Nokia shares rise as Windows Phone 7 rumours spread

Nokia, amid rumours that the mobile giant is preparing to embrace Windows Phone 7 in its product line, saw a four percent rise in shares since Monday, The New York Times reports. Speculation has been rife for months, but as Nokia CEO Stephen Elop is said to be preparing to address investors at a speech in London next week, rumours are surfacing that Elop could be announcing a Microsoft partnership on Friday.

Speculation has been fuelled by an open letter from Berenberg Bank's Adnaan Ahmad, where the analyst urged the two companies to enter into an exclusive deal, citing the benefits of a manufacturer fully backing a single mobile OS ("Do you really think HTC, Samsung and LGE are pushing your products ahead of Google's?") as well as access to "a potential 20-25%" of global marketshare. An exclusive deal, however, would involve abandoning Symbian, having shipped on an estimated 385 million devices.

Such a deal could prove to be the boost that both companies need. Nokia last year reported a 40% drop in profits, and its success in the United States has left a lot to be desired. Microsoft also has some catching up to do, with Windows Phone 7 holding a mere 2% market share, as opposed to Android's estimated 32.5% market share.

Not everyone is convinced though. Renowned blogger Mary Jo Foley dismissed the rumours in a tweet earlier today, and analyst Carolina Milanesi of Gartner in London was less than convinced. Voicing concerns over the success of a potential partnership, Milanesi said "Windows Phone 7 has been disappointing and Microsoft is not sexy to the consumer from a mobile phone perspective."

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