LONDON/SEATTLE, Feb 11 (Reuters) – Nokia’s (NOK1V.HE) last-ditch attempt to catch up with Google and Apple by teaming up with Microsoft Corp (MSFT.O) puts them back on the smartphone map, but gives rivals plenty of time to try and widen their lead.
Shares of the world’s largest cellphone maker plunged 14 percent on fears the decision by new chief executive Stephen Elop to throw in the towel and use Microsoft’s Windows Phone software will hammer margins and weaken its position during a tumultuous transition.
The deal marks a potential breakthrough for Microsoft, which has flailed in mobile for years but should now get its software into upward of 30 million smartphones sold by Nokia every quarter.
But its shares slid almost 1 percent as investors weighed the merits of teaming up with a weakened player, and feared that Nokia’s rivals would gobble up market share in the months to even years it will take to get their phone to markets. [ID:nN1180194]
The decision by Elop, a Microsoft veteran drafted in September to turn around the flagging Finnish phonemaker, sparked a lively Twitter exchange.
“Two turkeys do not make an Eagle,” Google’s vice president of engineering, Vic Gundotra, tweeted this week.
Elop struck back on Friday, invoking the Wright Brothers: “Two bicycle makers, from Dayton Ohio, one day decided to fly.”
The race is now on for the software and hardware giants to prove their new phones can fly.
