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Friday, February 11, 2011, 05:00 am PT (08:00 am ET)

Nokia ditches Symbian, embraces Microsoft Windows Phone for new handsets

Nokia, the world's largest handset maker, announced on Friday its plans to ditch its Symbian mobile operating system and partner with Microsoft to make smartphones running Windows Phone.

Nokia Chief Executive Stephen Elop joined Microsoft CEO Steve Ballmer in a joint open letter, detailing the strategic alliance between the two companies. Though Nokia remains the largest phone maker in the world, the company has been on a significant slide, losing market share to Apple's iPhone and handsets running the Google Android operating system.

The two companies plan to create a "new global mobile ecosystem" by jointly creating mobile products and services. Nokia and Microsoft intend to work together and "integrate key assets and create completely new service offerings."

"Today, developers, operators and consumers want compelling mobile products, which include not only the device, but the software, services, applications and customer support that make a great experience," Stephen Elop, Nokia President and CEO, said at a joint news conference in London. "Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivaled global reach and scale. It's now a three-horse race."

Nokia said that Symbian will become what it calls a "franchise platform," and will be sold on about 150 million devices in the coming years. But the company's strategy is a transition from Symbian to Windows Phone.

Elop made waves earlier this week when he released a 1,300 word internal memo entitled "Standing on a burning platform." The memo compares Nokia's position in the smartphone market to the story of a man on a burning oil platform, faced with the decision to die in a fire or plunge into the icy sea.

The memo depicts Nokia's Symbian and MeeGo platforms as competitive failures, and notes the tremendous success Apple has had with its iPhone and Google has had with Android in recent years. In particular, of Apple, he said that the Cupertino, Calif., company "changed the game."

In the newly announced partnership, Nokia will turn to Windows Phone to fight off the competition, while "innovating on top of the platform in areas such as imaging." The Finnish handset maker has said it will also "drive the future of Windows Phone" by contributing its expertise on global markets.

"I am excited about this partnership with Nokia," said Steven A. Ballmer, Microsoft CEO. "Ecosystems thrive when fueled by speed, innovation and scale. The partnership announced today provides incredible scale, vast expertise in hardware and software innovation and a proven ability to execute."

Key elements of the partnership announced Friday by Nokia and Microsoft are:
  • Bing will power Nokia’s search services across Nokia devices and services, giving customers access to Bing’s next generation search capabilities. Microsoft adCenter will provide search advertising services on Nokia's line of devices and services.

  • Nokia Maps will be a core part of Microsoft's mapping services. For example, Maps would be integrated with Microsoft's Bing search engine and adCenter advertising platform to form a unique local search and advertising experience.

  • Nokia’s extensive operator billing agreements will make it easier for consumers to purchase Nokia Windows Phone services in countries where credit-card use is low.

  • Microsoft development tools will be used to create applications to run on Nokia Windows Phones, allowing developers to easily leverage the ecosystem’s global reach.

  • Microsoft will continue to invest in the development of Windows Phone and cloud services so customers can do more with their phone, across their work and personal lives.

  • Nokia's content and application store will be integrated with Microsoft Marketplace for a more compelling consumer experience.

Nokia said on Friday that it expects 2011 and 2012 to be "transition years" as the company works with Microsoft to implement the Windows Phone platform in its product lineup.

"Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward," Elop said. "Today, we are accelerating that change through a new path, aimed at regaining our smartphone leadership, reinforcing our mobile device platform and realizing our investments in the future."