Nokia‘s new superphones will offer a superior user interface and a better, cloud-enabled experience than its chief competitors, the company’s top U.S executive told VentureBeat.

The reliance by Apple and Android phones on the “app” as the central metaphor is “outdated,” he said.

In a wide-ranging interview, Chris Weber, President of Nokia, head of North America, downplayed expectations that we’ll see a U.S. superphone release by Nokia this year.

Until now, many people had hoped to see Nokia’s first U.S. smartphones based on Windows Phone 7 as early as this year. But under questioning, Weber would confirm only that the phones would first hit the U.S. “in volume” in 2012. He said Nokia CEO Stephen Elop had committed only to releasing a Nokia Windows Phone device ”somewhere” this year, but would not say whether this would be in more than one market or whether or not the U.S. would be included.

Nokia is already bleeding market share, and it needs to get this release right. But if it Nokia misses another holiday season, it’s just another blow to a company that is taking forever to get its act together.

Why can’t Nokia be firmer in its commitment? Weber cited the complex set of relationships and agreements needed before launching a phone, including getting carriers on board. That in itself — Nokia’s willingness to court U.S. carriers and release subsidized phones exclusively through them — is an about-face in strategy that he is bringing to Nokia’s superphone restart.

Rebooting Nokia
Weber (pictured right, below) cited an effort to consolidate many of Nokia’s U.S. operations in Sunnyvale, a project he says resembles running a start-up. Since Weber joined Nokia in February, he’s already changed 80 percent of his leadership team, noting that he has “10 to 11 new direct reports” out of a total of 14. Weber had left Microsoft in December, after running enterprise sales for the software giant.

The interview came on the heels of Nokia’s confirmation earlier in the day that it is killing its Symbian operating system, and also that it won’t be releasing the company latest N9 phone in the U.S. The N9, a phone built on an operating system called Meego, was an experiment and won’t be replicated, Weber confirmed in the interview.

Nokia’s future phones will merge the latest Microsoft Windows Phone software based on the Mango update (which Weber said has had great reviews) with Nokia’s hardware, which he said boasts reliability and phone call quality. Weber cited state-of-the-art imaging technology and battery performance as areas Nokia phones would excel in. Weber also said Nokia may beat competitors on pricing, thanks to the company’s significant global reach, which gives it economies of scale.

Moreover, Weber said the company will launch its superphone portfolio with a focus on U.S. market, because he said winning in the U.S. market is what it takes to win globally. He also confirmed that Nokia will back the launch with the company’s largest marketing effort to date, though wouldn’t go into specifics.

Weber called Android and the iOS phone platforms “outdated.” While Apple’s iPhone, and its underlying iOS operating system, set the standard for a modern user interface with “pinch and zoom,” Weber conceded, it also forces people to download multiple applications which they then have to navigate between. There’s a lot of touching involved as you press icons or buttons to activate application features. Android essentially “commoditized” this approach, Weber said.

Interface overhaul
Nokia, by contrast, will offer a more seamless and efficient interface with its “live tiles and hubs” approach. It does this via Microsoft’s Windows Phone operating system, where applications will be integrated into everything you do. For example, if you want to communicate with a business contact, you select the contact from your address book, and then communicate in any way you want — via LinkedIn, Facebook or Twitter — without having to open those individual applications. That’s because everything is built around contacts, not applications. And your profile and most important contacts are represented by tiles on your home screen, which update dynamically as you or your contacts make status updates. On the iPhone and Android, by contrast, the home screen icons remain static.

Still, much of this “hubs and tiles” approach has been a feature of Microsoft’s Windows Phone OS since its launch about a year ago. It has yet to demonstrate significant traction, though it’s also early days still.

Now Nokia is clearly betting on Microsoft’s latest update to its OS, called Mango. It was just released to developers three weeks ago.

Here’s one killer feature afforded by Mango: Using it, Nokia phones will be able to use voice commands to complete tasks without ever touching the phone. Weber demoed this feature for me (but unfortunately, wouldn’t let me shoot video of it), but here’s how it worked: When I texted him, his phone received the text and then automatically read the message out to him. He then directed his phone — again, using only voice — to reply to me with a spoken message. It arrived on my phone promptly. He did all this without ever touching his phone. And he’s said he’s used the voice feature to conduct scores of phone conversations, too, answering and hanging up without ever touching the phone. That’s pretty cool, indeed.

