Aemiliano blog

New CEO Could Lead Nokia To Windows Phone 7

It seems like a match made in wireless heaven: Microsoft, whose Windows Phone 7 operating system needs a boost in the market, and Nokia, the world's biggest cell-phone maker, struggling to hold its domination in a market enthralled by sexier devices.

And the matchmaker may be Stephen Elop, a former Microsoft executive who became Nokia's president and CEO in September. The Canada native has been dropping hints lately that Finland-based Nokia's reliance on its own Symbian software is waning. The first step in that direction came when Nokia and Intel signed a deal to create the MeeGo operating system for a new line of products.

'New Ecosystems'

Now Elop said in an earnings call that he sees the need to "create and/or join other ecosystems" as Nokia's share of the global smartphone market slips. That could mean Nokia, which opened a new Silicon Valley office for developers Thursday, might embrace Google's free Android OS or a make a deal with Elop's former company. Answers may come as soon as Feb. 11, when a major announcement is expected at an investors conference in London.

While still on top, Nokia says its market share fell to 31 percent in the last quarter, down from 35 percent a year ago, and Elop conceded that the company "faces some significant challenges in its competitiveness," according to the Associated Press.

"Nokia does not have any real market in North America, which has become one of the most lucrative cell-phone markets in the world, and their user interface has not been well received," said analyst Gerry Purdy of MobileTrax. "Stephen Elop is from Microsoft, so you'd expect that if they were looking outside, the first place they would look is where he came from."

Multi-Platform Strategy?

But given the increasing momentum of Android, which recently became the top platform in the United States with its availability on multiple devices on numerous carriers, Purdy said it "would be smart for the company to consider [Android] as well as Windows Phone 7 in their decision-making process." He noted that other manufacturers such as LG, HTC and Samsung have a multi-platform strategy. Samsung, for instance, sells the Focus with Windows 7 as well as a range of Android devices and phones powered by its own Bada system.

Purdy said adding Android and Windows devices could help Nokia appeal to different audiences. "You can justify Phone 7 for enterprise because Microsoft has that base and that's a strong market, and you can justify Android because it's a popular consumer platform," he said.

Elop formerly headed Microsoft's business division.

Microsoft recently announced that two million Windows smartphones have been shipped to sellers since their November release, but it's unclear how many have ended up in the hands of consumers. A survey by NPD Group found that in the first two months of sales, Windows Phone 7 devices gained only a two percent foothold in the U.S. market.

But don't count Phone 7 out. "I wouldn't write it off," Purdy said. "In relation to older versions of Windows, it is doing much better. It's still too early to tell."