Nokia confirm joining forces with Microsoft

KitGuru has been covering the potential alliance between Nokia and Microsoft for weeks now and our predications came true. They are forming a software partnership with Microsoft in the efforts to challenge Google and Apple in the mobile sector.

Shares have fell by up 9.8 percent however after the announcement, as this merger might seem positive it was an indication that Nokia are struggling to maintain marketshare against Google Android and Apple iOS devices.

Ben Wood, analyst with CCS Insight in London said “It’s a clear admission that Nokia’s own-platform strategy has faltered, Microsoft is the big winner in this deal, but there are no silver bullets for either company given strength of iPhone and Android.”

The challenges facing the new Nokia CEO Stephen Elop are significant. Nokia's share of the smartphone market has dropped to 27.1 percent from 50.8 percent when Apple shipped its iPhone in June 2007. This is a huge drop and according to Gartner Inc, the company has lost more than 60 percent of its share value in that time also.

Microsoft are also battling to get marketshare and acceptance for their new Windows Phone 7 software, however they claim to have shipped more than 2 million licenses for the new smartphone system in its first quarter on the market.

Since Elop have moved from Microsoft to lead Nokia on their new strategy he announced 1,800 job cuts in the workforce of 120,000 and has adjusted the development process for the Symbian smartphone code. He also appointed a new marketing chief, Jerri DeVard.

Since he has taken the leadership role, Google's Android software has become the biggest smartphone operating system, passing Nokia's Symbian, according to Canalys and IDC analysis. Their latest N8 smartphone heralded significant improvements, but has not been enough to help push their marketshare to mount a challenge.

KitGuru says: By comparison Google Chief Executive Eric Schmidt has said that his company is activating more than 300,000 phones per day.

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