone development agreement, the two companies announced last week. Nokia will ditch its successful, but declining Symbian OS for Microsoft’s Windows Phone 7. Experts questioned Nokia’s move, and investors agreed as Nokia stock dropped fourteen percent on the news. This could help both Nokia and Microsoft never need a personal loan to grow.

The connections between Nokia and Microsoft

The idea that Nokia would consider making a deal with Microsoft confused several individuals as the Nokia-Microsoft smartphone alliance came together. In the fourth quarter of 2010, the Nokia Symbian OS had 36.6 sector shares as an industry leader. Still, Nokia is replacing the phone with the Windows Phone 7 soon. The list that has Android at 25.5 % market share and iOS that has 16.7 % market share does not even show Windows Phone 7 since it has so few users. Nokia said Windows Phone 7 will now be its “principle smartphone strategy.”. There can be a team put together from Microsoft and Nokia. They’ll make smartphones together. Microsoft’s Bing will be the default search motor on Nokia phones. Maps for Nokia will start to be used by Microsoft. This can be for all services.

The gains Microsoft sees while Nokia misses out

It has been suggested by experts that the partnership is something Nokia will not benefit from but Microsoft will. Microsoft gets to plug into one of the largest mobile phone distribution networks in the world. What Nokia gets is access to Windows Phone 7. It’s a mobile operating system that practically has never existed. Many suggest that when Stephan Elop left Microsoft to become CEO of Nokia in September, it started a conspiracy of the Nokia/Windows Phone 7 arrangement. The arrangement is great because Microsoft has access to Nokia without actually having to buy the company. Microsoft can start working with more smartphone technology now.

Investors doubt connections will succeed

Nokia stock went down fourteen % because of the Microsoft-Nokia smartphone announcement. July 16 was the last time a huge drop happened in Nokia stock like this. Analysts are saying that Nokia has given itself away for free and ceded the smartphone industry to Google and Apple. It could be a while before the Nokia Windows Phone 7 headsets come out. It is anticipated to be in 2012. Symbian will die on the vine while Android and Apple’s iOS continue to advance. Taking operating systems and putting it on other hardware is something Microsoft normally does. The OS by Nokia has always been original. The difficulty Nokia faces is being compared to Apple replacing iOS with webOS on the iPhone. This is unthinkable.

Articles cited

Business Week

businessweek.com/news/2011-02-11/nokia-tumbles-on-concern-that-microsoft-deal-may-kill-company.html

Wired

wired.com/gadgetlab/2011/02/microsoft-and-nokia-team-up-to-build-windows-phones/

PC World

pcworld.com/businesscenter/article/219431/nokiamicrosoft_alliance_is_a_win_for_apple.html

PC Magazine

pcmag.com/article2/0,2817,2380144,00.asp