Nokia cuts jobs, slashes R&D; adopts Microsoft’s Windows Phone ’07 in iPhone killer quest

“Nokia and Microsoft teamed up on Friday to build an iPhone killer in a desperate attempt to take on Google and Apple in the fast-growing smartphone market,” Tarmo Virki reports for Reuters.

“Nokia said using Microsoft’s Windows Phone software in its smartphones would speed up new product launches, but shares in the world’s largest cellphone maker fell sharply on uncertainty about the financial impact of new chief executive Stephen Elop’s strategic u-turn,” Virki reports. “‘It is now a three-horse race,’ said Elop, who was drafted in to head Nokia from Microsoft last September.”

“Elop said the partnership would mean job cuts around the world, while research and development spending would also be slashed,” Virki reports. “Investors were unconvinced by Elop’s new strategy and Nokia shares tumbled 10 percent after Nokia said 2011 and 2012 would be ‘transition years,’ fuelling fears of a negative impact on margins.”

“Nokia also said it would use Microsoft’s Bing search engine across its cellphones, potentially opening up a huge market for Microsoft as it seeks to build up its challenge to Google as the world’s leading search engine,” Virki reports. “Analysts said the Finnish company, which invested billions of dollars in building up mobile internet services under its previous CEO, had effectively admitted defeat in its services strategy by joining forces with Microsoft.”

Read more in the full article here.

Tiernan Ray reports for Barron’s, “And what about the Symbian and MeeGo operating systems? In a separate [press] release, Nokia said it intends to sell ‘approximately 150 million more Symbian devices in the years to come,’ as Symbian ‘becomes a franchise platform, leveraging previous investments to harvest additional value.’

“I have no idea what Nokia means by all that babble, but it sounds like they’re letting it go out to pasture,” Ray writes.

Ray reports, “MeeGo ‘becomes an open-source, mobile operating system project,’ said Nokia. ‘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.’ Farewell, perhaps not forever, MeeGo. Alberto Torres, head of the team that was developing MeeGo, is leaving the company, effective February 10 ‘to pursue other interests outside the company.'”

MacDailyNews Take: Adios, Alberto.

Ray reports, “Given the ‘transitional’ nature of all that, Nokia said it wouldn’t provide a forecast for the full year for its mobile phone business. After the transition, which may not be until next year, or may not be until 2013, Nokia’s goal is to increase sales of devices and services ‘faster than the market.'”

Read more in the full article here.

MacDailyNews Take: The change Apple has wrought is a wonder to behold.

Google’s Microsoftian quest is being hurt by Microsoft. “We’ll be the settlers’ second choice!” “No, we’ll be!”

And, so it goes: Nokia gives up, sells soul to Microsoft, becomes just another phone assembler, but at least their OS of choice isn’t riddled with Apple’s IP. Next domino: RIM.

Happily, things are going from bad to worse for Android. Ain’t Karma’s a bitch, Googlesoft?


    1. This going according to plan. It’s what Elop is good at. He moved over to Nokia, to begin clearing the deadwood, before Microsoft buys the company.

      Elop sold Macromedia to Adobe and then created a high-salaried job that oversaw Adobe’s world-wide operations. That is a lofty perch with quite a view.

      Microsoft will buy Nokia with Elop’s help on the inside. But as I said, he’ll have to clear out any obstructionists and dump the fat.

  1. this is suicidal, Nokia is making a huge mistake. they will only lose more market share, and microsoft isn’t gaining anything. two bad products combined, how is that a solution to anything ?

  2. This is a good thing. Nokia has the resources to make WP7 viable, and more competition is never a bad thing. I much prefer a three-horse race to a two-horse. I continue to hope that Apple will someday dominate phones, but realistically, I don’t ever see that happening. In that world, it’s preferable to have three competitors to ensure one doesn’t completely dominate.

  3. I wouldn’t say that Windows Phone 7 isn’t “riddled with Apple’s IP”, it’s just that Microsoft is smart enough to actually have cross licensing agreements in place with Apple.

