Nokia Microsoft to tango with Windows Phone 7 alliance?

Are Nokia and Microsoft getting ready to tango with a Windows Phone 7 alliance? That possibility has been on the cards, according to the buzz, before a German bank analyst, in a 31 January letter, encouraged the companies to port Microsoft's mobile software onto Nokia smartphones.

In a letter addressed to CEOs of both companies, Adnaan Ahmad said: "You get access to their WP7 intellectual property (IPR) scot-free and access to the US market where your share has dived to the low single-digit level, and in doing so cut your bloated handset business R&D budget."

The letter came after Nokia CEO Stephen Elop's 27 January earnings-call statement that Nokia "must build, catalyse or join a competitive ecosystem."

Nokia is hosting an event on 11 February to reveal its strategy. "We are very clearly ensuring that it will give us the opportunity to reopen markets such as the US and some others," Elop added, "where we have not recently been present."

Microsoft and Nokia already have a software partnership going from August 2009, when the two companies announced that mobile versions of Microsoft Office would come preloaded on Nokia smartphones. Nokia also started working on optimising Microsoft Exchange ActiveSync for its devices at the time, to allow for more streamlined access to e-mail and personal information.

Even as Microsoft and Nokia continued to work together on that front, at the same time continuing to compete via their respective smartphone platforms, a changeover in the companies' executive suites threatened to spin the relationship in unexpected ways.