Microsoft and Nokia (NYSE: NOK) announced today that they are investigating new areas of collaboration and will kick off the alliance by bringing Microsoft Office products to Nokia phones. The partnership comes at a time when the two companies have aging operating systems and are coming under fierce attack by Research In Motion, Apple (NSDQ: AAPL), Google (NSDQ: GOOG) and Palm (NSDQ: PALM).
Gartner said today that in the second quarter, 40 million smartphones were sold, increasing 27 percent compared to the year ago period. Release. When it comes to operating systems, competition is hurting both Nokia and Microsoft (NSDQ: MSFT). Symbian, which is the main operating system that Nokia uses, dropped to 51 percent marketshare, down from 57 percent a year ago and Microsoft’s share dropped to 9 percent. Meanwhile, RIM (NSDQ: RIMM) and Apple both grew and Android’s share jumped to 2 percent. Still, Nokia remains the largest smartphone manufacturer worldwide with RIM in second and Apple in third.
Clearly, when two competitors like Microsoft and Nokia come together, it shows that times are tough. But it’s unclear what the two companies will tackle next or how deep the relationship will be. In a call this morning, the two companies said there were no plans to put Windows Mobile on Nokia phones, although they will be researching new areas for development. With Microsoft’s wide area of focus, that could translate into everything from games to search.
But it’s really the OS where the two are suffering the most. Microsoft will soon release a new finger-friendly version of its old operating, as it prepares for an entire overhaul next year. Likewise, Nokia is retooling Symbian, first by buying-out the company and then recreating it as an open-source platform. A new version will support touchscreens more easily, but it still won’t be ready for some time.
If Microsoft’s new operating system to be released next year is up to today’s standards, Nokia should consider it an option, especially if it wants to lure business users and the high-end consumer segment (that doesn’t mean it can’t still also develop Symbian phones). If rumors are at all correct, Nokia may be wavering on its commitment to Symbian. Yesterday, undisclosed Nokia sources speaking to the Financial Times in Germany (via TechCrunch), said that Nokia doesn