In fact, we’ve previously referenced this technology. However, Weber said the feature is much better than Android or Apple equivalents, because with those competing phones you have to touch the phone each time you want to initiate their voice-to-text features.

It’s a certainly a good feature to showcase, but its also not a game-changer, that massive overhaul that could give Nokia a decisive lead.

It’s not clear exactly how Nokia plans to distinguish itself from the host of other manufacturers — HTC, Samsung and LG — who are also committed to building phones on Mango.

Weber kept stressing Nokia’s superior hardware. And Nokia will also benefit from its relative leadership in location-based services via its ecommerce and maps offerings, which it owns directly, and therefore can monetize more effectively.

Cloud support
And at least when it comes to beating Apple and Android, he pointed to the strategic partnership with Microsoft as a way to overtake them on the enterprise side, too.

“We’re way ahead of them [Apple and Google],” Weber said, referring to exploiting cloud technology to offer things like cross-platform services in the enterprise. This includes better phone integration of various mail systems, for example.

With help from Microsoft, Nokia is able to offer a mix of personal storage (25 GB of Skydrive storage comes on the phone he was demoing) and cloud services through things like Office 365, and private enterprise cloud offerings. Files can be stored from the phone using any these technologies, he said.

Weber’s honing a fine marketing message. But the jury is still out. Only when we get our hands on the new phone will we know if Nokia has turned the corner. It sure looks like Nokia can become a big player in mobile, but there’s no evidence it has anything to retake the lead with.

BANGALORE (Reuters) – Nokia Corp. will finally exit the Japanese cellphone market at the end of August, the Nikkei reported.

The Finnish handset manufacturer had stopped supplying cell phones to Japanese carriers in 2008, according to the report.

Nokia will shut high-end Vertu handset stores in Tokyo’s Shibuya and Ginza districts by the end of July, the report said.

The Vertu business has been struggling as the popularity of smartphones rose, the business daily reported.

Nokia’s phone service, run on network infrastructure leased from NTT DoCoMo Inc., will be discontinued when its contract expires at the end of August, the daily said. Nokia’s Tokyo office will stay open till the end of the year to handle fee refunds and other matters, the paper reported. Vertu handsets cost 600,000 yen ($7,450) to 20 million yen ($248,354) each, with some models decorated with precious metals or traditional Japanese lacquer designs, the Nikkei reported.

Nokia has been restructuring since its earnings deteriorated due to the rise of Apple Inc.’s iPhone and other smartphones.

Nokia’s biggest profit margin killing headaches appear to be Android, China and Europe and the company doesn’t have any answers.

Speaking on a conference call, Nokia CEO Stephen Elop said that the company was getting whacked in China due to “mismanagement” and high inventory levels. Simply put, Nokia can’t move phones in China. The story in Europe didn’t revolve around mismanagement as much as competition from Android. In either case, Nokia is taking some major body blows and can’t even provide an outlook for 2011.

Regarding China, Elop said:

As it relates to competitive challenges, it is the case that certain competitive forces, particularly Android, are really gaining momentum in certain regions. For example in China, there’s an indication of some very substantial movement in the growth of market share for Android, particularly in some technology areas where Nokia today with our current portfolio doesn’t compete.

A good example of this is the CDMA technology in China, where that technology has seen quite an increase in market share in China. And as you know, we don’t currently have CDMA products, but clearly, that’s something that we’d be considering in the future. So there’s some dynamics like that that we have to deal with.

And in Europe, Android was also routing Nokia. Elop noted:

In Europe, that’s not the case on the management perspective. It’s very much about competitive pressures. We’re seeing, for example, a large volume of Android devices really coming into the market. They’re largely undifferentiated from one another, which is putting pricing pressure thereupon, which in turn affects the overall ranging decisions of the operators; so there’s definitely pricing pressure going on.

Meanwhile, the problems in China revolve around smartphones primarily. However, Nokia is getting whacked on feature phones too. Elop said:

Overall, it is worth noting that the impact here is both smartphone and feature phone. So this is — even though a lot of the news has been about Symbian and so forth, we face very specific competitive pressures on the feature phone side as well, and face some of the same portfolio challenges here.

Now that being said, on the feature phone side we are just in the last couple of days beginning to ship in our dual-SIM products into emerging markets, which we have great hopes for. So there’s a lot of positive things happening there, but there’s definitely a situation here where it’s not only the Symbian range of devices but also feature phone devices that are under competitive pressure.

