Will Nokia beat Apple and Google with Microsoft's help?

43350.jpegNokia Oyj, the world's biggest maker of mobile phones, said it's forming a software partnership with Microsoft Corp., betting that together the two companies can challenge Google Inc. and Apple Inc.

Nokia fell as much as 12 percent, the biggest drop in a almost 10 months, after its plan to make Microsoft's Windows its primary software was seen as a sign of the extent of its troubles taking on Apple's iOS and Google's Android platforms.

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

Nokia and Microsoft are working together out of necessity. Nokia didn't anticipate the shift in consumer demand to higher-end smartphones, while Microsoft failed to make inroads with its Windows Phone 7 software.

Now, both embattled companies are seeing their market share eroded by Apple and Google, whose iPhone and Android products dominate the lucrative, and fiercely-competitive, sector.

For Nokia, the situation is dire. Earlier this week, in an internal memo, Elop compared its scenario to a man standing on a "burning platform," faced with the choice of jumping into an icy ocean to escape the flames.

"Our platform is burning," he wrote. "And we must decide how we are going to change our behavior," Mobiledia reports.


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