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Nokia Joins Forces with Microsoft

Windows Phone will replace Symbian as Nokia's main smart phone platform. Nokia CEO Stephen Elop said in a speech in London Friday that significant reductions in Nokia's payroll are also expected as the company slashes research and development spending, including in Finland.

Nokian lippulaivamyymälä Helsingin Aleksanterinkadulla.
Yksi Nokian lippulaivamyymälöistä sijaitsee Helsingin Aleksanterinkadulla. Image: YLE

Nokia's applications store, Ovi, will be integrated with Microsoft Marketplace, and there will be further collaborations in search and search advertising. Microsoft's Bing will become the search engine on Nokia devices.

The Symbian platform will be repositioned as a "franchise platform", yielding the main position to Windows Phone. MeeGo, on the other hand, is expected to remain a long-term development for smart phone devices, and a MeeGo-based phone will be released this year.

Changes at the Top

A widely expected executive board shakeup is also on the cards.

Alberto Torres, the Executive Vice President for MeeGo computers and mobile solutions, will leave the board. In addition, four new members will be anointed among the company's top executives: Colin Giles, Rich Green, Jo Harlow and Louise Pentland. Jo Harlow will head the Smart Devices unit.

Nokia aims to create a new 'ecosystem' of software developers, programmes, products and services that will convince people it can take on Apple and Google.

Nokia still sells more handsets than anyone else in the world, but is not making big margins on its high-end phones. The key to reversing this position lies in changing the software from Nokia's Symbian system, but analysts wondered if Nokia had made the right choice.

The job cuts were not enough to reassure investors, and Nokia's share price tumbled on the news 10 percent on the Helsinki Stock Exchange in reaction to the news, before rising slightly. Nokia said that 2011 and 2012 would be "transition years", following which average margins on handsets would be ten percent or more.

"Given that the people who were positive on the stock were looking for mid-teens devices margins by 2012, we can see some cuts to estimates," explained Richard Windsor, global technology strategist at Nomura.

More on this topic:

Mixed Reactions to Nokia Announcements

Elop's Burning Platform Memo Raises Expectations

Government to Help if Nokia Cuts Jobs: Pekkarinen

Nokia Informs Workers Of Changes

Sources: YLE

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