Given those problems, Nokia has a rough road ahead before it gets to Windows Phone 7 devices. The big question is where Nokia’s market share will sit once the Android onslaught subsides.

We’re going to see a lot of Windows Phone hardware come 2012. Evidently, Nokia’s planning to flood the market with it.

After it brings its first batch of Windows Phone devices to market–perhaps even later this year, Nokia plans to roll out additional devices on a regular and frequent schedule, says Jo Harlow, Nokia’s EVP of Smart Devices.

“We should be launching new devices in a rhythm that might be every couple of months, every three months, something like that,” she told PC Magazine. “We’re going to keep coming with new devices in order to have something to talk about.”

Which may prove to be a wise move. In the first quarter of 2010 Nokia’s Symbian OS was running on 44 percent of smartphones globally, according to Gartner. A year later it was running on just 27 percent.

Pushing out a series of slick Windows Phone handsets in relatively quick succession might just keep the Nokia brand top of mind for a public obsessed with the iPhone and its Android rivals. Which could do much to help the company regain that lost market share and perhaps even enable the Microsoft-Nokia alliance to create a contender smartphone ecosystem.

“… The Nokia-Microsoft partnership [has] the best chance to create a third viable [smartphone] ecosystem,” Cannacord analyst T. Michael Walkley says. “… carriers and distribution partners worldwide will support a third ecosystem if volume sales to consumers are large enough, and Nokia still has the global distribution and brand to make this happen if the new smartphones are compelling.”

Finnish handset giant ditches mobile services brand in favour of using Nokia name; transition to be complete by end of 2012.
Nokia revealed on Monday plans to abandon the Ovi brand and market its range of mobile services under the Nokia name instead.

The Finnish handset giant said the rebranding will begin in July starting with services included on new devices, while existing customers will receive software updates that will make all the required name changes. Nokia expects to complete the transition by the end of 2012.

“Our mobile experiences are tightly integrated with our devices – there is no longer a differentiation,” claimed Nokia’s chief marketing officer Jerri DeVard, in a blog post.

“By centralising our services identity under one brand, not two, we will reinforce the powerful master brand of Nokia and unify our brand architecture,” he said.

Furthermore, in light of the company’s deal with Microsoft to use Windows Phone 7 for its smartphones, the move will cut the number of potential brands Nokia has to push from three to two.

DeVard insisted the rebranding does not mark a change in its services strategy.

“These last few years, and moving forward, our mission remains unchanged,” he said. “We will continue our work to deliver compelling, unified mobile service offerings and next-generation, disruptive technologies.”

Nokia first unveiled Ovi – meaning “door” in Finnish – in August 2007 as part of its plan to move beyond devices towards Internet-based content services. Then-CEO Olli-Pekka Kallasvuo said at the launch that Ovi would be the brand through which Nokia would offer its customers “the complete experience”.

Industry observers at the time raised concerns that Nokia risked treading on the toes of its operator partners with its move into over-the-top services. However, what transpired to be of more concern to Nokia in the years that followed were the arrival of Apple iPhones and Google Android devices, whose competing offerings have since taken the limelight and the smartphone market share away from Nokia.

That growing rivalry culminated in Nokia’s adoption of fledgling rival Windows Phone 7 at the expense of its in-house platform Symbian, a move aimed at driving the uptake of Microsoft’s mobile OS and spurring a recovery in Nokia’s smartphone fortunes.

Microsoft Corp. and Nokia Oyj are among four technology companies to challenge Apple Inc. ’s European Union-wide trademarks for “Appstore” and “App Store.” Photographer: George Frey/Bloomberg
Microsoft Corp. (MSFT) and Nokia Oyj (NOK1V) are among four technology companies challenging Apple Inc. (AAPL)’s European Union-wide trademarks for “Appstore” and “App Store.”

Nokia, the world’s largest mobile-phone maker, Microsoft, Sony Ericsson Mobile Communications AB and HTC Corp. (2498) all filed separate requests yesterday with the EU trademark agency in Alicante, Spain, seeking to invalidate Apple’s trademark rights.

The companies “are seeking to invalidate Apple’s trademark registration for ‘APP STORE’ and ‘APPSTORE’ because we believe that they should not have been granted because they both lack distinctiveness,” according to a statement from Redmond, Washington-based Microsoft, the world’s largest software maker.

