It is pretty desperate times over at Nokia which has lost significant amounts of its market cap Since new CEO Stephen Elop announced plummeting numbers for most of its Symbian Smartphones and dumbphone handsets earlier this week.  What does one expect when the CEO publicly executes its flagship Symbian product with nothing to replace it for almost a year?

The company is now worth $25B and Microsoft is said to be trying to by the mobile phone division for somewhere around $19B.  Nokia-Siemens and its other businesses would likely remain independent.

For Microsoft and Nokia, it seems like a pretty cozy deal.  Microsoft goes from building OSes to building experiences end to end, like Apple, RIM and HP.  Just like PlaysforSure->Zune

But what about Microsoft’s other partners in Windows Phone 7?  Samsung, who has created arguably the best WP7 device in the Focus, HTC who has a broad range of Windows Phone 7 devices, Acer and other players would be left out in the cold.  They won’t use WP7 when Microsoft is making hardware through its Nokia subsidy (again, just like Zune).  You can’t compete against the company that makes your software.

They’d all probably double down on Android at that point.  In fact, just reading the tea leaves now might have executives at those companies scaling back their Windows Phone 7 R&D.

A floundering Nokia tied up with Microsoft could be the best thing to happen to Android yet.

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