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Nokia teams up with Microsoft

A picture taken on October 21, 2010, shows Finland's mobile phone maker Nokia's N8 smartphone at Nokia flagship store in Helsinki.

TEXT OF STORY

Kai Ryssdal: Earlier this week, the new CEO of Nokia, the world's biggest mobile phone maker, was caught in a compromising position. Somebody leaked an internal memo in which he compared his company to a man standing on a burning oil platform facing two choices: Jump off into the freezing cold water, or, you can guess the other choice.

So today Nokia jumped. The company's going to ditch its own smartphone platform and use Microsoft's mobile phone operating system instead. Yes, it's a tag team approach to help Microsoft and Nokia take on Android from Google and the iPhone from that other company.

But as Marketplace's Steve Henn reports, not all the smart money is on smartphones.


Steve Henn: iPhone versus Android. Blackberry versus everyone. It seems like all these companies want to do is steal each other's customers. But the biggest prize by far is convincing of those of us who don't own a smartphone to buy one.

Michael Gartenberg: We are talking about a market that is moving at tremendous velocity and a tremendous rate of change and pace.

Michael Gartenberg's a mobile analyst at Gartner Research. He says a year ago, half of all the smartphone owners in the U.S. didn't have one. And today, three out of every four mobile phone customers in America still don't.

Charlie Golvin is at Forrester Research. He says these are the people Microsoft and Nokia hope to reach.

Charles Golvin: It's a very significant win for Microsoft. They are gaining the endorsement of the largest manufacturer of mobile phones around the world and they are gaining the commitment to their smartphone platform.

Windows Phone is Microsoft's latest attempt to break into this business. It has a tiny share of the market. Golvin says the two companies will have move fast to catch up. But Nokia isn't forgetting about the rest of the world. It's still:

Golvin: Very clearly focused on the low-end of the market and, as they put it, connecting the next billion Internet users, which will not be through smartphones, that will continue to be through low-end phones.

This year, mobile phones will become the most common way in the world to access the web, while Nokia, which once owned this market, fights to keep its head above water.

In Silicon Valley, I'm Steve Henn for Marketplace.

About the author

Steve Henn was Marketplace’s technology and innovation reporter for the entire portfolio of Marketplace programs until December 2011.

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