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Neither Microsoft nor Nokia has done particularly well in the face of the new competition. Windows Mobile has lost market share this year and Nokia recently reported declining earnings, with an expectation for its market share to remain the same as last year. The deal could give both Microsoft and Nokia more leverage against the competition. It will also give end-users more choice of phones running Microsoft programs, but might present challenges to third-party companies already offering access to those programs. End-users, particularly business users who want access to Office products, will have more choice of phones once Nokia phones start appearing with the Microsoft software. Currently, Windows Mobile devices are the only phones with Office software, although third parties supply Office viewing and editing products for most phone platforms. That means the deal may help Nokia attract business users, despite largely unsuccessful attempts to do so in the past. Nokia bought and then discontinued an enterprise push e-mail offering from Intellisync. It has also launched a business channel program aimed at helping resellers and operators better target enterprises and introduced families of phones aimed squarely at business users, including some that look very much like the BlackBerry. But those efforts have failed to pay off. Nokia may have decided that it should focus on the larger consumer market and partner with other companies to pursue business users, Weldon said. When it halted Intellisync’s development, Nokia said it would partner with companies like Cisco Systems, Microsoft and IBM to deliver e-mail and business products. For Microsoft, the deal might be more about shoring up its Office and Exchange products, which bring in a significant portion of its revenue, than about improving the fortunes of Windows Mobile. “Microsoft knows it must protect these revenues by expanding the operation and connectivity of its key products, that until recently were primarily enabled on Windows Mobile and less functional or not available on competing platforms,” Gold said.

link: New mobile competition drove Nokia, Microsoft deal | Topics | iPhone Central | Macworld