Nokia and Microsoft? Just maybe

Nokia Chief Executive Stephen Elop (L) gestures as he sits with Microsoft CEO Steve Ballmer during the Nokia Strategy and Financial Briefing at the Intercontinental Hotel in London, on February 11. Photo: AFP

Before there were smartphones Nokia made smart phones. Sleek. Colorful. Attractive. Sporting a distinctive, trademarked ring that, because there are so many Nokia handsets in the world, may actually be heard 20,000 times a second.
Nokia's phones never made a huge splash in the United States, but worldwide they are to this day the market leader with some 300 million in use. In Q4 of last year, Nokia's flagship Symbian mobile phone operating system boasted more than a third of the world's market share. At nearly 37 percent, that was 10 percent more than the range of devices running Google's Android, and more than Apple's iPhone and Rim's Blackberry combined.
But Nokia is losing, by leaps and bounds. The handwriting is on the wall. Nokia CEO Stephen Elop, who joined the company only last September, minced no words last Wednesday when he said the company was standing on a “burning platform.”
So it really came as little surprise when two days later the company announced a massive strategic alliance with Microsoft that would mean the end of Symbian and the adoption of Windows Phone 7 by the finicky Finnish handset maker.
Nokia had nowhere to go. The paradigm shift in mobile phones began little more than three years ago with the first iPhone. That isn't a lot of time to go through the five stages of grief, even if Nokia had immediately appreciated the seriousness of the iPhone challenge.
Oh, if only Nokia could come up with an operating system that wasn't so evolutionary.
Microsoft has nowhere to go, but up. It has never moved the needle much in the mobile space, and insists on slapping Windows onto everything. But finally, with WP7, Microsoft is getting previously elusive favourable reviews from the tech press.
Oh, if only Microsoft had a handset partner that could put their OS in enough hands to go viral.
Windows Phone 7 will continue to be on plenty of other phones -- Samsung HTC, LG, Dell -- but Nokia is a jewel in the crown. Nokia could have gone with Google's Android, the fastest growing mobile OS. But with Microsoft it gets a mega-marketing partner instead of a company so unprepared to face customers it stopped selling the Nexus One after seven months.
The new partners say 2011 and even part of 2012 will be “transition” years, but they need to come up with something quickly. Apple and Google aren't going to stop innovating to let them catch up.
Elop is not only new to Nokia but a former Microsoft hand, so it wouldn't have been much of an emotional call for him to put Symbian out to pasture. But neither is it a surrender.
Nokia's course change seems bold, the sort of high-risk gambit you don't see much from the corner office. It's right up there with Apple's decision to stop licensing the Mac OS, Coke's decision to stop selling their flagship product (without the delusional part), and Arianna Huffington's decision to become a liberal.
Two tech powerhouses have just humbly admitted that they are now the underdogs in what will be a long slog against unexpectedly successful upstarts in a space that is still anybody's to win.
How do you not root for that?

The writer is the New York bureau chief, Wired.com