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Nokia Says Google-Motorola Deal Helps Windows Phone

Microsoft's partner believes device makers like HTC and Samsung may ditch Android over favoritism concerns.
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Nokia said that Google's planned acquisition of Motorola Mobility could be "a massive catalyst" for Microsoft's Windows Phone 7 platform, which the Finnish company plans to use exclusively in its U.S. product lineup going forward.

"This further reinforces our belief that opportunities for the growth of Nokia's smartphone business will be the greatest with Windows Phone," Nokia said in a statement.

The company was reacting to Google's announcement Monday that it reached a deal to acquire Motorola Mobility, which makes smartphone handsets, tablets, and TV set-top boxes, for $12.5 billion in cash. The acquisition would give Google the ability to produce complete mobile systems that, as CEO Larry Page said in a blog post, yield "amazing user experiences that supercharge the entire Android ecosystem."

Page also said Motorola's rich patent portfolio would help it fend off lawsuits from rivals Apple and Google--a fact some analysts believe is the main motivation behind the deal.

But Nokia said the move could drive handset makers that currently emphasize Android phones into the Windows Phone camp. Google said it plans to maintain Android's status as an open platform, but some phone makers may conclude that Motorola will get first crack at Google's best technology. Two such vendors, Samsung and HTC, already produce Windows Phone devices, but the bulk of their sales are driven by Android.

More handset makers squarely focused on Windows Phone 7 would, of course, mean more competition for Nokia, but it could also give the platform, which Comscore says currently holds a U.S. market share of less than 5.8%, some desperately needed momentum. "This could prove to be a massive catalyst for the Windows Phone ecosystem," Nokia said.

Nokia also implied that it's willing to put its portfolio of wireless communications patents up against Motorola's on behalf of its partner in Redmond. "With our respective intellectual property portfolios, Nokia and Microsoft are working together to build and nurture an innovative ecosystem that benefits consumers, operators, developers, and other device manufacturers," the company said.

Some analysts feel that a Google-Motorola tie-up would push Microsoft to buy Nokia outright. "We believe the acquisition of Motorola by Google may increase the pressure on Microsoft to acquire a hardware vendor rather than just partnering with Nokia," said Susquehanna Financial's Jeffrey Fidacara, in a note to clients. Ticonderoga Securities analyst Brian White, meanwhile, said both Nokia and RIM may now be in play as a result of Google's move.

Nokia shares were up half a percent in morning trading Tuesday, after gaining 5.5% Monday. RIM's shares were down 2.58%, after posting a 4.9% gain Monday.

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