Skip to main content

Nokia outlines restructuring, benefits of Microsoft WP7 partnership

nokia-plan-to-move-forwardnokia-plan-to-move-forward-stephen-elop-ceoDuring its second press conference today, Nokia elaborated on a number of points related to the Finnish mobile companies adoption of Microsoft’s Windows Phone 7 platform. Nokia executives, led by CEO Stephen Elop, clarified the roles between the hardware and software companies and several layers of restructuring that will help Nokia achieve this transition. Below are some highlights of the event, separated by topic. For an initial outline of the partnership between MS and Nokia, head here.

Elop clarified Nokia’s view that the smartphone race has shifted from a battle over devices to a war over ecosystems. “We, as a company needed to change our course in order to advance our mission,” said Elop. “Our mission is clear: to build great mobile products.”

Nokia’s three business objectives:

  1. Regain leadership in smartphone market
  2. Reinforce leadership in mobile phones
  3. Invest in future disruptions
Recommended Videos

Benefits of choosing Windows Phone 7

nokia-plan-to-move-forward-wp7-plusses-and-minuses
Image used with permission by copyright holder

Under the “unique” agreement between MS and Nokia, the Finnish company technically could change a large portion of the appearance and inner workings of WP7, but Stephen Elop believes that Nokia’s WP7 devices need to retain the characteristics of the Windows Phone platform in order to push the WP7 ecosystem forward. First and foremost, Nokia wants to help Microsoft push WP7 as a platform and make sure that succeeds so that the ecosystem around the platform continues to grow to challenge iOS and Android.

“Another concern is a loss of control,” said Elop. “From what we’ve established, we’ve taken steps to assure that we have flexibility and a degree of control. This is not your mother’s OEM deal with Microsoft. Microsoft is placing a critical bet on Nokia.”

Nokia will put a focus on its own products and services on its WP7 devices, further differentiating its own products from other Windows Phone devices as the platform takes off.

The newness and low adoption rate of WP7 is of concern to Nokia, but Elop believes that having a strong hardware partner will help Microsoft overcome many of its challenges.

Nokia and Microsoft will each contribute services and technology to one another and co-brand the collaborations. For example, Nokia will integrate with Bing and maybe call it “Nokia search, powered by Bing,” while Microsoft will integrate Nokia’s Maps services into its search engine and maybe call it “Bing Maps, powered by Nokia.” No definitive branding has been established yet.

Bureaucracy between Microsoft and Nokia

Though Nokia will have a deep relationship with Microsoft on the development of WP7, Elop does not believe that the relationship between the two companies will be overly complicated and bog down innovation and time to market. From the ground up, the deal has been constructed so that both companies have differentiated roles in the partnership, explained the CEO. Microsoft is responsible for software; Nokia is responsible for hardware; and the two companies will work on services together. “The whole structure of the arrangement has been done for simplicity,” said Elop.

Why Nokia rejected Android

Advantages: “It is a strong growing ecosystem,” said Elop. “It gives us a rapid way to enter the US market.”

Disadvantages: “We felt that we would be one of many in that ecosystem and somewhat late to the game,” said Elop. “We had to assess our ability to differentiate within the ecosystem. The Google option is a valid option, but frankly at the end of the day it felt a little like giving up.”

New leadership structure

nokia-plan-to-move-forward-executive-chart
Image used with permission by copyright holder

Nokia will be splitting standard mobile phones and smartphones into two distinct units at the company and adding end-to-end accountability. Other major changes include the Design team and Services & developer teams now report directly to the CEO, emphasizing Nokia’s commitment to these two areas. In addition, due to the new deal, Navteq (Maps) development will be of greater importance to the company. Finally, taking advantage of patents and IP is becoming increasingly important to Nokia. CEO Stephen Elop sees patents and royalties as an important revenue opportunity. A new leader for North American sales will also be chosen soon.

Financials not good

nokia-plan-to-move-forward-bad-revenue
Image used with permission by copyright holder

During its financial portion of the briefing, Nokia’s CFO was blunt: “Simply put, we did not meet our targets. I believe the targets were appropriate at the time, but we did not execute.”

The graph above and others showed how Nokia has fallen behind in a market that is growing rapidly. The company believes Windows Phone 7 and its many restructuring efforts will change that.

Jeffrey Van Camp
As DT's Deputy Editor, Jeff helps oversee editorial operations at Digital Trends. Previously, he ran the site's…
Pocket is about to close. Use this read-it-later app instead
A woman looking at her phone.

Read-it-later app Pocket is closing down in just a week’s time, so if you’re still using it, now’s the time to switch to a similar app.

As an avid user of Pocket pretty much since it launched in 2007 as Read It Later, I felt a little sad to receive a message in May informing me that it would be shutting down on July 8.

Read more
The ultimate entertainment tablet: Like-new Fire Max 11 now $130
The back of the Amazon Fire Max 11.

Prime Day isn't officially here yet, but Prime Day deals are. Or, at least a peak of what the deals are going to look like. One of the most exciting of these deals gives you a refurbished Amazon Fire Max 11 tablet for just $130, which is down $70 from the usual $200 and a full $100 less than the retail price of a completely new one. You can even save 20% more with an applicable trade-in. There's no doubt that this is one of the best tablet deals going on at the moment, so tap the button below to lock it in. Or, keep reading to see why you'll like this tablet, take a peek at what our time with it was like, and what it means for something to be refurbished to the 'Like-New' level at Amazon.

Buy Now

Read more
This watchOS 26 feature has me excited for the Apple Watch again
A person wearing the aluminum Apple Watch Series 10.

Ahead of Apple’s long-awaited WWDC keynote earlier this month, the company was widely reported to be working on a new AI-powered doctor that could potentially help you diagnose common conditions, recognize potential illnesses, and understand your overall health. 

The rumored Apple AI doctor had me excited for WWDC, but as we saw, Apple held off on announcing this feature, presumably for a later date. However, WWDC 2025 did introduce a new feature to WatchOS 26 that isn’t a doctor, but rather a friend in the gym who keeps you motivated. 

Read more