  4. Nokia is going to be the only one selling smart phones in 2011 that can’t run HTML5 at all.

    Why would anyone choose to put Internet Explorer on a phone in this day and age, especially when Webkit is free and ubiquitous?

  5. There are vast masses in the world for whom mobile phone equals Nokia. Amazingly enough, there is still a very strong brand value in it. With WinMob 7 arguably slicker than Symbian (especially for touch screens), Nokia does stand a chance picking up some percentage points there.

    As the article argued, those percentage points will no doubt be taken from HTC, LG, Samsung and Moto (running Android, obviously), and not from Apple.

  6. Not only that. RIMM is showing the way out of google. They are showing that underneath that drag of a queen called android-dalvik is pure Java.

    Only problem is, will there be a falling out between Ellison and apple once java mobile takes off.

  7. there is a reason why apple products software/hardware integration and UI are made by one company. Throwing more chefs ego’s in the cooking process screws up the recipe.

    Until the ego’s are thrown out and they form a subsidiary company whose only focus is bringing the UI/Software/Hardware experience seamlessly together. Apple has been doing this since 1984. What can these companies expect literally “phoning it in”?

    How could you release a product you half made? I can only imagine that Apple’s design room is much like an master’s program art critique. IF you have been an art student, you know what I am talking about. How can you be proud of a product you as a company are only HALF-invested in?

    This is why Apple does not have to fake pride in their products. Everyone accuses apple of having a tax on their products. Yea their products may be pricier upfront, but all that invest comes in the back end, everytime. (As I type on MBP from ’07 and my Mac Pro from ’05).

    These other companies take pride in how “cheap” or competitive their products are. Apple has no interest in selling all the hard work for bargin-bin prices. Excluding apple, every other manufacturer slaps an OS from another company on their products expects that everything is going to be fine.

    1. ah, rethoric, you are sooooo new school, I’m still using my 2004 PowerBook….lol, I’m totally with you there, my 2005 first gen Mac mini has also been running 24/7 ever since I bought it in Feb 2005.

  8. Oh … that must hurt national pride and some peoples sensibilities.

    So –
    Smart Devices will be responsible for building Nokia’s leadership in smartphones and will be led by Jo Harlow. The following sub-units now in Mobile Solutions will move under Smart Devices:
    – Symbian Smartphones
    – MeeGo Computers
    – Strategic Business Operations

    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. Mobile Phones will leverage its innovation and strength in growth markets to connect the next billion people and bring them affordable access to the Internet and applications. The Mobile Phones unit will be led by Mary McDowell

    A couple of friends of mine have Windows Seven phones each, both htc’s and both phones have a craptastic touch interface system … personally I like the UI philosophy, it’s just badly implemented.

  9. Two Turkeys don’t make an eagle was the twitter burn to which Elop responded “Or this: Two bicycle makers from Dayton Ohio, one day decide to fly”

    It’s a great comeback but comparing bolting Windows Phone 07 onto a Nokia to the invention of the first successful powered fixed wing airplane, shows that this guy overestimates his self importance.

  10. “Rubbing hands in glee”

    At last the realization of world domination in operating systems (>95% Windows market share vs. OS X rounding error), mobile platforms (combined 50% share in Symbian, WP7, Meego and growing), tablets (nascent market in which Windows 8 will come to dominate), business productivity software (100% in MS Office and counting vs. iWork 0% share).

    Hehehe. Good times, good times, they are a coming.

    1. “We’ve had one of these before, when the dot-com bubble burst. What I told our company was that we were just going to invest our way through the downturn, that we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into Apple in the first place – the last thing we were going to do is lay them off.”

      Steve Jobs.

  11. Elop is trying to turn a two-horse race into a three-horse one. Everyone knows iOS and Android are here to stay. Noone knows who will be #3. Will it be Rim’s QNX? WIll it be WebOS? Will it be Samsung’s Bada? Will it be WP7? This is Nokia placing their bet on WP7.

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