Friday, February 11, 2011

Nokia, Microsoft to Join Forces to Challenge Apple Dominance

Nokia Oyj, the world's biggest maker of mobile phones, said it's forming a software partnership with Microsoft Corp., a bet that together the two companies can better challenge Google Inc. and Apple Inc.

Shares fell as much as 9.8 percent, after the Finnish company's plan to move to Microsoft's Windows as its primary software platform was seen as a sign of the depth of its challenge taking on Apple's iOS and Google's Android platforms.

"It's a clear admission that Nokia's own-platform strategy has faltered," said Ben Wood, a London-based analyst with CCS Insight. "Microsoft is the big winner in this deal, but there are no silver bullets for either company given strength of iPhone and Android."

Stephen Elop, the new chief executive officer of the Espoo, Finland-based company, is struggling to revive the company after Nokia's piece of the fast-growing smartphone market plummeted to 27.1 percent last quarter from 50.8 percent when Apple shipped its iPhone in June 2007, according to Gartner Inc. The company has lost more than 60 percent of its share value in that time.

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