February 11, 2011 by staff
NOK, Nokia (NYSE: NOK), the leading global manufacturer of phone, will use Microsoft’s (NYSE: MSFT) Windows OS Phone the main software for its smartphones in an effort to stem market share slide Nokia.
Under the agreement, Nokia and Microsoft will jointly create phones and services, with each focusing on the heart of their skills. Nokia will contribute to the design of materials and distribution in many countries.
The phones use the search engine Bing Microsoft and Nokia Maps (Nokia bought Navteq cartographer in 2007).
CEO Stephen Elop, Nokia, at a news conference in London on Friday, “Nokia and Microsoft will join forces to deliver an ecosystem with an unparalleled global reach and scale. It’s now a race three horses. ”
The announcement comes just days after news reports revealed an internal memo written by CEO Stephen Elop Nokia makes ananlogy between the position of the company in the smartphone market with a platform on fire and that the company continued to pour more oil on the fire.
Regarding today’s announcement of an agreement with Microsoft, Elop said, “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. “Nokia and Microsoft will join forces to deliver an ecosystem with an unparalleled global reach and scale. It is now a three-horse race.” Shares of Microsoft were up nearly 1% in pre-market, as the software company emerges as a clear winner in this new relationship.
Nokia (NYSE: NOK) announced it would jointly create phones with Microsoft (NASDAQ: MSFT), where Nokia will use Microsoft’s Windows Mobile operating system as the primary software platform. The movement comes from both companies seek to challenge the dominance of Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG) on the smartphone market.
Nokia said it expects 2011 and 2012 will be the “transition years” as the company invests time and resources to build its ecosystem with Microsoft. The company then said it expects that its device and service company to grow faster than the market and return on operating margins of at least 10%.
Shares of Nokia fell to the announcement by as much as 12% as operators for the announcement as a virtual admission that its existing platform Symbian has been a failure and the belief that the company may have taken too behind both Apple and Google on the smartphone market.
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