Is Microsoft STABBING Nokia in the Back?

Microsoft (NASDAQ:MSFT) has had a good last few days as it tries to launch its latest efforts in the mobile market, but it may be leaving its hard-times partner in a lurch in the process. The flagship phone of Nokia (NYSE:NOK), which partnered with Microsoft late last year in an attempt to take on the domination of Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) in the smartphone market, will not be upgradeable to the latter’s Windows Phone 8 operating system when it launches in the fall.

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Nokia, once the world mobile phone leader, had bet heavily on the partnership, even dropping its own software, Symbian, in favor of Windows Phone for its Lumia 900 device. This decision by Microsoft is a new blow to the Finnish company, which announced last week that it was planning to cut almost 10,000 jobs by the end of 2013 in an effort to cut costs and turn the company around. Just last week, Nokia saw its credit downgraded to junk by Moody’s Investors Service.

Now sales of the Lumia devices, which have not been as successful as Nokia expected until now, are likely to drop further as customers wait for next-generation devices.

“Operators and users will hold on until the new devices are in the market this coming autumn,” Malik Saadi, an industry analyst at Informa Telecoms & Media, told Wall Street Journal. “This will have a serious impact on Nokia’s financial performance this quarter as the company relies strongly on Windows Phones as the main platform for its smartphones.”

While Microsoft will offer an update to existing Windows Phones users in the form of Windows Phone 7.8, the upgrades will be mostly cosmetic and will not include the increased functionality of the latest software. In contrast, Apple’s iPhone 3GS, first released in 2009, will be able to run iOS 6 when the company launches its operating system update this fall. Though some of the advances features of iOS 6 may not be available to users of older models because of hardware incompatibility, most will be.

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