Nokia CEO quashes talk of sale to Microsoft

Despite a sweeping deal with Microsoft on Windows Phone, Elop dispels rumors that a Nokia buyout is imminent

BARCELONA -- Microsoft won't be buying Nokia anytime soon despite a sweeping Windows Phone agreement announced by the vendors last week, Nokia CEO Stephen Elop told reporters Sunday.

"There was no discussion of acquisition" during negotiations of a pact that will have Nokia phones running Windows Phone 7, Elop said at a crowded press conference on the eve of the Mobile World Congress here.

"The best approach for Nokia was to enter into a deep partnership, but to respect that there's a huge chunk of Nokia that's not in [Microsoft's interest]," he added.

Several analysts have suggested that the Nokia-Windows Phone partnership could lead to Microsoft buying the Finnish company. Analysts said that despite the high cost of such an acquisition, the fact that mobile devices such as smartphones and laptops will play a central role in the emerging computing and communications landscape could make it successful.

Also, analysts noted Microsoft would capture Nokia's distribution and manufacturing capabilities, providing a huge boost to its efforts to increase its small share of the smartphone market.

Elop acknowledged he had heard the speculation that the cell phone maker might be an acquisition target.

Gartner said Microsoft had 3.4% share of the smartphone market in the fourth quarter of 2010, putting it in fifth place.

Symbian-based devices made by Nokia and others led the smartphone market with a share of 32.6%, Gartner said. Nokia's own devices had a 28.5% share of the smartphone market in the quarter, Elop said on Sunday.

While Elop didn't rule out a future purchase of Nokia by Microsoft, he said the focus of the partnership now is the "next billion" Windows Phone-based devices that will be produced by Nokia. "The opportunity for shared value was first priority," he said.

Elop also defended the plan to use Windows Phone on Nokia hardware at a time when few others, such as Samsung, HTC and LG, have committed to Microsoft. He suggested other device manufacturers will move in that direction and say, "We'll compete in the Windows Phone ecosystem."

He added that the first priority is to compete with Android devices. "We have shifted from a battle of devices to a war of ecosystems," he said.

Elop also introduced Jo Harlow, who was promoted last week to executive vice president of smart devices at Nokia. She previously held a chief marketing post.

Harlow said a Nokia device running Windows Phone will be available sometime this year, and she presented two slides of concept Nokia devices, including one slide that has already been widely seen on blogs.

"It's an exciting contemporary and modern platform," Harlow told reporters. "We are the partner that will bring innovative design and hardware to make great mobile products with Windows Phone."

She said teams from Microsoft and Nokia are already working together in Iceland on the first Windows Phone product.

Elop also sought to lessen fears of developers writing applications for Nokia's Symbian and Meego operating systems.

"You'll see volumes of Symbian devices in coming months and years ... which gives us the ability to carefully manage the transition of Symbian and Windows phones," Elop said. Nokia's plans for Symbian devices will provide "a huge opportunity for developers," he added.

Elop said that Meego devices will ship this year to take advantage of Qt, a cross-platform developer framework. But he added that Nokia has no plans to put Qt on Windows Phone. "It would confuse developers and consumers," he said.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed . His e-mail address is mhamblen@computerworld.com.

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