Nokia shuns Android with Windows Phone 7 deal-- 11/02/2011
Nokia has announced a range of strategic and structural changes, including the adoption of Windows Phone 7 software, in a bid to retain its hold on the mobile market and increase its reach into the smartphone business.
The firm will announce its plans in detail at an event in London today at 10am, but has provided some information to journalists in advance. The list includes details of a range of structural changes, as well as a hotly tipped tie up with Microsoft that will see Windows Phone 7 become the primary operating system on its handsets.
Nokia will now focus its investments on next generation disruptive technologies, the firm explained, and will look to build devices that will appeal to the “next billion" of so far unconnected but potential phone users in developing markets.
It expects that the changes will help propel it forward, and the firm said that here it had a distinct focus on speed, results, and accountability.
The plans appear to be mutually beneficial to Microsoft and Nokia, and the firm said that by using Windows phone on its smartphones it would be able to drive the platform forward through its work on hardware optimisation and software customisation, as well as its support and scale.
Microsoft will provide developer tools to boost the ecosystem around its OS, the firm added, and help increase the scale of its Ovi application store.
This is not the end of Nokia’s current operating systems, and the firm said that it expected to keep selling Symbian-based devices - it talked of some 150m new sales, while Meego will become an open source OS. The firm expects to ship a smartphone running the OS later this year.
Management and structural changes were also announced, and the group executive board has been replaced with the Nokia Leadership Team - which is lead by Elop. Alberto Torres, Nokia’s Vice President has stepped down and will leave the company.
By April the first Nokia will have split into two business units, Smart Devices and Mobile Phones, or smartphones and mass-market phones. Each unit will have its own profit and loss responsibilities, suggesting that Nokia is determined to distance them.
Information prior to this was scarce, and the firms local PR team was unable to provide even the slightest clue as to the content of the presentation. In a pre-brief released earlier this week, the firm simply said that it would be holding a “Strategy and Financial Briefing”.
So, when Stephen Elop takes the stage later today it will be to announce sweeping changes.
"Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward," he will say this morning in a statement.
"Today, we are accelerating that change through a new path, aimed at regaining our smartphone leadership, reinforcing our mobile device platform and realising our investments in the future."
The past few years have not been kind to Nokia, even though it remains the leader in hardware sales.
Its new operating operating system challenger Meego is unproved, while its workhouse Symbian OS has fallen out of fashion. In recent years it has failed to make the most of the smartphone market and has seen its sales eroded by Google’s Android and the Apple iPhone.
This week the firm was rocked when an internal memo in which the chief executive described the difficult situation Nokia was in.
"The first iPhone shipped in 2007, and we still don't have a product that is close to their experience," he wrote in the widely reported memo.
"Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable."
Comparing the business to a man faced between standing on a burning deck or throwing himself into the sea, Elop said that as well as facing competition from Apple, his firm was being undermined by Chinese hardware manufacturers that can produce a high number of phones at lower cost.
These difficulties, which have increased in recent years, have pushed the company into making some bold moves.