Any Port in a Storm – Nokia + Microsoft

In nightclubs across the land this Saturday night at around 2am,  after all the beautiful people and couples had gone home, pairs of those left started to form, desperate not to go home alone.

And in a remarkably similar scene last week Nokia and Microsoft announced that Windows Phone 7 would be Nokia’s OS of choice for the foreseeable future.

Despite both companies taking a real kicking in the mobile market, this could actually work. Nokia had a few lost years, but they’ve always made good, affordable hardware. Although WinPho7 had a lukewarm reception it’s at the beginning of it’s lifecycle and MS deserve some credit for not just copying iOS.

So lets assume for a moment that Nokia’s hardware and WinPho7 is a winning combination that produces some good phones. Who will buy them?

Nokia’s mainstay for the last few years has been a large range of mid and low end commodity handsets. But Samsung have according to some, out Nokia’d Nokia in this market with handsets like the Tocco Lite offering smartphone features at Nokia prices.

So how about the top end of the market? Nokia and MS will have to come up with something truly staggeringly awesome to compete with the future iPhones and whatever the likes of HTC do next.

So that leaves the mid market, which is crowded, and crowded with good phones. With the prices of Android handsets tumbling the mid market is full of very good handsets so Nokia will have their work cut out.

Oddly, this move may harm Windows Phone 7, Nokia and MS cosying up like this could well put other hardware firms off, particularly in the wake of WinPho7’s slow early sales.

Nokia said that by ditching development of Symbian and MeeGo they would save a load of money, but investors were not convinced – Nokia shares lost 14% on Friday, nearly $17,000,000,000.  Ouch.

Why the panic amongst investors? Well Nokia have basically chucked out an established – if aging – platform and bet the whole farm on an OS that is – despite MS saying otherwise – still in beta testing.  In the short term consumers are likely to shun symbian handsets as they see it as a dead end, and the long term prospects hinge on WinPho7 getting it’s act together and gaining some market share.

It’s likely to take Nokia at least six months to launch the first WinPho7 handset, and their success at this point will depend largely on how well Windows Phone 7 is recieved in the meantime.

That’s quite a gamble, and not one investors seem willing to take.

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