A decision by the agency could be appealed all the way to the EU’s top court in Luxembourg. Apple, which pioneered the sale of mobile-device applications, accounts for more than three-quarters of revenue in the industry — even as Google Inc. (GOOG)’s app sales grow faster. Apple’s App Store offers more than 350,000 apps for iPhones, iPods and iPads. It will bring in $2.91 billion in revenue in 2011, up 63 percent from last year, according to researchers at El Segundo, California-based IHS ISuppli.

Amazon.com Inc. (AMZN) on April 15 opposed Apple’s two EU trademarks, according to documents on the trademark agency’s website. The dispute over the validity of the Apple rights has also reached the U.S., where Amazon, after being sued for trademark infringement by Apple, argued the intellectual property right was invalid.

Alan Hely, a U.K.-based spokesman for Cupertino, California-based Apple, didn’t immediately respond to voice mail or e-mail messages seeking comment.

Mark Durrant, a spokesman for Espoo, Finland-based Nokia, and Sony Ericsson spokeswoman Mandy Slater confirmed the companies also objected to the trademark registration.

The phrase “means just what it says, a store for ‘apps,’ which in itself is a generic term for the services that the trademark registrations cover,” Durrant said in an e-mail.

Apple’s App Store, started in 2008, offers downloads of programs from the company and third-party developers. Sales of apps from sites run by Apple, Google, Nokia and Research In Motion Ltd. (RIMM) will rise 78 percent this year from $2.1 billion last year, IHS ISuppli said.

Decisions by the EU trademark agency’s cancellation division can be appealed first to the agency’s own appeals board and later to the EU’s two top courts.

March 30 (Bloomberg) — Nokia Oyj, the world’s biggest maker of mobile phones, had its debt rating cut for the first time by Standard & Poor’s, which cited further market share losses and “weaker” operating margins at the Finnish company.

The long-term rating was lowered one step to A- with a stable outlook, S&P said in a statement today. S&P has since June 1998 ranked the debt A, the sixth-highest of 10 investment- grade ratings. Moody’s Investors Service has an equivalent A2 rating. Nokia had about 5.3 billion euros ($7.5 billion) in long-term debt at the end of 2010.

“The downgrade reflects the revision of our business risk profile assessment on Nokia to ‘satisfactory’ from ‘strong,’ primarily because we expect that Nokia’s smartphone portfolio will make further significant market share losses during 2011 and 2012 until it has completed its adoption of Microsoft’s Windows Phone software as its new primary software platform for smartphones,” S&P said in today’s report.

Chief Executive Officer Stephen Elop announced on Feb. 11 that Nokia would adopt Microsoft Corp.’s Windows Phone 7 as its main operating system, tapering off product lines based on its Symbian software, the world’s best-selling smartphone system. The CEO now has to help Microsoft attract developers to Windows Phone 7 and at the same time try to keep them loyal to Symbian to keep up sales while it prepares models based on Microsoft system.

Android Vs. Symbian

Rival Google Inc.’s Android will displace Symbian as the top selling smartphone system this year, while Microsoft will have a share of about 5.5 percent, International Data Corp. forecast yesterday. The researcher said Symbian’s share may fall to 0.2 percent in 2015 from 20.9 percent this year.

Nokia’s share of smartphone sales by volume has declined to 30.8 percent in the fourth quarter from 50.8 percent when Apple Inc. began shipping its iPhone in 2007, according to Gartner Inc. figures. Its overall share of the mobile market tumbled to about 27 percent from 36.7 percent in the same period.

The rating change isn’t expected to affect Nokia’s financial position or financing costs, spokesman James Etheridge said by telephone.

S&P said Feb. 1 that it may lower Nokia’s debt rating, citing the company’s declining smartphone market share. Moody’s placed the debt on review for a possible downgrade on Jan. 28.

LONDON, Feb 17 (Reuters) – Chipmaker Intel Corp (INTC.O) said it would look for new partners for the MeeGo mobile operating system after partner Nokia chose to focus on Microsoft’s Windows Phone platform. [ID:nLDE71A0DG]

Intel Chief Executive Paul Otellini said in a meeting with analysts in London, accessed by Reuters via conference call, that Nokia’s (NOK1V.HE) choice of Microsoft (MSFT.O) over Google’s (GOOG.O) Android platform, sidelining the open source MeeGo platform in the process, was a financial decision.

