Nokia this morning confirmed it is to partner with Microsoft in an effort to turn around its ailing fortunes in the smartphone space. It also announced a company restructuring.
Microsoft’s Windows Phone 7 platform will serve as Nokia’s “primary smartphone platform,” according to a statement. The two companies will work closely on combining their mobile services: “Nokia Maps, for example, would be at the heart of key Microsoft assets like Bing and AdCenter, and Nokia's application and content store would be integrated into Microsoft Marketplace,” added the statement. “Under the proposed partnership, Microsoft would provide developer tools, making it easier for application developers to leverage Nokia's global scale.”
In a reference to the momentum built by Apple and Google’s Android in the smartphone space, Nokia CEO Stephen Elop declared that the Nokia/Microsoft tieup will mean the market is now “a three-horse race." Steven A. Ballmer, Microsoft CEO, claimed the partnership “provides incredible scale, vast expertise in hardware and software innovation and a proven ability to execute."
As for Symbian (the operating system owned by Nokia), the Finnish vendor said it will become “a franchise platform, leveraging previous investments to harvest additional value.” Nokia claimed it still expects to sell approximately 150 million more Symbian devices in years to come. Meanwhile MeeGo – the platform developed in partnership with Intel that was being geared towards very high-end mobile devices – becomes “an open-source, mobile operating system project.” Somewhat mysteriously, Nokia said MeeGo will place “increased emphasis on longer-term market exploration of next-generation devices, platforms and user experiences.” Nokia still plans to ship a MeeGo-related product later this year.
As well as the software overhaul, CEO Stephen Elop also this morning announced a new leadership team, consisting of Stephen Elop, Esko Aho, Juha Akras, Jerri DeVard, Colin Giles, Rich Green, Jo Harlow, Timo Ihamuotila, Mary McDowell, Kai Oistamo, Tero Ojanpera, Louise Pentland and Niklas Savander. Interestingly, the major culling of top names – predicted earlier this week – appears not to have occurred, with only Alberto Torres (Nokia's executive vice president, MeeGo Computers), missing from today’s reshuffle. However, redundancies may be in the works; the Nokia statement noted that “the new strategy and operational structure are expected to have significant impact to Nokia operations and personnel.”
As of April 1, Nokia will have a new company structure, which features two distinct business units: Smart Devices and Mobile Phones. They will focus on Nokia's key business areas: high-end smartphones and mass-market mobile phones, respectively.
Smart Devices will be run by Jo Harlow and the following sub-units will fall under her remit: Symbian Smartphones, MeeGo Computers and Strategic Business Operations. Nokia said that to support the planned new partnership with Microsoft, Smart Devices will be responsible for creating a “winning” Windows Phone portfolio.
Mobile Phones will drive Nokia's "web for the next billion" strategy and will be led by Mary McDowell.
Elsewhere at the vendor, ‘Markets’ will be headed by Niklas Savander and will be responsible for selling products, marketing and communications, customer care, manufacturing, IT and logistics across all Nokia products. Services and Developer Experience will be responsible for Nokia's global services portfolio, developer offering, developer relations and integration of partner service offerings. Tero Ojanpera will lead the Services and Developer Experience unit in an acting capacity.
"Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward," said Stephen Elop, Nokia President and CEO. "Today, we are accelerating that change through a new path, aimed at regaining our smartphone leadership, reinforcing our mobile device platform and realising our investments in the future."
Elop declined to provide annual performance targets for 2011 in light of today’s announcement. The firm said 2011 and 2012 will be “transition years, as the company invests to build the planned winning ecosystem with Microsoft.” After the transition, Nokia expects its Devices & Sales unit to grow “faster than the market.”