Nokia on Friday outlined its new strategic direction, including changes in leadership and operational structure to help the Finland-based company compete in a crowded smartphone market. The moves include a major strategic partnership with Microsoft to build a new global mobile ecosystem -- with Windows Phone 7 at the center.
As of April 1, Nokia will have a new structure with two distinct business units: Smart devices and mobile phones. The Nokia Leadership Team, previously the Group Executive Board, now includes CEO Stephen Elop, Esko Aho, Juha Akras, Jerri DeVard, Colin Giles, Rich Green, Jo Harlow, Timo Ihamuotila, Mary McDowell, Kai Oistamo, Tero Ojanpera, Louise Pentland, and Niklas Savander. Alberto Torres has stepped down from the management team.
"Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward," Elop said. "Today, we are accelerating that change through a new path aimed at regaining our smartphone leadership, reinforcing our mobile-device platform, and realizing our investments in the future."
The Nokia-Microsoft ecosystem aims to deliver differentiated products with scale, product breadth, geographical reach, and brand identity. With Windows Phone 7 as its primary smartphone platform, Nokia will help drive the future of the platform by leveraging its expertise in hardware optimization, software customization, language support, and scale.
Nokia and Microsoft also plan to combine services to drive innovation. Nokia Maps, for example, will be at the heart of key Microsoft assets like Bing and AdCenter, and Nokia's application and content store will be integrated into Microsoft Marketplace. Under the proposed partnership, Microsoft will provide developer tools. Nokia is moving Symbian and MeeGo off the table.
"I am excited about this partnership with Nokia," said Microsoft CEO Steve Ballmer, "Ecosystems thrive when fueled by speed, innovation and scale. The partnership announced today provides incredible scale, vast expertise in hardware and software innovation, and a proven ability to execute."
A Nokia-Microsoft Merger?
The Nokia-Microsoft partnership is much broader than IDC analyst Al Hilwa expected, and he said the total realignment of the smartphone platform strategy is unprecedented in scope. He thinks Elop is making the right moves.
"While I suspect the option to come back and make Android phones is still present, it clearly does not provide Nokia with much differentiation against other device makers. The two companies have quite a bit of work to catch up with Apple and Google, and must therefore execute with amazing speed and without stumbles," Hilwa said.
"For Nokia to bet on Microsoft's new phone platform is an incredible vote of confidence, but it is also a natural partnership given the various points of synergies," he added. "In the long run, Microsoft really needed a stronger hardware strategy to compete with Apple and (Research In Motion) and to make headway against the ubiquitously sourced Android."
If 12 months from now the combined hardware and software of these two giants has taken hold, gaining traction and market share, Hilwa suspects that an all-out merger may be in the cards.
Posted: 2011-02-14 @ 10:16am PT
The market love this announcement. Nokia stock down 14% on Friday and almost 5% today.
I see what Microsoft has to gain, but it's a suicide for Nokia.
Thanks also from the developer community, first we had to drink the Maemo cool-aid, then QT, then MeeGo. And now?