Breaking News: Microsoft and Nokia announce strategic partnership

A few days ago in my review of Windows Phone 7 I talked about a rumoured partnership between Cell Phone maker Nokia and Microsoft..well it is no longer a rumour.

The two industry giants who have found themselves late to the smartphone party currently dominated by Apple, Android and BlackBerry announced a sweeping partnership agreement today.

Under the terms of the agreement:

·         Nokia will adopt Windows Phone as its primary smartphone.

·         Nokia will “innovate on top of” Windows Phone, in areas in which it has key strengths, including imaging.

·         Nokia will collaborate with Microsoft on the future of Windows Phone.

·         Nokia will use Bing as its search service and Microsoft adCenter as its advertisement delivery mechanism across its various devices.

·         Microsoft will integrate Nokia Maps into its mapping and location services.

·         Microsoft will integrate Nokia’s content and application store into Microsoft Marketplace.

Nokia President and CEO Stephen Elop says that the two companies have the resources and drive to succeed together. “There are other mobile ecosystems,” he said. “We will disrupt them. There will be challenges. We will overcome them. Success requires speed. We will be swift.”

The market didn’t share Elop’s optimism, Nokia shares were off 13.5% by noon.

There are a lot of questions..can two huge companies whose inertia has left them behind in the smartphone market somehow turn things around together..most analysts think not. And, what will Microsoft’s current Windows Phone 7 partners like HTC, LG, and Samsung who already have Android-based devices in the market and could choose to abandon Windows Phone 7 out of fears that Nokia is getting special treatment. How will Nokia which is still big in Europe but with no profile in North America help Microsoft in this key battleground.

I hate to end with a cliche, but only time will tell.

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