Nokia's (NOK) Long-Term Prospects Improve with Microsoft (MSFT) Deal

Even though most media coverage on the Nokia (NYSE:NOK) decision to embrace Microsoft's (NASDAQ:MSFT) Windows Phone 7 as the platform for their smartphones, Microsoft will definitely come out a winner in it.

But I'm still going to keep on with the Nokia theme, as most people are aware of Microsoft and its strengths and weaknesses.

Barring terrible execution and incompetence, this will be a good deal for Nokia over the long term. How long it'll take to benefit from the deal is more the question, rather than whether it's a good move or not.

The quicker and more efficient the partnership is in bringing products to the market, the better for them though, as it'll help stem the short-term damage that is inevitable during the transition period.

Even moving fast, as far as the implementation of the overall strategy for the two companies, it could take a couple of years. The good news is with low expectations in that regard, if the companies could do it quicker, it would be considered a strong positive, especially for Nokia, whose business is mobile phones.

One strategy they could employ would be to strengthen their already No. 1 spot in global sales.

While Nokia should gain share in mature markets like the U.S. from their partnership with Microsoft, that's going to take time, and they are already anemic there. Why waste their time in the short term where their weakest when they can shore up where their strengths are? I think that's the way to go for them.

From there they can work from a solid foundation and expand into countries and regions where they have lower exposure. Microsoft will be able to help them in the mature markets over time, and that will definitely be a big plus for Nokia.

The good news for Nokia is the bar has been lowered so far in the mind of investors and analysts, that anything they do that exceeds expectations will help drive the company and strengthen the weakened brand.

Long term I think the Nokia and Microsoft partnership is going to surprise a lot of people as to its success.