Nokia Bets Everything on Microsoft

Nokia was once king of the hill when it came to mobile phones. A key developer of GSM (Global System for Mobile Communications), Nokia turned into one of the world’s largest mobile phone manufacturers by the late 1990s.

Every Nokia model released in that era was an icon in its own right; the Nokia 8210 was small and light, while the Nokia 9000 was able to make calls, send emails and access the internet.

By 2004, Nokia began to see their market share slide downhill. The hind had been sitting on its laurels and its competitors had come knocking on the door. Even the launch of Nokia’s N95 could not prevent its descent. And then Apple released the iPhone.

Microsoft, too, has seen a huge dip in the popularity of their Windows Mobile phones. The mighty Windows is still the world’s dominant computer operating system, with Mac OS X a distant third. But the growth-rate of iOS is aggressively outpacing even Windows, surging ahead of the Windows Phone 7 platform due to the wildly popular iPhone.

Thus when Nokia and Microsoft announced a partnership back in February this year, it wasn’t really a surprise. The two partners could leverage on each other’s strengths: Nokia providing the hardware expertise, while Microsoft delivered on the software front.

With the adoption of the Windows Phone 7 platform and Microsoft’s help, Nokia may have another shot at regaining its mobile phone market share by addressing its weak presence in the North American market. After all, it was Hollywood's endorsement of Nokia phones that gave Nokia the lion’s share back in the late 1900s, with movie like Charlie’s Angels and The Matrix.

Microsoft also has something to gain from this partnership. Nokia’s extensive experience in the mobile market and its worldwide network of operator billing agreements means Windows Phone 7 will be now be made available to a larger global audience.