Microsoft And Nokia Face Mobile Future Together

Windows 8 is officially coming on October 26th, and the success or failure of the operating system as a mobile entrant is tied to Finnish mobile phone manufacturer Nokia. As Nokia goes, so goes Windows 8 – and vise versa – as the two companies have joined forces in putting all of their smartphone hopes into the next-generation Windows OS.

After their recent earnings report, much was made of Microsoft’s contribution to Nokia’s balance sheet – the software giant reportedly paid Nokia $750 million for its Windows Phone participation. The investment underscores how the growth in Windows Phone usage worldwide is tied to Nokia – while Samsung and HTC pay only cursory attention to Windows Phone, concentrating instead on the more developed Android market, Nokia has put all of its smartphone hopes and investment into Microsoft’s mobile offering.

The result is a pairing that is beneficial to both Microsoft and Nokia – overall Windows Phone handsets seen by apps running Localytics have grown by 312% in the first half of 2012, and Nokia has cemented itself as the world’s Windows Phone manufacturer, accounting for 59% of all global Windows Phone devices seen in July.

Nokia and the United States
A challenge facing Nokia in this process, though, is the Finnish company’s foothold in the United States. While the electronics maker remains a powerful brand in the international market, its slow response to the rise of Apple’s iPhone and devices powered by Google’s Android operating system left Nokia struggling, forgotten and outdated.

However, since the introduction of their flagship Lumia family of devices, Nokia has quickly taken large chunks of the US Windows Phone market: between January 1st and July 31st, 2012, Nokia went from zero percent to nearly a third of all Windows Phone-powered devices in use in the United States.

The quick growth of Nokia’s handsets has contributed to a 273% increase in active Windows Phone handsets in the United States.

Nokia’s Lumia family of phones was released outside of the United States starting in November, 2011, while Americans were forced to wait until the following January. Looking at the US and global Nokia growth rates with that in mind, it appears that Nokia is primed to continue pursuing their goal of rapid US growth – aka Operation Rolling Thunder – in the second half of 2012. The value of the high-end smartphone market, combined with Nokia’s recent struggles maintaining their grip on emerging markets, underscore just how important the success of Windows 8 as a mobile OS is to the company’s future.

Microsoft, meanwhile, must have high hopes for the partnership, and while Android and iOS continue to dominate smartphone platforms, Nokia’s successes and the resulting growth in Windows Phone usage should be somewhat reassuring. Rather than relying on partners like Samsung, who is heavily invested in expanding Android’s dominance, Microsoft has in Nokia a partner with as much riding on mobile Windows success as the Redmond-based software giant.

Next Step: Windows 8
The next big thing for Windows in your pocket is the upcoming Windows 8, and Nokia is reportedly introducing their first Windows 8-powered device at a press conference September 5th. Both companies’ smartphone hopes ride on Microsoft’s new operating system, aimed at further blurring the line between computer and mobile handset. By combining the design of handsets referred to as Windows Phone saviors with a new OS designed to power tablets, mobile phones and desktops, Nokia and Microsoft are betting on each other.

Methodology:
Localytics provides app analytics for Windows Phone, iOS, Android, Blackberry, HTML5 and now Windows 8 apps on over 350 million devices. For this study, Localytics analyzed app usage on unique handsets running Windows Phone in the United States and globally between January 1st, 2012, and July 31st, 2012.