Cutting Room: Has Microsoft lost faith in Nokia?

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With no compatibility between current Lumia phones and Windows Mobile 8, Chris Donkin says there is a chance Nokia will not be able to recover unless its next range stays ahead of its rival’s version of the Windows handsets

With the vultures already circling around ailing handset maker Nokia, there was a brief hint of optimism in the air from analysts as Microsoft last week revealed its all-singing, all-dancing Windows Phone 8 (WP8). Surely the shot in the arm the struggling Lumia range needed – right? Wrong.

While statements from HTC, Huawei and Samsung  hit the Mobile News inbox welcoming the new operating system, things were very quiet from Nokia HQ, and it’s easy to see why – with no compatibility between any of the Lumia phones currently available and Windows Mobile 8, the Lumia is already starting to look like an outdated handset.

It’s hardly going to help sales among the increasingly tech-savvy public who buy top-of-the-range devices to know they won’t be able to use the latest software on it – especially when other manufacturers are standing by to launch their Windows handsets by Christmas.

I’m sure Lumia owners also weren’t particularly heartened by the statement from the software company that Microsoft are launching an upgrade for Windows 7.5 users – Windows 7.8, which has a starting screen which looks just like Windows Phone 8. Only without any of the features of the new system.

Nokia bosses must be livid. And if they’re not, they probably should be. If the two companies are as closely linked as they suggest, why wasn’t the Lumia fitted with the hardware it was going to need when the new Windows operating system was released?

Perhaps if Microsoft really wanted to help out its nearest and dearest, it should have given it a heads up on this – or even handed it an exclusive deal on WP8 for a few months. As it turns out, the first wave of the new OS will be available across four manufacturers including the new reigning monarch of handsets, Samsung.

As Mobile News went to press, news was already filtering through the internet that Nokia CEO Stephen Elop was receiving letters from angry Lumia 900 owners.

While Windows Phone 8 phones will be available by the end of the year, if someone bought a Lumia 900 on the day of UK release on a 24-month contract, they won’t get their hands on the new system until May 2013. That’s if they bother to buy another Nokia at all.

Then, to top it off, one of Nokia’s exclusive Lumia apps, Nokia Maps, is going to be built into Windows Phone 8, making it available to other manufacturers. It’s likely to be a valuable royalty stream which the ailing firm can ill-afford to turn down, but it means the Lumia loses yet another USP.

Probably the last thing Nokia needs – after announcing 10,000 redundancies (40,000 in just two years), another profit warning and hacking chunks out of its research and development arm – is for its closest ally Microsoft to stab it in the back. Yet that’s what appears to have happened.

With the new Windows software in place, Nokia will have to use its ‘close relationship’ to get the most out of the new OS to ensure the next series of Lumias will blow the market away and, crucially, be a step ahead of its rival’s version of the Windows phones.

One analyst we spoke to before the announcement said “Microsoft was holding Nokia back” at the high end, by not supporting multiple-cores and limiting the screen resolution the Finnish manufacturer could use.

That “holding back” now seems to be a full-on drag to the ground, and with market analysts relegating Nokia shares to ‘junk status’ there’s a chance the ailing manufacturer won’t be able to get back up.

Let’s hope that’s not the case.

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