Nokia Bids Adieu to Symbian, Shakes Hands with Microsoft

Corporate Finance News: Nokia Smartphones to Feature Windows OS

 

The corporate finance news grapevine is abuzz with the news of Nokia parting ways with free source software developers Symbian and joining hands with Microsoft. With this new partnership in place, the Finnish telecommunications giant’s smartphones shall be powered by Windows Phone 7 Operating System rather than Symbian^3.

Corporate Finance News: A Mutually Beneficial Alliance

Stephen Elop, the CEO of Nokia, who moved here from Microsoft, has announced this new development, which also includes the use of Microsoft’s Bing and adCenter for search and ad services for all Nokia devices. Nokia’s acclaimed Ovi Maps will be Microsoft’s answer to Google Maps and will be integrated with Bing in lieu of Bing Maps. Nokia’s content store is slated to be merged into Microsoft’s Marketplace, while gaming on the Nokia platform is also set to receive a boost as Xbox Live would feature in Nokia smartphones targeted at the portable gaming segment. Enterprise users would also be catered to with the inclusion of Microsoft’s Office suite on Nokia’s handsets.

Elop, who became the first non-Finn to lead Nokia when he took over as CEO, stated that the switch to Microsoft from Symbian is part of the world’s largest mobile manufacturer’s bid to radicalize the product as well as the organizational structure. He further hinted at changes to the executive board and job cuts. This major strategic reshuffle has been necessitated by the need to fight off stifling competition from RIM and Apple, as well as a glut of smartphone offerings from various companies using the Android platform.
The announcements were not greeted enthusiastically, to say the least, with investors expecting information in greater detail than what was furnished. Nokia plunged more than nine per cent and the Helsinki Stock Exchange was down 0.56 per cent.

Accepting Shortcoming & Shaping Up to New Challenges

The most visible change thus far for Nokia is its tacit acceptance that the Symbian operating platform, owned and pioneered by Nokia, has failed to remain competitive; thus the bold move to go for Microsoft’s mobile platform for smartphones, even thought the platform has also not done so well against Google’s Android or the iPhone. Part of the apparent logic behind the move seems to be that to meet the onslaught of the competition from Android, RIM and Apple,and ultimately come out on top, serious muscle would be required, as suggested by Elop at a joint press conference with Microsoft CEO Steve Ballmer.

Opinions about this strategic shift abound, with some experts stating that an alliance with Google — whose hugely popular Android platform had also been considered by Nokia — would have been a better move. On the other hand, some market analysts argue that a move to Android would have been too drastic a shift.

Corporate Finance News: New Move No Magic Wand

Nokia, however, warns against expecting a magic cure, indicating that it could be a while before the gambit pays off; as of now, 2011 and 2012 being projected as the ‘transition years’ to fine tune the strategy and get it up and running. Apart from those tidbits, Nokia is mum on any questions about a timetable or a roadmap and the picture so far is rather vague.