In a joint briefing made at Nokia's Capital Markets Day event, Microsoft and Nokia announced a partnership to collaborate on mobile technology. Nokia has adopted Windows Phone 7 as its primary mobile phone platform and it will also embrace Microsoft's Web services stack, including the Bing search engine.

The partnership creates some uncertainty about Nokia's existing platform efforts, including the Linux-based MeeGo operating system that Nokia co-develops in collaboration with Intel and other vendors. Nokia has confirmed that it will continue selling its current lineup of Symbian devices and that it has at least one MeeGo device planned for launch this year.

Symbian will soon be phased out entirely, however, and MeeGo will be relegated to an open source experiment with significantly reduced development resources. Nokia's excellent Qt development toolkit, which was once the unifying centerpiece of the company's platform strategy, will not be coming to Windows Phone 7. Qt will continue to be supported in a limited capacity as the primary development toolkit for Symbian and as part of the MeeGo stack.

Nokia and Microsoft contend that their union will bring together the strengths of Nokia's hardware expertise and Microsoft's software and service ecosystem. It's not, however, entirely clear if this is going to be beneficial for both parties. This deal gets Nokia a modern platform that is roughly competitive and ready to ship on devices today, but the biggest downside is that it guts the company's software autonomy. Adoption of Windows Phone 7 is fundamentally an act of capitulation by Nokia—an acknowledgement that the company is incapable of building its own ecosystem or innovating above the hardware layer.

The transition will be difficult and costly. Nokia has virtually no internal development expertise on Microsoft's platform and will have to start from scratch as it works to adopt the operating system. Though promising, Windows Phone 7 is still nascent and doesn't have strong consumer or developer mindshare yet.

Nokia has thrown its existing developer community under the bus and will likely not be able to keep them interested in participating in the brave new world of Windows Phone 7 devices. We are already seeing Nokia third-party developers talking about moving to Android in response to today's announcement. On the other hand, Nokia's commitment to bringing Windows Phone 7 to the world might motivate some of the C# developers who are coding on Windows (a very large potential audience) to start looking seriously at getting into mobile.

Diminished ambitions



Nokia CEO Stephen Elop says that 2011 and 2012 will be "transitional" years for the company. He declined to announce when Nokia will ship its first Windows Phone 7 device, but he intends to pull the company forward towards that milestone at a rapid pace.

From Microsoft's side of the table, the deal looks a lot more beneficial. Adoption by the largest hardware vendor could help validate Windows Phone 7 and make it a stronger contender. On the other hand, it could scare away Microsoft's other partners. Microsoft is giving Nokia more control over the platform's future and possibly providing other exclusive privileges. This could make the operating system look less appealing to HTC and others, driving them to build tighter relationships with Google. Microsoft danced around this issue during the press briefing.

It's not clear if Microsoft's brand is strong enough in Europe or if Nokia's brand is strong enough in the United States to make their combined product particularly desirable in either market. Addressing that question, Elop emphasized that he has already discussed the partnership with European carriers and has found them to be receptive and enthusiastic about the partnership.

Whether this deal can save Nokia is a question that's difficult to answer, but it's clear that the company's ambitions have diminished. Adopting Microsoft's platform puts Nokia in the unenviable position of being dependent on Microsoft and the success of Microsoft's fledgling mobile platform.

In light of the challenges that both companies have faced in recent years in their respective efforts to deliver a credible mobile solution, both will face an uphill battle as they struggle to compete with Apple and Google. It's a gamble for both Microsoft and Nokia, but if they can get the formula right, they could jointly form a formidable mobile juggernaut.