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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

February 14, 2011 at 5:40 AM

Mobile World: Intel surprised by Nokia embrace of Windows Phone 7

BARCELONA, Spain – Intel was surprised when Nokia announced it would put Windows Phone 7 instead of Meego on its smartphones.

The two had been collaborating to make Meego a smartphone operating system for Nokia. The Finnish phone maker announced Friday that Windows Phone 7 will become the primary operating system on its smartphones in a partnership with Microsoft.

“That was definitely disappointing to us,” said Reuben Gallegos, Intel investor relations manager, at a briefing at Mobile World Congress. “We were not expecting that. … Literally the decision came so fast we don’t know what will happen long term.”

Meego will become an open-source alternative for Nokia.

“We will still work with them, maybe not so closely now,” Gallegos said.

The partnership with Nokia is a second blow Microsoft has delivered to Intel this year. In January, Microsoft it would design its next version of Windows to run on chip sets designed by ARM, a competitor to Intel.

The two companies have historically had a very strong partnership that drove the pace of PC development.

But as the PC market slows and the market for tablets and smartphones expands, the relationship between the two companies has fractured.

Like Microsoft, Intel stock is facing the same lackluster shareholder interest.

“There’s overhang from tablets and handsets” that is driving down Intel’s stock price, Gallegos said. He said Intel will be a player on smartphones and tablets. “We expect to have handsets out this year.”

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