February 22, 2011, 12:44 PM

Nokia and Microsoft: Too late?

Nokia to integrate Windows on all phones, but grab for market share could be tough.

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The iPhone is the dominant smartphone today, with Android phones close on its heels. Can a Nokia/Microsoft alliance boost the Windows Phone operating system?

The new guy at mobile phone maker Nokia, CEO Stephen Elop, turned the company’s world upside down when he announced Feb. 11 that “Windows Phone is our primary smartphone platform going forward.” The company is taking its longstanding Symbian mobile operating system and throwing it in the trash. This is quite a move for any manufacturer to make.

Nokia is one of the top makers of mobile phones, smart and dumb, in the world. But in recent years its Symbian system has taken a huge market share hit from Apple Inc.’s iOS and Google Inc.’s Android. In Q3 2010, Symbian was far behind smartphone OS leaders iOS, BlackBerry (which also is getting eaten alive by Apple and Google) and Android. Windows Phone was a distant fourth to the big three.

So the idea is a fading star, Symbian, and a stagnant giant, Windows, can join forces and take the smartphone world by storm. While the market share for Windows Phone smartphones will certainly jump in 2012, when Nokia says it will begin shipping the new phones en masse, I have my doubts that it can overtake the iPhone or Android.

A new report from Forrester Research Inc. entitled “Nokia And Microsoft Tie The Smartphone Knot” says it all.

“The Symbian platform is practically invisible in North America, while iPhones and Android-based phones have grabbed market share,” write Ian Fogg and Charles S. Golvin. “While Nokia and Microsoft bring complementary technologies and skills together, to succeed they must execute flawlessly and with alacrity in a market that is innovating at a remarkable pace.”

Apple and Android are so far ahead of Microsoft in the realm of smartphones that Microsoft has one of the biggest uphill battles to fight in the technology industry.

The report goes on. “Nokia found its market disrupted in just a few years by competitors, including Apple (with its iOS-based devices) and a number of handset makers employing Google’s Android operating system. Nokia rightfully acknowledges that the market has transitioned from just phones to a broader ecosystem of devices, software, user experience, applications and content—a total product experience. Consumer product strategists throughout the mobile ecosystem must prepare for reinvigorated fresh entrants—both Windows Phone and Nokia—but the union’s success faces many questions, primary among them: Is differentiation possible?”

Apple has been and continues to be the leader in innovation in the smartphone and smartphone app markets. Android is quickly catching up. Nokia and Microsoft would have to create stunning innovations, and plenty of them, in building a new mobile ecosystem. And let me tell ya’, so far, Windows Phone has been a dud.

“Product strategists building applications for the expanding portfolio of smart connected devices today place Apple’s iOS and Google’s Android at the top of their priority list, with BlackBerry, Symbian, [Palm’s] webOS and Windows Phone a distant collective third place,” Fogg and Golvin conclude. “Even if this collaboration bears all of its hoped-for fruit, the installed base of Windows Phone devices will be far outstripped by those of Android and Apple for the rest of 2011 at least. In contrast to applications built for Android, iOS and webOS, those targeting Windows Phone devices today will exclusively target phones and won’t scale to tablets, further reducing the strategic value of committing primary development resources to Microsoft’s platform.”

I think the marriage of Nokia and Windows Phone is a smart move for two players desperate to make headway with a technology that’s key to the future, but I think they’re too late to the game. And with the introduction of the mega-popular iPad tablet, which runs Apple’s iOS, and tablets running Android, this leaves Windows Phone in the mobile dust.

But I’ll be keeping a sharp eye on what Nokia and Windows Phone can bring to the smartphone table that’s different from what the iPhone and Android offer. They certainly have the potential to knock the shrinking BlackBerry down a peg, but compete with the iPhone or Android? I don’t think so.

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