It shocked the cellphone environment when Nokia announced that they will be partnering with Microsoft in terms of operating system software. Nokia will no longer be using their in house software Symbian on their smartphones but will rather use Windows Phone 7. Nokia is the biggest cellphone manufacturer in terms of phone sales in the world but have been battling to stay relevant.
Their market share has been dwindling consistently over the last 18 months. The cell phone ecosystem is being dominated by iOS, Android and BlackBerry devices.
In all honesty the strategic partnership makes sense for various reasons:
- Stephen Elsop, the first non Finish CEO of Nokia was employed by Microsoft, so he has firsthand knowledge of the organisation and their operations.
- Nokia were in no position to put more investment into the Symbian platform as they need something that is already developed and functional to help them stay relevant.
- If Nokia chose to use Android software, they would have become just another manufacturer that uses the software. Samsung, HTC, LG and Sony Ericsson all use the software. So partnering with Microsoft provides them with some “exclusivity”.
- Symbian was becoming outdated in comparison to BlackBerry, Android and Apple’s software. The cellphone is no longer the factor that makes users purchase a specific device. The software and applications are crucial for users in making the purchase decision.
- Microsoft will be in position to tap into a market that they have never had access to. Nokia provides them the ability to grow their market drastically.
One thing that many people have forgotten about with this partnership is that Nokia have put millions of Dollars into research and development. It must be a bitter pill to swallow to have to switch to a rivals’ software. Nokia was something that made Finland proud as it was seen as a national asset, however many jobs will be lost with the strategic partnership. In my opinion I think this could be the start of the death waltz for Nokia. They should have gone for Android, as that is the operating software that will dominate the market for a very long time. Time will be the judge on whether Nokia made the right decision.
