You would think that the largest software company and the largest cell-phone manufacturer would be more successful than they are in the smart-phone market. They may be participants, but they aren’t the biggest, and their involvement is slipping.

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Nokia is still the biggest cell-phone maker by volume of cell phones sold. Its Symbian mobile operating system (OS) has been a world leader for years, just not in the U.S. But now that lead is slipping fast.

As of the end of the fourth quarter last year, Symbian’s market share fell to 30.8% and was surpassed by the Android OS with 32.5%. And that appears to be continuing. With smart phones quickly becoming the more dominant form factor in mobile handsets, Nokia has been taking steps to correct that problem.

Microsoft also has been involved with the smart-phone marketplace from the start with its Windows Mobile OS. It has captured some business, but it hasn’t even come close to what Apple and Android are doing. Microsoft’s Windows Mobile 7 was a great step forward, but so far it hasn’t shown any big new volume. It may have only a few percent of the mobile OS market share at best.

Both of these big corporations have lots to lose unless they act to get back in the game. So what do they do? They join forces. It isn’t a bad idea, and it could produce a real winner. Since the announcement, I’ve heard more skepticism and negative comments than positive thoughts.

But I’m going to take the positive view here, since who really knows what will happen? You never seem to make big progress without sticking your neck out. The combination could be a big hit or a real flop. If it’s a flop, what do you think “Plan B” is for these guys? Heads will roll.

Anyway, after seeing the lack of success last year, Nokia kicked out its top guys and hired Microsoft-ex Stephen Elop to be the new CEO. He got to work and has made some significant managerial changes, essentially dethroning the Symbian platform and a backup it had with Intel called MeeGo. This has really upset the system there with lots of Finnish exec departures. With Elop’s background it is no surprise he turned to Microsoft for a new potentially better OS.

Actually, the Mobile 7 OS is pretty good. Reviews have been excellent. I have used one, and I like it. It’s different. I still think the Apple iOS is the best, as I am not comfortable with Android, as good as it seems to be. I guess it’s all in what you get used to.

Anyway, Mobile 7 is no slouch and the possibilities are interesting. With Nokia’s vast resources, knowhow, patents, and intellectual property, surely something great can come of it. Microsoft’s excellent Bing search and Nokia’s top-drawer navigation software will make a good combination.

Playing catch-up is always tough. Android did a fabulous job taking on Apple, and I’m still amazed at how quickly it has passed Apple to become the number-one smart-phone OS. So it can be done. With Google updating Android on a continual basis, it will no doubt stay in the lead.

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