Nokia’s biggest move in the recent past i.e. joining forces with Microsoft is one that could make or break the company. Although many have predicted that the combination of these two entities could go wither way, one has to admit there is potential here.

However, the Nokia camp has taken into consideration that recent shift to use Windows Phone 7 as an OS on their device might not be met with too favorable a view, at least initially. In fact, Chairman Jorma Ollila recently stated that the move will impact the company’s earnings throughout most of this year. “For a significant part of the year the transition will be seen in the results,” Ollila told Finnish national broadcaster YLE.

Last week, when Nokia reported a 73 percent fall in fourth-quarter earnings, it said it was not able to give forecasts beyond the first quarter. The sales of their big first WP7 device i.e. the Nokia Lumia 800 didn’t really fare as well as hoped, but possibly their upcoming Lumia 900, the next addition to the series, might just fare better as the OS updates that could come bundled with might just make it more appealing. The simple fact is that at the moment, the OS is constraining and that could be the issue for most users who choose other platforms. In time however, the system is going to evolve considerably and could make a significant difference for the Finnish company.

Not looking too good

Might not be too good a year

The sales of its new Windows Phones have so far failed to dent the dominance of Apple and Google, but Ollila said the situation would change and, as the Windows Phone is a completely new platform, the take-off will take time.

Nokia will make it into the three, it’s completely obvious and the first signs are already there,” he said. “None of the operating systems have taken off quickly. It will take time, as we have seen, and as was expected.”

Nokia said last week it sold more than one million Windows Phones, over the course of two months, with developers showing increasing interest. Apple sold 37 million iPhones in the last quarter.

When looking at the bigger picture, it shows that three operating systems will dominate in the near future and each of them will have one strong manufacturer, with Nokia having a very good chance to be one of the three,” Ollila said. Long-time chief executive and chairman, Ollila is scheduled to be replaced by Risto Siilasmaa at the annual shareholders meeting in May.

The world's largest cellphone maker (by volume) will have to stick to their guns now and push the boundaries of the OS hard if they are to seriously challenge the likes of Apple’s iPhone and Google Inc's Android.

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