Nokia, Microsoft to Announce Alliance on Friday?

Nokia CEO Stephen Elop's financial and strategy briefing in London Friday looks to be shaping up to include the announcement of an alliance with his old company, Microsoft, that could lead to the Finnish company's smartphones running Windows Phone 7, according to press reports.

Such a combination has been rumored for weeks, at least since December when a Russian blogger said that sources told him that Microsoft (NASDAQ: MSFT) and Nokia were discussing pairing up for their mutual benefit.

Those rumors were exacerbated in early February when a European stock analyst suggested that a link-up between the two could make a winning team in the rapidly mutating mobile marketplace.

However, the prognostications really began back in September when Elop announced he was leaving his job as president of Microsoft's Business Division to head Nokia.

According to a Bloomberg report on Thursday, Elop has talked with both Microsoft and with Google.

"Nokia ... is close to announcing a software partnership with Microsoft, a bet that together the two companies can better challenge Google (NASDAQ: GOOG) and Apple (AAPL), according to a person with knowledge of the discussions," the report said.

On Tuesday, an email that Elop sent to Nokia employees leaked out. In it, he characterized the company as being on a burning oil platform from which it needs to save itself by jumping into frigid waters.

In his mail, he also both criticized Nokia executives for clinging to its aging Symbian smartphone operating system and also took aim at iOS and Android. According to the latest leak, Elop is also likely to soon do some housecleaning in upper management in order to reinvigorate Nokia and, hopefully, reverse the phone maker's continuing market share slide.

In fact, Nokia's current state of affairs is illustrated by a new report from researcher Gartner that came out Wednesday.

Nokia is still the largest maker of mobile with 461.3 million phones (including both feature phones and smartphones) sold to end users during 2010, for a market share of 28.9 percent. However, that was still a 7.5 percentage point drop from the previous year.

Additionally, in smartphones, Nokia lost 6.7 percentage points from 2009.

Meanwhile, Nokia's Symbian remained at the top of the smartphone operating system market, with some 111.6 million devices sold to consumers in 2010. Again, however, with 37.6 percent share of the smartphone OS market in 2010, Symbian still lost 9.3 percentage points over 46.9 a year earlier.

All told, 296.6 million smartphone OSes were sold in 2010. A total of 1,596.8 million of all mobile phones were sold.

Attempts to reach Nokia and Microsoft spokespersons for comment were not immediately successful.

Stuart J. Johnston is a contributing writer at InternetNews.com, the news service of Internet.com, the network for technology professionals. Follow him on Twitter @stuartj1000.


Android, Microsoft, mobile, Nokia, Windows Phone 7