Seems like the entire universe laughed when Microsoft and Nokia announced a partnership to create smartphones to compete with the Apple iPhone and the various Google Android devices. How could two turkeys make an eagle, anyways? Our CEO Howard Lindzon talks all the time about how the social web is still in its infancy, and how difficult it is to gauge if any of the players have solid positions going into the future. Why then is mobile set in stone, after only a few years of Apple dominance (and less than 18 months of remotely interesting Android phones)... So its with that in mind that I talk about two of the most interesting firms in this whole mix, Nokia and Microsoft. Both have been stockpiling cash ($MSFT has $56Bn in current assets, or roughly $37Bn in cash and marketable securities, while $NOK has $34Bn in current assets, or roughly $13Bn in cash and marketable securities), and both have held lead positions in smartphones in the last few years. Additionally, both have a massive chip on their shoulders, as they've lost their lead to Apple and Google... However, this is easily remedied.

It begins with Windows Phone 7, which many reviews are calling good or even polished, particularly relative to Android. Microsoft has the capability to grow that universe by enticing the developer community and manufacturers with cash and customization. Nokia on the other hand had a major void in OS, as their attempts to compete with Android and iOS were ill-thought out. With the exception of Blackberry or WebOS, which wouldn't have been strategically appropriate for Nokia, there really were only two choices, namely Android (dominated by HTC, Samsung and Motorola at this point, with plenty of 2nd tier manufacturers also pushing new models all the time) and Windows Phone, which seems to still be a greenfield. Whereas in the Android universe, Nokia would look and feel like a has-been behind the 8-ball, on Windows Phone, Nokia can still be a pioneer... Coupled with support that $MSFT offered for $NOK apps that might be displaced by standard Google apps, the move seems like a no-brainer...

Which brings the big question from the skeptic community - How will $MSFT compete if the developers are living on iOS and Android. Where's the incentive? If they want a business community, the developers can also target Blackberry, or god-forbid WebOS, so how does Windows Phone 7 stay relevant? Great question, and even greater answer. $MSFT has made a conscious effort to intertwine development for PC applications with mobile applications - this was their underlying architecture since the old Windows CE devices (remember the beloved Compaq iPAQ). This allows for one underlying architecture for PC and mobile/web apps, which surprisingly fits dev cycles at many potential partners. The addition of Nokia, still the largest manufacturer and firm with the largest footprint across the globe, $MSFT by default stays relevant. Win-win that likely closes the gap for business apps, at the very least...

The challenge is convincing users to try the devices, with all the other Operation Systems out there. $MSFT should be able to sell those PC and Exchange synegies to the business community, but it might be tougher than any other $MSFT corporate sale since the early 80's. With $NOK by its side though, $MSFT will probably take some market share from Blackberry and others. Underestimating $MSFT and $NOK at this point in time seems premature, particularly when thinking about the green-field that is smartphone sales...

This world just got more interesting and $MSFT / $NOK look like they're here to stay (and play)...