Will Nokia stick or twist?

Nokia’s latest financial results tell a now-familiar tale. The once dominant Finnish handset giant is continuing to shed market share due to weaknesses in key markets (notably the US) and its failure to compete in the high-end smartphone space. This has been the trend for a number of years and took few by surprise. However, with the 2010 financial year now put to bed, attention has turned to what newly-appointed CEO Stephen Elop plans to do next. Indeed, speculation is rife that Elop will show his hand at a special event in London next Friday (11 February) on the eve of the GSMA Mobile World Congress. Nokia made plenty of references to the event on its earnings call last week but gave nothing away, prompting industry-watchers to suggest that Elop could have a big announcement up his sleeve. But what exactly? Here are the likely options:

Go all in with MeeGo
Nokia’s MeeGo open source mobile OS – a joint venture with Intel - was unveiled a year ago but has maintained a relatively low profile ever since. Focused on the high-end, MeeGo is Nokia’s long-term play to compete with the likes of Apple in both premium smartphones and tablets. But with its flagship Symbian devices continuing to underwhelm, is Nokia planning to start afresh with a series of powerful MeeGo-based mini-computers? No major MeeGo phones have been announced to date, suggesting that Nokia and Intel may have been working on something big behind the scenes. Indeed, reports are already emerging of a new N-Series phone in the works running Intel’s next-generation mobile chipset. Ramping up its MeeGo focus is Nokia’s most likely move, but will it be enough?

Get into bed with WP7
The jury is still out on Microsoft’s Windows Phone 7; while it has garnered generally good reviews it has yet to benefit from a genuinely flagship device, which is why a Nokia WP7 range could be a fillip for both players. Such a partnership would also represent a strong challenge to the Android community and would allow Nokia to benefit from a fast-growing developer ecosystem. As an ex-Microsoft exec, it’s not beyond the realms of possibility that Elop has been talking to his former colleagues in Redmond, but will Nokia want to support both WP7 and MeeGo? Probably not.

Join the Android bandwagon
Fast-growing smartphone rivals such as HTC and Samsung have shown what can be done with Android, but it would be a desperate move for Nokia to follow suit. It has long valued its ability to differentiate its offerings from rivals and it would struggle to make Android phones that stand out from the pack - even if it manages to develop a killer UI. A long shot.

If you can’t beat 'em, buy 'em
Since its fall from grace, Nokia has been linked with numerous acquisitions that would have allowed it to make up lost ground in smartphones, notably Palm (which was eventually snapped up by HP). Of the limited M&A options available in this space for Nokia today, the most obvious fit is with the newly spun-off Motorola handsets division, Motorola Mobility. The US firm has reinvented itself as a boutique-maker of Android phones for the likes of Verizon Wireless, and is still strong in key markets such as China. An acquisition by Nokia would instantly give the Finnish firm the North American presence it has long-craved, but integrating the two brands and portfolios would present a major headache. A longer-term possibility, but unlikely to be on the agenda at next week’s event.