“I wouldn’t have made the decision (Nokia CEO Stephen Elop) made, I would probably have gone to Android if I were him,” he said. “MeeGo would have been the best strategy but he concluded he couldn’t afford it.”

He said Nokia would find it hard to differentiate using the Windows platform: “It would have been less hard on Android, on MeeGo he could have done it.”

“We will find other partners. The carriers still want a third ecosystem and the carriers want an open ecosystem, and that’s the thing that drives our motivation,” he said.

MeeGo was created last year by the merger of Nokia and Intel’s Linux-based platforms Maemo and Moblin.
(Reporting by Paul Sandle, Editing by Mark Potter)

No matter how closely the two match their hardware and software efforts, they can’t compete against Apple’s total, integrated package

Early Friday morning, Microsoft and Nokia announced a partnership that will see Windows Phone 7 become the primary platform for Nokia’s high-end smartphones. It’s a bold move that will help solve Windows Phone 7′’s small market-share problem in one fell swoop if it goes as planned. But is it enough seriously to challenge Apple, arguably the two companies’ most entrenched competition?

In a word, no. Bobbie Johnson argued in his piece that just combining two companies with flawed strategies does not necessarily mean that each will shore up the other’s weaknesses. That’s true, and it’s the weaknesses of both that left the path open for Apple to gain and keep its significant advantage in the high-end smartphone market. Here are the core advantages Apple’s mobile products have that Nokia and Microsoft playing nice simply won’t solve.

No Developers, No Dice
Windows Phone 7 has had some success attracting developers in the short term, but there are indications this might have had more to do with grand gestures and publicity stunts, and less to do with the long-term viability of the OS app platform.In the very early days, prior to launch, Microsoft was said to be offering cash to potential developers to get them on board.And even as recently as last November, some were claiming Microsoft is offering comped devices to make WP7 development more appealing.

Despite a promising start, it’s not all roses for WP7 development. One successful (top 50) developer for the platform recently revealed his sales figures, and they were dismal. Revenue from the sale of his app was barely enough to keep the lights on, let alone build a business on.

Of course, Nokia, as the biggest smartphone maker in the world, should have a healthy developer pool to draw from. It should, but it doesn’t. Even before the move today, developers had been frustrated with Nokia’s development platform efforts.Now that the company is basically telling devs they should throw out what they’ve learned and switch to a completely different set of tools (since Nokia’s cross-platform Qt development framework isn’t part of its WP7 strategy), I wouldn’t be surprised if most just throw up their hands and move to a stable model with a proven ability to generate revenue, like iOS.

Yawning Chasm
The app gap is often cited as a prime reason behind Apple’s success, but it bears repeating. Currently, iOS has almost 350,000 active apps available to consumers through the App Store. Windows Phone 7 has about 8,000 apps. Even with a growth rate of 125 apps each day, Apple’s advantage at this point may be insurmountable. Each Apple iOS device averages more than 60 downloaded apps, and the App Store remains the top destination by a huge margin in time spent browsing app marketplaces by consumers.

In making users feel like they have a financial stake in a mobile platform, little else compares with apps. Changing platforms means buying all new apps, so if a platform is good at selling software, it’s more likely to lead to subscriber lock-in or loyalty. Apple has the added advantage of offering multiple, nonphone platforms that also use and encourage the sale of apps (iPod touch and iPad), which adds to the perceived value of software purchases for consumers. Try as it might, Windows can’t gain traction in the personal media player market, and WP7 doesn’t seem poised to make the jump to tablets soon.

Holistic Is Hard to Beat
Under the new arrangement between the two companies, Nokia builds hardware and Microsoft builds software. Apple builds both. The advantage of having both hardware and software teams constantly working together to deliver the best possible consumer experience as a total product cannot be overemphasized. Any partnership between two companies, no matter how closely it may resemble an actual merger, isn’t one.Corporate cultures, offices, and ultimate goals remain distinct.In this case, that’s especially true, since Microsoft announced this was a nonexclusive deal, and it would still be working with other hardware partners (although their history of doing so isn’t exactly encouraging).

Apple’s ability to pair the hardware and software development sides of making a smartphone not only allows it to win the UX game; it also advantageously affects cost and the pace of breakthroughs and advances—and downplays the importance of internal specifications. It’s why an iPhone that’s almost a year old can still compete in real-world performance with just-released hardware from competitors, and it’s a big part of why Apple enjoys such high margins on the sale of each piece of hardware it makes.

