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Nokia is in a unique relationship with Microsoft, contributing a range of its own assets, ranging from global scale, distribution, marketing and retail expertise to online services such as Ovi Maps and slick turn-by-turn navigation. That, combined with Microsoft experience as a platform vendor, and the strengths of the radically redesigned mobile UI, will "move the needle," says Kai Öistamo, Nokia executive vice president and chief development officer.
Nokia, which has a small market share in the United States, had a more visible presence at this week's CTIA Wireless conference in Orlando, with a booth on the show floor and an announcement at the show by T-Mobile about a sleek new smartphone, the Nokia Astound. The new phone may be among the last to run a version of Nokia's trademark Symbian mobile OS, and a harbinger of what users can expect in a Nokia-branded Windows Phone.
That's because in February, Nokia and Microsoft announced a wide and deep alliance around Windows Phone 7.
The handset maker, which has been struggling in the past three years in the exploding smartphone market, chose the Microsoft OS as the firmware for all future Nokia smartphones. To do so, Nokia will pay Microsoft a licensing fee.
But Nokia's relationship with Microsoft is different from the other Windows Phone licensees, who launched the first crop of handsets, HTC, LG, and Samsung. Nokia alone has the right to customize the Windows Phone UI. Neither Microsoft nor Nokia has gone into detail about what that means.
But according to Öistamo, it means that Nokia is going to be very careful that any changes will not break Windows Phone applications or disrupt the development environment for programmers.
"Even if we have the right to change it, it would be unwise to change it in ways that cause problems," he says. Instead, Nokia plans to exploit the underlying OS to leverage both on-device features and a range of Nokia services: imaging, cameras, maps and navigation, to name just a few. Many of these changes, as well as the services themselves, are intended to flow back into the Windows Phone platform, to become accessible to developers.
Windows Phone 7 creates an opportunity for Nokia to add value to the mobile platform, whereas that would not be the case with Google Android, Öistamo says. For example, Nokia's navigation and mapping services would be in direct conflict with Google's similar offering. "We asked 'what is the value [to be added]?'" he says. "That's what you get paid for."
"We are contributing mapping and other assets across Microsoft," Öistamo says. "We get rewarded for that."
Another revenue opportunity is exploiting the two companies' combined assets to create new revenue sources. Öistamo cites the example of Nokia's mapping technology married with Microsoft's Bing search engine to create highly local and specific advertising impressions.