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In an effort to compete in the mobile space, Microsoft teamed up with Nokia last year. In a deal reportedly worth billions of dollars, Nokia agreed to "adopt Windows Phone as its principal smartphone strategy" and "help drive the future of Windows Phone."
From Microsoft's perspective, the arrangement was ideal. Without such a partnership, the software giant likely would have had to make an acquisition a la Google.
So is Microsoft's strategy working?
According to research firm Strategy Analytics, Nokia became the leading vendor of Windows Phone in Q4 2011. That might not be entirely unexpected given the partnership between Nokia and Microsoft, but as BGR's Zach Epstein notes, "Nokia was late to the game with regard to Windows Phone" and only released its first two Windows Phone smartphones in October.
As such, the fact that Nokia is already the leading Windows Phone vendor is almost certainly welcome news in Redmond, which reportedly guaranteed billions in payments under its deal with Nokia. Even better news: the market for Windows Phone is growing. According to Strategy Analytics, 2.7m Windows Phones were shipped last quarter, a sequential increase of 36%. Yes, that still pales in comparison with sales of the iPhone and Android smartphones, but Strategy Analytics' Alex Spektor says there are "tentative signs of growth."
With new phones like the Lumia, which was very well-received at CES, Microsoft and Nokia will certainly look to keep the momentum growing.
But to truly succeed in mobile, it's worth remembering that Microsoft is a software company. To that end, it is pushing its relationship with Nokia beyond the Windows Phone market.
Today, Nokia announced that Microsoft productivity apps, which include OneNote, Document Connection, Lync 2010 Mobile and PowerPoint, are now available on Nokia Belle-enabled smartphones. Additionally, Nokia revealed that in the near future, "for the first time ever, Microsoft Word, Excel and PowerPoint will be made available as native applications in a smartphone, outside Microsoft's own platforms."
Needless to say, for Microsoft to succeed in the mobile space, Microsoft and Nokia will need to substantially grow the number of Windows Phone smartphones being shipped. But software outside of the OS matters too, and the availability of Microsoft's marquee productivity apps outside of the Windows Phone universe could prove to be an important milestone in the evolution of the company's mobile strategy.