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Rumors Confirmed: Nokia Releasing First Android Phone

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Microsoft Corp. is turning to an unlikely ally to boost its presence in mobile phones: archrival Google Inc.

Nokia Corp., whose mobile-device business will soon be bought by Microsoft, plans to introduce this month a smartphone powered by a version of Google’s Android mobile software, according to people familiar with the matter.

Nokia engineers had been developing the Android phone before Microsoft struck the €5.4 billion ($7.4 billion) deal last September to buy Nokia’s handset business and license the Finnish company’s patents. It hasn’t been clear before now whether Nokia would move ahead with the Android phone, expected to be introduced at the Mobile World Congress industry trade show starting Feb. 24.

The decision to release the Android phone underscores how badly Microsoft and Nokia each miscalculated in the mobile market. For technical reasons, Microsoft’s Windows Phone operating system doesn’t yet work on the low-cost smartphones that have become big sources of growth, particularly in emerging markets.

Nokia was once the king of cellphones in emerging markets. But it has lost ground because it was slow to respond to Android’s popularity in many countries. In India, where Nokia’s Symbian-powered phones held a big share of cellphone sales just a few years ago, Android was installed on 93% of new smartphones shipped there last year, according to estimates from research firm IDC.

The Nokia phones will differ from most other Android smartphones, and won’t access some Google-developed features or Android apps from the Google Play storefront, said the people familiar with the matter.

Instead, the phone will come installed with digital services created by Nokia and Microsoft, including mapping service Here and streaming music service MixRadio, as well as a Nokia application store.

The strategy echoes the approach of Amazon.com Inc., which has used a modified version of Android for Kindle tablets that don’t accept Android apps.

Some mobile-phone companies in emerging markets also sell Android phones that don’t connect to the Google Play app store. Google backs Android, but the software can be modified and distributed by phone makers and developers.

Google declined to comment.

Read the full story at wsj.com

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