NOKIA chief executive Stephen Elop defended his firm’s partnership with Microsoft yesterday after the deal sent its shares tumbling a further five per cent.
Shares in the Finnish firm have now lost a staggering 19 per cent since the deal was announced on Friday, knocking €6bn (£5bn) off its market value.
Elop said Nokia will receive “billions” in benefits from the tie-up, largely expected to be through discounted licenses to Microsoft software. Elop, who until recently worked for Microsoft, also denied suggestions he is a “Trojan horse” sent to further the US-based firm’s interests.
Analysts downgraded Nokia stock yesterday, saying it will be difficult for the firm to integrate Microsoft’s Windows Phone 7 (WP7) onto its handsets in time to reach the Christmas market.
They also warned the deal could lead to a temporary revenue vacuum, with customers unlikely to invest in Nokia’s existing Symbian platform now Elop has effectively called time on it.
Speaking last night at Mobile World Congress in Barcelona, Elop said the partnership between the two giants is “rational” and will deliver an “incredible portfolio of devices”.
Microsoft chief executive Steve Ballmer said the deal represents a “significant moment in the evolution” of mobile phones.
The two firms hope the deal will create a third “ecosystem” in the smartphone arena that can compete with Google’s fast-growing Android platform and Apple’s iOS.
Nokia was the biggest global manufacturer of both traditional and smartphones last year and its Symbian operating system was the most commonly used platform. But it saw its market share slip 7.5 per cent and Google’s Android overtook it in the fourth quarter of last year, with the Scandinavian giant struggling to find a foothold in the increasingly dominant high-end market.
UBS analyst Gareth Jenkins expects the firm to lose another seven per cent from its market share this year and said a Nokia/Microsoft platform is worth 1,800 times less than Apple’s operating system.
Ballmer also defended WP7, which has been slow to chip away at the growing dominance of Google and Apple in the high-end smartphone market.
He said 93 per cent of people were “delighted” with the platform. He went on to unveil plans to include deeper integration with services such as Facebook and Twitter.
NEW PRODUCT LAUNCHES
The smallest smartphone on show at MWC was the HP Veer. In fact, measuring in at smaller than a credit card and thinner than a deck of cards, it is among the smallest smartphones ever constructed. It features access to all major social network feeds and has a slide-out qwerty keyboard. The question is: how small is too small? And the answer: probably this.
LG OPTIMUS 3D
The Optimus has a glasses-free 4.3” 3D LCD screen and dual 5 mega-pixel camera for recording 3D video. Using Google’s Android operating system, the device features 8GB memory, advanced multimedia capabilities and HDMI output. The technology is impressive but it remains to be seen whether people will pay extra to make calls in the third dimension.
SONY ERICSSON XPERIA PLAYSTATION PHONE
The PlayStation phone was finally unveiled at MWC, with the firm promising at least 50 games will be ready in time for its launch in March. The Android-powered phone has a touch screen, a 5 Megapixel camera and expandable memory of up to 32GB. Sony’s fight back against the all-conquering Nintendo DS has begun.