Business

Is the Nokia/Microsoft horse a stallion or a tired nag?

BBC business editor Robert Peston on a new partnership in mobile

"It's now a three-horse race" said Nokia this morning, of its proposed "broad strategic partnership" with Microsoft "to build a new global ecosystem".

If Nokia and Microsoft are going to continue to use phrases like "global ecosystem", some may argue that they may not win that race - since it's not clear that their millions of customers would have the faintest idea what they're talking about.

What they are actually doing is pooling technology and assets to make a meaningful impact on the smartphone market.

Nokia will deliver mapping, imaging and operator billing agreements to the partnership; Microsoft delivers the Windows Phone platform, the Bing search engine, and the adCentre search advertising services. They'll work together on marketing.

It is a merger in the fastest growing part of the consumer IT market, the part more-or-less defined by Apple with its iPhones and iPads - and where Google is now capturing the largest market share with its Android platform.

Hence Nokia's claim that the contest now has a troika of players - though RIM with its Blackberry would say it is still fighting.

I simply don't have the expertise to know whether the adoption of Microsoft's Windows Phone as its main "smartphone strategy" can deliver devices with the elegance and efficiency of rivals' products - and at the right price. My colleague Rory Cellan-Jones is better placed to discuss all that.

What I can say is that it is incredibly difficult to create a single enterprise with ruthless purpose when two giant businesses, with strong, proud respective cultures, decide to collaborate as equals.

Typically if ground has to be made up fast in a competition, it helps to know who is actually in charge, who is holding the reins.

I am trying to remember a successful precedent of collaboration on this scale - involving businesses from different continents and with pretty different products and services - that worked, absent a formal takeover of one company by another, or a full-scale merger that created a unitary board and hierarchy.

Maybe it is a failure of memory or imagination, but I can't think of any encouraging precedent. Which of course doesn't mean that the deal will fail - just that globalisation and technological change has thrown up a new kind of deal, whose results are uncertain.

There is something rather awe-inspiring about the idea of two great beasts from different species trying to work together and have babies. If they succeed in procreating, and that's by no means certain, will the hybrid progeny be a stallion or some kind of hobbled, galumphing nag?

You can keep up with the latest from business editor Robert Peston by visiting his blog on the BBC News website.

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