"Nokia will adopt Windows Phone as our primary smartphone strategy," Elop said. "We will help drive the future of the platform, and we will bring Windows Phone to extended price points, market segments and geographies."
Nokia will bring "leading mobile devices," along with mapping, advertising, and global online store capabilities to the partnership, Elop said. Microsoft will bring Windows Phone 7, with its Bing, Office and XBox capabilities.
Nokia had three options, Elop explained. Symbian seems to have been written off from the start. Nokia didn't feel it could reach abroad enough range of price points quickly with MeeGo, and didn't feel it could differentiate enough if it became an Android house, Elop said. That left Windows Phone as Nokia's path forwards.
In response to Nokia’s new strategy, Gilles Delfassy, president and CEO of ST-Ericsson commented: “Our focus is to bring flexible, leading-edge platforms quickly to the market by addressing a wide array of segments and operating systems, including Windows Phone. We see Nokia's new strategy as an additional opportunity to leverage the foundation we have built and continue our more than 20 years collaboration with Nokia, as it aligns well with what we're doing."
Mr. Elop, formerly Microsoft's Business division president, was ealier hinting that Nokia is either considering the adoption of a new operating system as part of his strategy to reinvigorate the troubled handset number one (cf. Smart Insights Weekly #11-05). However, analyst thought his move to align with its old employee to combine an incomplete operating system with an ailing handset design company is very risky.
Moreover, according to Wirtschaftswoche, four of Nokia’s executive board are set to lose their positions: Mary McDowell, EVP of Mobile Phones; Niklas Savander, EVP of Markets; Tero Ojanpera, EVP of Services, and Kai Oistamo, EVP and Chief Development Officer. Elop is apparently seeking to replace them with “top people with good software expertise”
On the other hand, Google seems all set to welcome with open arms employees of Nokia who are in the firing line, thus adding a new dimension to the new battle that started with the mobile major joining hands with Google's arch rival Microsoft. Though there is no official confirmation from the search engine giant yet, one of its leading recruiter has tweeted Nokia software engineers are welcome to apply.
After Nokia posted some mediocre results, analysts are giving some additional perspective on Nokia’s massive mobile R&D spend and a point of comparison for its market return. Extrapolating from Bernstein Research data that estimates Nokia spent US$3.9 billion (EUR 2.9 billion) on mobile research and development, Asymco, a Finland-based market intelligence company has calculated Apple’s mobile R&D spend, and there’s an astonishingly wide gulf between the two.
Nokia spends about five times as much on mobile R&D as Apple. In fact, Nokia has nearly as many engineers working on its smartphone software platforms as Apple does for its entire product line.