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Nokia has its task cut out

Nokia and Microsoft need to develop products fast since competitors are doing so with relentless zeal.

The burning memo written by Nokia’s chief executive officer Stephen Elop has been read by almost everyone who is interested in the smartphone segment. The memo itself was brutally honest, to say the least, and spoke about how Nokia’s strongest competitors, both Google and Apple, have been consistently doing better and outmaneuvering the company. That has meant continuous loss of market share for Nokia.

Steve Ballmer, the chief executive officer of Microsoft, has his stamp on the deal as it’s always been his strategy to get Microsoft everywhere, and he has managed to create a win-win situation this time around. There are some basics that Nokia will still have to get right. The first is that it has to come up with a product fast. People are not going to wait long. The market is moving at a quick pace, and Nokia will have to do the same.

Android handset makers are coming up with dual core processors, and powerful supporting features, and Nokia too will need to create something concrete soon enough. At the same time, Windows Phone 7 will need some apps with the punch that’s been missing so far. Microsoft has also maintained a good rapport with the developer community by handing out phones, T-shirts etc; it just needs to build on this.

The crux of Stephen Elop’s announcement was a broad strategic partnership with Microsoft, as well as an attempt to build a global mobile ecosystem. The decision was to go with Windows Phone 7 as the primary smartphone platform for Nokia. The company will also develop a new approach to capture the next billion internet connections.

Nokia will use Bing as the primary search engine, whereas Nokia Maps will become part of Microsoft’s mapping service. The content and store from Nokia will be merged with Microsoft’s.

The decision, of course, proved hard for anyone who was betting big on Symbian or MeeGo ( an open source platform being developed by Intel in association With Microsoft and other developers). Will the decision make any difference to Europeans, who buy large numbers of Nokia phones? Like all business deals, even this is not without its own risks, but one thing is for sure — Microsoft is definitely going to support the Windows Phone 7 platform, so Nokia can expect a stable period in which it may try out its own strategies.

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