Microsoft Can Save Nokia, but Will It?

NEW YORK (TheStreet) -- Don't make the situation at Nokia (NOK) more complicated than it is. It's pretty straightforward.

Nokia fell from grace. No mere mortal can explain what happened. The company's not-so-new CEO Stephen Elop thinks he knows, but let's be slightly more honest than John Edwards here -- Elop is almost as clueless as the rest of us. And I say "almost" simply because he has seen the books. I wonder how many shots of Finlandia Elop needed after reviewing that train wreck.

Think about it. Elop lives Jamie Dimon's nightmare every single morning when he punches in for duty. What an awful gig.

That feeling Dimon reportedly had in the pit of his stomach when he was told of JPMorgan's (JPM) trading loss, that look of pending vomit on his face, it about sums up Elop's daily existence. Steve Jobs couldn't even turn that ship around. But just ask Apple (AAPL), Microsoft (MSFT) can.

They Say Jump, You Say How High

It could turn into an abusive relationship, because, at day's end, Nokia needs Microsoft badly. We know this much. We do not know, however, the extent to which Microsoft needs Nokia.

If Microsoft asks, it will receive. But, will it ask? The fact that we even entertain this question helps illustrate the foothold Apple's iOS and Google's (GOOG) Android OS have on the mobile market. Microsoft desperately needs Windows 8 to break through on smartphones and tablets. For this to happen, several things must fall into place.

In terms of what Microsoft controls, it needs to build an excellent, seamlessly integrated platform between your smartphone, tablet, PC and (and this might be the silver bullet) the Xbox SmartGlass app. SmartGlass could be an Apple and Android killer.

Building a great product does not always equate to success. Hardware companies need to build devices that run your OS, retailers need to push these devices and consumers need to adopt them. That can be a tough nut even for an aggressive and well-heeled squirrel to crack. Nokia enters the conversation at point number one.

Samsung does not necessarily have the same incentive as Nokia does to cooperate with Microsoft. Nokia's life depends on it, Samsung's doesn't. Ultimately, Microsoft needs key hardware makers to get behind Windows 8 smartphones and tablets or it does not stand a chance against Apple, let alone Android. Operating from less of a position of strength, it's not quite as easy as it used to be for Microsoft to strong-arm its peers.

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