Nokia Can’t Rescue Microsoft’s Mobile OS

A number of tech pundits have voiced doubts about the recent Microsoft-Nokia alliance, opining that it’s a partnership of two wounded giants. Paul Rubens details his concerns.

Microsoft and Nokia are both drinking at the last-chance saloon as far as their mobile businesses are concerned, following recent 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.

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.

Read the rest about the Microsoft-Nokia alliance at ServerWatch.