Analysts expect 700 million smartphones to be sold worldwide this year. While network operators and retailers may welcome a third software system to challenge the dominance of Apple's iOS and Google's Android, it is the consumer who will ultimately decide Nokia's and Windows Phone 8's fate.
Beside the smartphone challenge, Nokia is feeling the pinch in the lower end with manufacturers in China and in Asia producing cut-rate non-smartphones - Nokia's former domain. Earlier this year, Samsung overtook it as the world's No. 1 mobile phone vendor, ending Nokia's reign that peaked in 2008 with a 40 percent market share.
"Dumb" phones continue to be the backbone of Nokia operations, including in India where it's a top seller. With strong and extensive distribution networks and a brand well-known in emerging markets, all might not be lost for the company that grew from making paper and rubber boots to being the biggest manufacturer of cellphones.
Mawston says that in theory, Nokia and Microsoft have a good chance of success as they offer an across-the-board system that stretches across home computers, mobiles, laptops, tablets as well as in the office, backed by Nokia's strong distribution and hardware and Microsoft's multi-platform software.
"If they can exploit that underlying market platform and tie it all together in a good hardware portfolio, then potentially Microsoft and Nokia could be a very, very strong partnership a bit like bringing together Batman and Robin," Mawston said. "But, in practice, whether they can execute on that reality still is a great unknown and remains to be seen."
