Look Out Apple! Now they're teaming up to beat you
It would seem that Apple’s dominance in the business mobile market is now considered to be so great that even global organisations are putting any differences aside to try and topple the technology giant.
It has just been announced that Nokia and Microsoft will be holding a joint press event in New York on 5 September.This announcement has boosted expectations that it will be to reveal the long-awaited Windows smartphone upgrade before rival Apple rolls out its next iPhone – expected to be announced exactly a week later.
The Finnish mobile phone maker gave no details about the September event, but chief executive Stephen Elop said earlier on Wednesday the company would “soon” unveil a new smartphone using Microsoft’s latest smartphone software known as Windows Phone 8.
Nokia has been fighting for survival after ceding vast ground to rivals Apple and Samsung in recent years. In 2011 it forged a software alliance with Elop’s former employer, Microsoft, which has also fallen behind in smartphone software to both Apple’s iPhone and Google’s Android mobile operating system. Its mobile phone business has made deepening losses for the past two quarters, while its smartphone business has shrunk even as the worldwide market has grown by about 50% annually.
For both Nokia and Microsoft, the upcoming version 8 of Windows Phone will be a key weapon in trying to regain leverage in the smartphone business. The next version of Windows Phone will use the same code kernel as Microsoft’s forthcoming Windows 8 – which has just been “released for manufacture” to computer makers – meaning that for programmers it should be simpler to write apps that will run across both platforms, while the appearance of the Windows Phone interface, using large tiles rather than the small icons of Apple’s iOS and Google’s Android, will become more familiar to millions of users around the world who buy Windows 8 PCs.
Windows 8 will go on sale near the end of October, Microsoft has said.
Nokia has not commented on specific plans for its Nokia World trade show event, which occurs on 5 and 6 of September in Helsinki. Speaking to reporters in Oslo, Norway, on Wednesday, Elop said only that Windows Phone 8 smartphones would be released in the “relatively near term.”
Nokia shares, which have been trading near all-time lows, rose sharply in Helsinki after Elop’s comments and gained 3.4% to close at €2.07 ($2.55) in Helsinki on Wednesday. Its US shares closed up 6% at $2.64 on the New York Stock Exchange.
But the boost from expectations over handsets was marred after the ratings agency Standard & Poor’s downgraded Nokia’s credit rating below “junk”, to BB- with a “negative” outlook. S&P cut Nokia’s rating in April to BB+ – junk status – meaning conservative investors such as pension funds will consider it too risky to hold.
Elop, who was brought in from Microsoft two years ago to lead Nokia’s fight against Apple and Samsung, said he was sticking to his strategy of using Microsoft software despite the limited success of Windows phones so far. Figures from the analysts IDC and Gartner suggest that Windows Phone saw a few million shipments in the second quarter of 2012, compared with tens of millions for the iPhone and Android phones.
Nokia lost €1.53bn in the second quarter while selling just 4m Windows phones, well short of Apple’s 26m iPhones and Samsung’s estimated 50m smartphones.
Nokia decided in early 2011 to ditch its homegrown Symbian software in favour of Microsoft’s, and has also begun a radical restructuring in which it is closing factories and getting rid of tens of thousands of jobs to slim down its workforce. Even so, Symbian phones still outsell its Windows Phone products.
“I don’t think about rewinding the clock and thinking about competing elsewhere,” Elop told reporters in Oslo. “In today’s war … (between) Android, Apple and Windows, we are very clear, we are fighting that with the Windows phone,” said Elop, who was in Oslo for a meeting with Jon Fredrik Baksaas, the chief executive of the Norwegian carrier Telenor ASA.
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