Microsoft, Nokia deal bad for Windows Mobile

The Microsoft-Nokia plan to put Office applications on Nokia smartphones isn't a good sign for the Windows Mobile operating system, according to some analysts.

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Some think the agreement is an admission by Microsoft that Windows Mobile, its operating system for mobile devices, hasn't done well, especially when compared to the Symbian operating system that runs on Nokia handhelds.

Analysts won't come out and say that Windows Mobile is dying, but they came close in comments today.

The alliance announcement is "a tacit admission that Windows Mobile hasn't made the grade and not gotten the market share they wanted," said Nick Jones, a Gartner analyst. "If Windows Mobile were the leading mobile OS, they wouldn't have needed to do this."

Symbian is the world's leading mobile OS and runs on nearly half the smartphones globally, while Windows Mobile hasn't reached above fourth place globally despite strong support and years of investment from Microsoft, Jones added.

Jones said he is becoming "more concerned" about the future for Windows Mobile and added in a blog today that Windows Mobile 7 could be Microsoft's last update of the product. A release of Windows Mobile 6.5 is due later this year.

"Imagine you are Steve Ballmer and in two years time WinMo was still fourth in smartphone market share. How much longer would you keep throwing money at it?" Jones wrote.

Microsoft strongly defended Windows Mobile yesterday, with Microsoft Business Division President Stephen Elop saying in a teleconference with reporters that the alliance with Nokia doesn't mean Microsoft is conceding Symbian as the dominant OS for smartphones. However, Nokia executive vice president for devices Kai Oistamo also clearly said Windows Mobile won't be running on Nokia phones.

And in an interview afterward, Kirt Debique, general manager of the Microsoft Business Division, said Microsoft remains "deeply committed to Windows Mobile", adding that the alliance was not about the OS, but instead the productivity software running on smartphones.

Stephen Drake, an analyst at IDC, said the alliance won't have a negative effect on Windows Mobile. Instead, he said, it's a smart move for Microsoft, since the company hasn't been able to license Windows Mobile on Nokia smartphones, but will now be able to provide a number of its offerings on another platform without using Windows Mobile.

"It makes sense for Microsoft to port its solutions on other OSes, as it realizes it is a heterogeneous world," Drake said.

While Jones offered the biggest worries for Windows Mobile of several analysts interviewed, there were other voices of concern as well.

Jack Gold, an analyst at J. Gold Associates, said today's deal has him wondering whether Windows Mobile can survive much longer.

Gartner analyst Ken Dulaney noted that Windows Mobile is already "weak right now, whether this [Nokia alliance] got announced or not". While Microsoft seems committed to improving Windows Mobile, "they will never be as dominant as they have been on the PC".

And Carolina Milanesi, also a Gartner analyst, said the deal with Nokia won't mean that Microsoft stops improving Windows mobile, but expressed long-term worries. "To me, the deal shows that there are limitations to where the [Windows Mobile] platform will go in the next year or so, and that the Microsoft [productivity software team] might not want to risk waiting for Windows Mobile 7 to come to the rescue, " she wrote in an e-mail.

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