What happens when two heavyweights, once at the top of their respective game joins forces? That’s exactly what we’re about to find out. Computer giants Microsoft and cellphone pioneers Nokia – have over the last few months joined forces in the multi-billion dollar mobile phone and mobile OS war.

On Monday March 26, Microsoft and Nokia made a major announcement further strengthening their partnership. To drive innovation and business opportunities, Microsoft and Nokia will each invest up to 9 million euros into a newly established mobile application development program at Aalto University during the next three years. The AppCampus program has been set up to foster the creation of innovative mobile applications for the Windows Phone ecosystem and Nokia platforms to create a new generation of self-sustaining mobile startups. Starting in May 2012, the Finland-based program will be led and managed by Aalto University which has a growing reputation as a hotbed of new startup companies. AppCampus is intended to attract thousands of application proposals from students and entrepreneurs from all over the world.

Within the AppCampus program, mobile entrepreneurs can benefit from comprehensive support, training in mobile technology, design and usability, and funding to create innovative new mobile apps and services.  Mentored by veterans in the mobile industry, program participants will be given insights and business coaching to help them commercialize their ideas while retaining the full intellectual property rights for their innovations.  “We are proud to announce this new program, which will enable new and existing developers to create next-generation mobile apps and unique user experiences,” said Kai Öistämö, executive vice president, Nokia Corp. “The partnership will allow developers to ideate and monetize business opportunities globally, via both Windows Phone Marketplace and Nokia Store.”

The move underscores the seriousness with which the two companies have taken the threat to their respective empires by common foes. If mutual enemies make fast friends, then Nokia and Microsoft have quickly become the best of friends. The number of apps available in the Windows Phone Marketplace now exceeds 65,000, surpassing those at another rival Research in Motion’s BlackBerry store. But that is still far short of around half a million apps available on the Apple App Store and Google’s Android.

In Apple and Google’s Android based devices, both Microsoft and Nokia have seen their market shared decline and their respective places taken as king of the hill, by the shiny new toys on the block.

The flagship Nokia Lumia 900 Windows Phone 7 device is arriving on AT&T for an attractive-sounding $99, placing the high-end phone below the iPhone’s price and among cheaper and less-capable Android phones on the market.
The partnership has also taken wings in the most populous country in the world. Nokia’s Windows Phone 7.5 device, the Lumia 610, will ship to China in the second quarter of 2012 and cost less the $180 (US). The iPhone 4S costs five times that amount in China. Analysts expect Windows Phone sales in China to exceed those of the iPhone by 2016. Microsoft China held an event in Beijing for press and phone industry executives on March 21, 2012 to announce its new offerings and show off the Chinese-language interface.

Reception to the Window Mobile offering has been lukewarm to this point. This is mainly due to the unwillingness of app developers to jump onboard the platform at this stage. Reviews have however been far more impressive. Microsoft launched its latest Windows Phone 7.5 operating system last year to good reviews while Nokia’s Lumia phones look sleek and stylish, with live, tiled icons that automatically update news, weather, pictures and social feeds.

Both companies are hoping that this partnership, with its shared OS/hardware alliance, its AppCampus venture, and entrance into lucrative overseas markets will be just the jolt of energy both companies need to restore them to their former lustre in the mobile industry.

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