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5 Reasons Nokia Won't Save Microsoft's Mobile OS

By Paul Rubens (Send Email)
Posted Feb 15, 2011


Microsoft and Nokia are both drinking at the last-chance saloon as far as their mobile businesses are concerned, following last week's announcement that they are to team up in the mobile device market. For Microsoft, the deal is a desperate attempt to make its Windows Phone 7 mobile OS relevant at a time when its traditional desktop and server OS businesses face increased competition from open source solutions, cloud services and powerful mobile hardware.

Microsoft and Nokia have teamed up in the hope of at last conquering the smartphone market. Many are calling this a last ditch effort for both the phone maker and the OS vendor to have any sort of presence in this complex market. Here's why the venture is likely to fail.

Despite the good reviews Windows Phone 7 received, it's in grave danger of disappearing without having made any impact whatsoever. Ask yourself this: When did you last see anyone (who isn't a Microsoft employee) actually using the mobile OS?

Exactly.

But the Nokia Nokia (NYSE: NOK) deal will not save Windows Phone 7, and here's why:

1. Every time Microsoft does a deal with a mobile hardware maker, it fails.

We've been here before. Microsoft Microsoft (NASDAQ: MSFT) made plenty of deals with hardware makers to prop up its Windows Mobile OS, and all ended in disaster: LG (2009), Palm (2005) Motorola (2003), Sendo (2001) Ericsson (2000). The results should be making Nokia very nervous indeed: Sendo went bankrupt, LG and Motorola and Ericsson lost profitability in the market and switched to Android, and Palm couldn't make its Windows Mobile business a success and instead developed the WebOS mobile OS. Not exactly encouraging, is it?

2. A deal with Nokia can't hide Windows Phone 7's shortcomings.

Microsoft knows all about operating systems: The company has built itself into the giant it is on the back of its highly successful and hugely profitable Windows desktop and server OS products. One thing it learned over the years is that you can get away without rock-solid security and stability as long as your OS offers the features customers want. That's why Windows 7 is the huge, bloated product it is, and why Microsoft's server OS, Windows Server 2008 R2, includes advanced features like virtualization with Hyper-V.

But when it comes to features, Windows Phone 7 is pitiful. What were the big new ones that Microsoft was promising for the future at Mobile World Congress in Barcelona this week? Copy and paste, and multi-tasking! Two features that even the mobile OS Nokia is effectively abandoning -- Symbian -- has offered for years. Make no mistake -- Windows Phone 7 is miles behind iPhone, Android-powered phones and the rest of the competition.

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