Out of the Fire

So Stephen Elop’s jumped off his “burning platform” and now finds himself swimming in the water with Steve Ballmer. Sitting in the press conference to announce Nokia’s new partnership with Microsoft, I could sense their commitment to a shared fate, but they still have to drag themselves into the rescue boat.

Although I’d predicted that Nokia would select Windows Phone 7, I hadn’t anticipated the depth of the partnership. Nokia isn’t just licensing Microsoft’s platform, it’s throwing its lot in with the software giant, offering up key assets like Ovi Maps and firmly positioning Windows Phone 7 as its primary smartphone platform.

At this stage it strikes me that Microsoft’s the biggest winner here. With Nokia comes coverage of the mobile phone market on a global scale and a singular focus on Windows Phone 7. In contrast, other Windows Phone 7 licensees are hedging their bets, most notably by using Android. Nokia also makes great hardware and has strong capabilities in numerous areas, such as imaging technology.

There’s a popular hypothesis that markets ultimately gravitate toward the “rule of three”. Microsoft and Nokia clearly hope that their alliance will be the third player with Apple’s iPhone and the Android franchise.

Although it appears that Nokia started working with Microsoft on this deal in December last year, it typically takes 12 months to make a phone. Unless the two companies can deliver a miracle, they’ll miss the critical Christmas sales period. That means Symbian remains critical to Nokia, at least for now.

The next 12 months might not be as kind to MeeGo, Nokia’s other platform. When answering a question about MeeGo at the press conference, Stephen Elop stated “If something’s dead, it’s best not to ship it” — not a particularly good omen for Nokia’s involvement in the open-source platform.

It’s currently too early to draw definitive conclusions and it’s far from clear that these two Steves will be able to do anything to slow the progress of Steve from Cupertino or the team just up the road in Mountain View. Looking at media reports, it looks like Nokia risks being haunted by the infamous quote by former EVP, Anssi Vanjoki, at the time of the BenQ–Siemens Mobile merger: “Two turkeys don’t make an eagle”. Stephen Elop and Steve Ballmer will need to stop treading water and start flying very soon.