Nokia has been Microsoft's closest Windows Phone partner since the mobile operating system launched.
In a recent risk filing by Nokia, the Finnish smartphone developer has admitted its business could be negatively impacted by Microsoft potentially developing its own Windows Phone device.
Nokia’s Form 20-F filing, released Thursday, states Microsoft could develop its own smartphone, which has been rumored in the past, following the Redmond company’s decision to create its Surface tablet line. The same filing recently noted that Nokia will eventually end up owing $650 million to Microsoft as a result of the two companies' partnership.
“Microsoft may make strategic decisions or changes that may be detrimental to us. For example, in addition to the Surface tablet, Microsoft may broaden its strategy to sell other mobile devices under its own brand, including smartphones,” the filing states. “This could lead Microsoft to focus more on their own devices and less on mobile devices of other manufacturers that operate on the Windows Phone platform, including Nokia.”
The news comes less than five months after Nokia CEO Stephen Elop said a hypothetical Microsoft-developed phone would be a “stimulant to the ecosystem.”
Nokia’s filing also lists other risks inherent in its close partnership with Microsoft, such as not being able to convince Microsoft to create “the features or functionalities for the Windows Phone platform that we deem most important.”
In fact, the document has a section solely dedicated to how Nokia’s “partnership with Microsoft is subject to risks and uncertainties,” ranging from employees simply being dissatisfied with the partnership to Microsoft’s hypothetical smartphone development.
While the news isn’t groundbreaking – Nokia is required by the U.S. Securities and Exchange Commission to provide “quantitative and qualitative disclosures about market risk” – it does go against Elop’s previous statements. As noted by ZDNet, Nokia has never cited the risk before.