Analyst urges Nokia-Microsoft Windows Phone 7 partnership

Major announcement expected from Nokia at Mobile World Congress

A senior analyst at Berenberg Bank has urged the chief executives of Microsoft and Nokia to form a partnership around Windows Phone 7.

Adnaan Ahmad said in an open letter to Steve Ballmer and Stephen Elop published in The Financial Times that the two companies are being outpaced by a computing revolution.

Nokia in particular needs to drop its resistance to opening its platform and slim down its operations, according to Ahmad.

"You both must remember how a whole host of mainframe makers lost out in the shift to PCs and client servers, such as Wang, Unisys, IBM and Burroughs," he wrote.

"And Steve, you and Bill [Gates] must remember how you ate IBM's lunch. That's brought a smile to your face, Steve, hasn't it? Well, this 'convergence' thing is as seismic a shift and may take that smile off."

Ahmad said that Nokia should dump MeeGo, which he described as an industry joke, and focus on the Windows Phone 7 platform. This would give Nokia an entry into the US market where it is weak, and give Microsoft a name carrier to promote the new system.

Chris Jones, founder of analyst house Canalys, told V3.co.uk that the US is Nokia's "problem child" and it needs to do something about the situation.

"We think Elop is going to talk at Mobile World Congress, and the signs are that something quite drastic will be announced," he said.

A Windows Phone 7 tie-up would make considerable sense for both companies, according to Jones, who pointed out that Elop successfully brokered a research deal between the pair when he was at Microsoft.

HTC, Samsung and LG are doing well on the Android platform, and there could be a big opportunity for Nokia to become the prime Microsoft handset vendor which could open doors in terms of enterprise smartphone sales, he said.