Pressure for Nokia/Windows phone 7 grows as analyst calls Meego “the biggest joke in the tech industry right now”

Rumours of a Nokia/ Microsoft Windows phone 7 tie-up continues, despite many journalists trying to casts it as a move to Android instead.

An open letter by analyst Adnaan Ahmad, head of technology equity research at the London branch of Germany’s Berenberg Bank, makes it clear he believes the best move for Nokia would be Windows Phone 7.

He writes:

1. Android a no-go for now. This may have been a good idea one to two years ago, but it is not today. You will never be able to catch up with Samsung, which should rule the Android show midterm given its economies of scale, product breadth (TVs, PCs, phones and tablets), as well as its captive component base. And that market is going to get even more crowded with China Inc (ZTE, Huawei et al) joining Sony Ericsson, HTC, Motorola and PC vendors. And more significantly, how is anyone going to differentiate on Android long-term?

2. Announce an EXCLUSIVE deal with your ex-colleague, Steve: you get access to their WP7 intellectual property (IPR) scot-free and access to the US market where your share has dived to the low single-digit level, and in so doing cut your bloated handset business R&D budget by at least €1 billion, or 30%, which should add 300bps to your operating margin. Get rid of your own proprietary high-end solution (MEEGO) – it’s the biggest joke in the tech industry right now and will put you even further behind Apple and Google. Focus your high-end portfolio around WP7, and over time you can take the cost down (that’s Steve’s job and cost base) to get this into the mid-range market. Push your Symbian solutions into the low-to-mid-range smartphone market as quickly as possible to defend market share versus Android’s upcoming lowered cost ecosystem.

While Adnaan’s open letter is just to nudge the company, Wedge Partners analyst Brian Blair in a research note suggests the move is already underway, and that his his checks suggest Nokia will adopt Windows 7, and could merge some features of its own Meego software into platform.

“Until recently, we believe there were a handful of Meego-based handsets slated for release in the back half of 2011, though we  believe the potential release schedules for these phones have been halted indefinitely, a sign that Nokia is about to dramatically change its direction,” he writes.

Read more at Forbes here.

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