Will it work? Nokia was, is and for some time may still be the world’s top selling phone manufacturer,though its position has been severely weakened in recent years. Nokia was the leader of the pack in both spheres of the mobile world i.e. hardware and software .. Nokia was almost always ahead of the curve in terms of phone features and its Symbian OS worked well.Nokia phones were trendy and reliable .Also Nokia had no real competition as its phones were much better than those of others. Then there was the emergence of smartphones which split the phone market into two parts : The High-end smartphone market and the low-end/feature phone market. While Nokia’s success in its earlier years ensured that it continued to sell a huge number of low-end phones wherever phones networks expanded on earth, this did not ensure Nokia’s success in the smart-phone market . Nokia’s upgrades to Symbian were slow (and mostly iterative) and though there are a huge number of apps written for Symbian, a effort to form something like an App store didn’t come until 2007 which was the year of the iPhone Launch.

Despite the iPhone and the huge amount of buzz it generated, Nokia did not compete aggressively enough with Apple and continued a sluggish approach, probably because it did not expect data intensive smart phones could be so successful contrary to what had been true all along for Nokia.The company did make some efforts like first developing Maemo and then joining forces with Intel to build MeeGo.But Nokia’s efforts lacked a definitive strategy. Slowly Nokia’s position in the smartphone declined. The other thing to hit Nokia hard was the emergence and success of a huge number of competitors in the low-end/feature phone market.This trend is especially visible in India where Nokia’s market share fell from 74% to 51%.Once the default brand, Nokia position has been hurt by the emergence of many local players in the low-end market who have been much more aggressive in marketing their products and also whose products are more in tune with the local tastes. These losses on both fronts left Nokia on a sticky wicket. This prompted Nokia into making some changes,the first was some management changes (including its first non-Finnish CEO Stephen Elop) followed by the announcement of deal with Microsoft So how is teaming up with Microsoft going to help? This is clearly an effort to regain a foothold in the smartphone market after silently being on the losing to Apple iPhone and Google’s Android. Microsoft has recently launched the latest version of its Mobile Phone Operating system and it has received surprisingly good reviews.If you take a look at the UI, you will notice that ‘Windows Phone 7’ (as the OS has been christened) interface isnt merely an iterative improvement over previous versions of the OS but a rethinking of the OS for touch-screen phones . Many experts have appreciated the OS though it is yet to be seen whether it’s going to be the much awaited iPhone killer or even and Android killer.

Nokia benefits from this deal because it gets a brand new and better OS for its smartphones while Microsoft gets to leverage Nokia’s far-reaching brand in phone market to trigger a surge in the developement of Apps for the Windows Mobile 7 platform. Shouldn’t Nokia have adopted Android instead given the huge number of apps that have been written for it and the brand value associated with Android(Many handset makers tout Android as one of the key features because of the humongous no. of apps). It could have and there would have been some immediate benefits but joining with Microsoft instead gives Nokia the oppurtunity to kill two birds with one stone (or one phone :D) . Also,the Android platform which is under rapid development and constant improvement isnt without its troubles.Since Android is Open source, handset manufacturers come up with their own versions of the OS creating a separate software ecosystem for their devices and virtually negating the advantage(or should say point) of the Android marketplace.

So overall,we may say that the deal is a smart move and both companies gain something but will this be enough for Nokia to regain its once-dominant position. Atleast, two things must necessarily happen for Nokia’s success.First,Nokia (and even Microsoft) must market their phones more aggressively and create a buzz that was once associated with Nokia’s (then)cutting-edge phones . Second,Microsoft (and Nokia) must convince developers to create apps for the Windows Phone 7 platform (which today has just above 3000 apps).Enticing Symbian developers to move to Windows Mobile 7 instead of iOS or Android may surely help.

PS:I’m a Nokia fan