Analyst: Nokia's Windows Phone 7 gamble "unlikely to be successful"

Nokia's move to launch a series of smartphones based on Microsoft's Windows Phone 7 operating system is "unlikely to be successful", according to a note from a financial analyst. AllThingsD.com reports that Bernstein analyst Pierre Ferragu stated its opinion after Nokia reported on Friday that it recorded a loss of 487 million euros in its last financial quarter and that it is losing market share in both regular mobile phones as well as smartphones.

In his analyst note, Ferragu states, "In a fast changing market, Nokia is losing ground very rapidly. The company lost significant market share again in the second quarter, 7pts in smartphones and 6pts in basic phones." In fact Nokia lost its title of the number one seller of smartphones in this quarter to Apple's iPhone. Nokia sold 16.7 million smartphones last quarter compared to Apple who announced earlier this week that it had sold 20.3 million iPhone units.

Ferragu stated that, "The collaboration with Microsoft now appears to us unlikely to be successful, as Nokia’s brand is losing ground too fast." Another issue for Nokia is the rise in popularity of phones based on Google's Android operating system. Ferragu stated, "Android has been clearly identified by management as being the major driver behind the current negative trend of Nokia, especially in Europe. The operating system grabbed 36 percent market share last quarter vs. 11 percent a year ago and we are concerned that against such momentum, no third ecosystem will have a chance to emerge." Nokia is scheduled to release its first phone with Windows Phone 7 by the end of 2011.

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