Nokia CEO Stephen Elop promised to make broad changes to address the phone manufacturer's declining market share, and today he delivered, unveiling the biggest shakeup since the company changed focus from rubber manufacturing to the telecommunications business almost 50 years ago what may be the biggest shakeup in company history: The company is partnering with Microsoft to use the new Windows Phone 7 software an all new smartphones going forward.
To date, Nokia has relied on the Symbian platform to drive its smartphone product line. Symbian will still be part of the Nokia lineup for certain devices, but will take a far lesser role going forward, regulated to the lower-end phones rather than smartphones.
The partnership means that the Microsoft Marketplace becomes the main app store on these devices. Nokia's Ovi store will be integrated into the Marketplace in some fashion that's not yet fully clear. Tero Ojanpera, one of the top execs many thought would be axed in a still-expected-but-not-yet-materialized management shakeup, will lead the Services and Developer Experience team making that integration happen, but only in and "acting" capacity.
The partnership also includes Nokia using Microsoft's search and advertising services, while Microsoft will rely on Nokia's mobile mapping services.
Additionally, the company will now consist of two business units: Smart Devices and Mobile Phones. The Smart Devices unit will focus on smartphones and other "smart" devices yet to be defined (tablets maybe?) while the Mobile Phone unit will continue to focus on lower-end devices.
On the personnel end, the rumored executive bloodbath hasn't occured. There is a new Nokia Leadership Team, which essentially just renames the former Group Executive Board and reshuffles some roles. So far only Alberto Torres, executive VP of the MeeGo smartphone OS consortium, is leaving -- an obvious result of the company's move to Windows Phone 7. But CEO Elop did point to "substantial reductions in employment" nationwide in the near future, the details of which remain pending.
So for now, the main news is the Windows Phone 7 development, which is huge. For starters, it's a major coup for Microsoft, which has never had a phone manufacturer -- much less one the size of Nokia -- adopt any of its mobile software on this kind of scale. The company is rumored to have paid Nokia "hundreds of millions" of dollars for the deal. No timeline given for when first Windows Phone 7 Nokia phones will hit the market, or where.
Windows Phone 7 launched in November of last year on a handful of devices and sold 1.5 million devices in the first six weeks of availability, according to data shared by Microsoft. That's respectable for a new technology, but tiny in comparison with the reach of competitors like Apple and Google.
This makes Nokia the second major phone manufacturer to hand over its OS duties to a third party. Struggling Motorola did the same in late 2008 when it made the Android platform its default smartphone technology. The move means app developers now have three major platforms to choose from and/or support-iOS for the iPhone ecosystem, Android, and Windows Phone 7.
Microsoft currently has about 8,000 apps available in the Windows Phone 7 ecosystem. But it's not designed to be the same kind of all-thing-all-people type of app store that defines Apple's App Store. Instead, it aims to pick a handful of winners and let them shine and ignore the clutter.
Music apps available via Windows Phone 7 to date include Slacker, iheartradio, MusixMatch and a handful of others, with a Spotify app reported to be on the way.