ST-Ericsson, will supply silicon to Nokia for use in its upcoming smartphones running Microsoft's Windows Phone 7, STMicroelectronics CEO Carlo Bozotti told Forbes at the company's investor and analyst event last week.
Up until now, US-based Qualcomm has had sole control of the Windows Phone market as Microsoft sought to ensure tight integration between its hardware and operating system. This latest announcement is illustrative of the changes taking place following the tie-up between Microsoft and Nokia as Nokia brings some of its relationships to bear on the partnership. ST-Ericsson is the joint venture between STMicroelectronics and Ericsson.
ST-Ericsson and its predecessors have had long-running relationships with Nokia and these have proved vital in the company's ability to secure a foothold with the new products for which Nokia and Microsoft have such high hopes.
However, this does not mean that all in the garden is rosy for ST-Ericsson. The company reported a 33 per cent drop in revenue for the first quarter along with a $179 million (€126 million) loss.
As a result STMicroelectronics is trying to reduce its overall reliance on the wireless by building other segments. However, it is not backing out of it as Bozotti told Forbes that ST-Ericsson is investing $1 billion (€704 million ) in research and development, with the parent companies splitting half of the investment.
Speaking at the same event, ST-Ericsson CEO Giles Delfassy told investors and analysts that Nokia's adoption of the Windows Phone platform had introduced further uncertainty into the market for the company, and that the near-term financial position was deteriorating faster than expected as legacy products dropped off fast.
Therefore much is being bet on the success of the company'sU8500, which will feature in the first of Nokia's Windows phones, and new NovaThor products. Delfassy predicted a solid ramp up for the U8500 in the second half of this year, while Bozotti told Forbes that ST-Ericsson can increase its share of the $20-plus-billion wireless market to 15 per cent. That would represent a near-doubling of its current market share.
Nokia embraces Microsoft's Windows Phone 7, warns of mass job cuts
Report: Nokia on verge of deal with Microsoft for Windows Phone 7
Rumor Mill: Nokia CEO paints picture of 'burning platform' in memo