Because Nokia and Microsoft aren’t starting from scratch, the partnership will most likely bear all the earmarks of success, at least from the outset. If they do it right, we’ll see the simultaneous release of a bunch of shiny new handsets sporting WP7, and these will be decently well-received by Nokia’s existing customers. But without significant changes from either camp in the way they think about how to make phones and software, Apple doesn’t have to worry about being knocked off its rock just yet.

Nokia’s chief executive Stephen Elop issued a call to arms last week, warning his troops that the company was standing on a “burning platform.”

“We have more than one explosion,” he wrote in an internal memo that surfaced on Tuesday. “We have multiple points of scorching heat that are fueling a blazing fire around us.”

In the boldly-worded memo, Mr. Elop, a Microsoft veteran, blasted the company for failing to innovate fast enough and falling behind companies like Apple and Google:

Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyze or join an ecosystem.

As Mr. Elop looks to overhaul the company, could deal-making be on the horizon for Nokia, either as the buyer or the seller?

Here’s a look at the deal speculation swirling around Nokia:

Navteq
Nokia purchased navigation software maker Navteq in 2007 for $8.1 billion. Several G.P.S. devices and web applications use Navteq’s service, including Garmin and Microsoft’s Bing maps. According to Adnaan Ahmad, an analyst with Berenberg Bank, Nokia purchased Navteq, hoping to bundle the service into paid mobile applications. However, with the rise of Google’s Maps, that plan never panned out.

“They tried to integrate it with their devices, but then Google started offering it for free, so how do you compete with free?” Mr. Ahmad said.

Nokia could try to sell the asset to Garmin or Microsoft, according to Mr. Ahmad. But it will be difficult to recoup its initial investment. Alternatively, Mr. Elop may hold on to the property, and take advantage of Navteq’s improving financials. The business reported revenues of 1.0 billion euros ($1.4 billion) for 2010, a jump of 49 percent from the prior year.

Networks Business
There is also the possibility that Nokia will unload its multi-billion dollar wireless infrastructure business, Nokia Siemens Networks, a joint venture with Siemens. The business is a fairly substantial segment, with 12.7 billion euros ($17.4 billion) in revenues for 2010. A Chinese suitor, such as telecom giant Huawei, could emerge, and there has already been interest from private equity firms, according to Mr. Ahmad. But a deal does not seem imminent. “Nothing has come to fruition so far and there could be political or security reasons that would block a deal with a Chinese company,” he said.

Application Developers
While few analysts expect a multi-billion acquisition from Nokia in the near term, the company has enough dry powder to complete several smaller deals. Nokia boasted 7.0 billion euros ($9.6 billion) in cash, at the end of the fourth quarter.

As Mr. Elop discussed in his memo, one of the company’s top priorities is to build out its mobile ecosystem. To that end, Nokia recently held internal discussions on the possibility of buying small application developers to create high quality apps for its devices, according to one person close to the company who was not authorized to speak. Its rivals have made similar moves. In December, Research in Motion paid an undisclosed amount for The Astonishing Tribe, a software developer that specializes in mobile design. In addition, Nokia has also talked to software maker Adobe, about creating developer tools together, the person said.

Still, some analysts say, creating a core suite of top-notch applications through acquisitions or partnerships would only be a start for the struggling Nokia.

“If Nokia bought some app developers they could pre-load a few cool apps on their phones with more features, but that does nothing to build an ecosystem that can compete with the 300,000 apps available on the iPhone,” said Benedict Evans, a consultant for Enders Analysis in London.

“There’s no hail Mary solution here,” Mr. Evans said.

Microsoft
There is also the prospect that — at some point— Microsoft could try to acquire Nokia.

Nokia and Microsoft discussed the matter last year, but talks never turned serious, according to one person close to Nokia, who spoke on the condition of anonymity because the conversations were confidential.

Microsoft is keen to grow its mobile business. However, the software maker’s D.N.A. is also very different than the handset maker’s.

Then, there’s the question of price. Nokia’s market capitalization is $43 billion, Microsoft has $41 billion in cash, according to its last quarterly report. The deal is possible, but it would be a tough pill for shareholders to swallow.

“It would be huge mobile business that fundamentally changes the economics of Microsoft’s business model,” Mr. Evans said. “Christ, it’s AOL-Time Warner again.”