Nokia and Microsoft, Together They Could Dial It Up to Eleven

Nokia has suffered somewhat as it’s tried very hard to get its MeeGo platform up to spec but the market just isn’t giving it the goods it needs. In spite of taking aim at the iPhone, they have certainly been falling a bit short. Not long after the last release of MeeGo and it’s merger with Intel’s Moblin, and the losses of a string of VPs, rumors began to emerge about Nokia heading into Microsoft territory—specifically Windows Phone 7.

Those rumors are beginning to come to a narrow sort of fruition now, with speculation on the high All Things Digital’s John Paczkowski quotes analyst T. Michael Walkley about the direction that Nokia could head now that they have a new CEO at the helm.

“We believe Microsoft needs more support from a leading device OEM to compete with Android longer term and Nokia likely needs to adopt a new high-end smartphone strategy to stem smartphone share losses,” Walkley says. “Further, Microsoft could create a differentiated tablet strategy with stronger enterprise support and Nokia could clearly benefit with a tablet and smartphone combined strategy that is offered by competitors….We believe the combination of Microsoft’s marketing muscle and software expertise with WP7 and Nokia’s global brand, distribution and scale advantages could drive solid sales of WP7-based devices worldwide. Additionally, it would provide Nokia a much-needed re-entry into the North American market, where its market share has stagnated at low-single-digit levels for multiple years.”

In other words, a Nokia-Microsoft alliance could bolster the WP7 ecosystem to the point where WP7 becomes a third dominant mobile OS alongside Android and iOS.

It seems to be a toss-up across the analyst community over if Nokia chooses to go with a 3^rd party OS in the wake of the crumbling of MeeGo that they might embrace Android or Windows Phone 7. Of course, Android is already everywhere and free-to-grab for anyone who wants to get in on development and they’re happy to take more big manufacturers; but Microsoft, already feeling the heat dealing with Android, might just subsidize Nokia should they choose to court them.

Of course, this would mean that Nokia’s new CEO, Stephen Elop, would have to dump most of the previous work they made on MeeGo and other projects that the company has already sunk a lot of time and energy into. Going to another platform would be a black-eye for the development and show that the company acknowledges it as a bad move, which might hurt their valuation.

That also said, if they choose to jump onto the coattails of a big mover like Microsoft, they’ll have a lot of already existing momentum they could catch themselves in—and, seeing how their products are flagging, they really need the boost. Even with their woes, Nokia is still an extremely well known and powerful and would be a welcome addition to Microsoft’s stable.