THE marriage announced this month between Nokia Oyj and Microsoft Corp has raised eyebrows in the information technology industry. Some analysts bet the new partnership won't be strong enough to take on Apple Inc and Google Inc in the smartphone market.

In my opinion, that's an overly pessimistic assessment.

It's true that Nokia and Microsoft face some serious challenges in what is a highly competitive market, but they do have corporate strengths to pit against Apple's iPhone and phones using the Google's Android system. Those strengths are particularly obvious in China, the world's biggest mobile market.

Microsoft and Nokia announced two weeks ago a partnership in which Windows Phone 7 software will replace Nokia's Symbian platform on the Finnish company's new smartphones. The Nokia-branded Windows phones are expected to be available next year, according to Jorma Ollila, Nokia's board chairman.

But investors poured cold water on the announcement as Nokia's share price plummeted 14 percent to 7 euros (US$9.52) after the news.

A Google executive's Twitter web page comment received widespread attention: "Two turkeys do not make an eagle." Other industry commentators said it was regretful the partnership is turning the world's largest cellphone maker into a pure hardware player.

But I tend to agree with those analysts who have noted that it was time for market leader Nokia to change direction as its share of the smartphone market was slowly being eroded by Apple and Google.

"This is a bold decision by Nokia but absolutely the right one, both for itself and for Microsoft, given the drastically changed landscape for smartphones in the past couple of years," said Tony Cripps, a principal analyst at research firm Ovum.

Nokia is still the biggest handset maker, but the market share for its Symbian phones has tumbled from 41 percent in 2008 to 31 percent at the end of 2010. In the same period, Apple's iOS and Google's Android have each gained a market share of 20 percent from just single-digits only two years ago.

Nokia really had few short-term options to recapture its dominance in the face of competition from Apple and, especially, from the increasing number of smartphones using Google's Android, which looks set to overtake Nokia in terms of smartphone shipments in 2011, Ovum said. Investors who may not be happy with the Nokia-Microsoft linkup would be a lot unhappier if Nokia just stayed on its same own solo path.

By taking risks and accepting challenges, Nokia and Microsoft have the potential to succeed.

Many people have underestimated three critical factors: the demand for data-sharing between personal computers and phones, the real quality of Microsoft's Windows Phone 7 (WP7) system, and Nokia's market influence and localization in the Chinese market.

Let us pause and consider the three elements.

1. PC and phone compatibility

We all know that sharing data between PCs and handsets is still a headache, whether you use a BlackBerry, an iPhone or an Android device.

Relatively speaking, RIM's BlackBerry services offer a better user experience among all current models, but BlackBerry's niche in the China market has been confined mainly to business executives, not the mass market.

At the same time, iPhone's synchronized service MobileMe is impressive, but it's not available in China at all. Yes, you can use Google Docs and Gmail accounts to synchronize between your PC and Android phones, but those channels can be a nightmare because of the serch giant's unstable servers in China.

In contrast, High-end Symbian models like the Nokia E7, released last week, allows users to easily exchange data through Microsoft's Exchange and Office suites.

We have enough reasons to expect huge improvements in data sharing and compatibility between PCs and phones after the marriage between the world's biggest handset maker and the world's biggest software vendor.

At least, both PCs and phones can work with Office on Windows. Just imagine it!

2. The performance of Windows Phone 7

I believe many people are turning up their noses at the new partnership because they think the new WP7 system for handsets is just like its predecessor Windows Mobile, a slow and complicated system with high memory and huge power consumption.

Actually, Microsoft was one of the earliest firms to invest in a handset operating system. But the unsuccessful Windows Mobile system prompted partners like HTC and Motorola to focus on Google's Android.

The new WP7 system is still relatively untested by consumers. It's easy to understand why some people might transfer negative feelings about Windows Mobile to the WP7. Some people even still confuse the two when expressing opinions about WP7 on social networking sites.

It's a pity that I haven't had the opportunity to test the WP7 phone, but I have talked extensively to people who have.

"WP7 has impressive multi-touch functions, even the same or better than iPhone's," said Cai Zhe, a handset industry veteran who used to work for IT website PCHome for several years.

James Chu, chairman and chief executive of ViewSonic, also highly praised the display technology of Windows phones.

"It's a revolutionary technology that allows users to display images and videos in several screens from a single device," Chu said.

And don't forget about Microsoft's media player Zune, and game console XBox and its hot accessory Kinect. It's said that the WP7 phone will be part of XBox games and compatible with Kinect. The partnership with Microsoft will help Nokia catch up with Apple and Google in the online application sector.

Entertainment occupies a key position in the online application market because more than 70 percent of such apps are games. In Apple's App Store, eight or even nine of the top 10 apps are always games, like Angry Birds.

3. Nokia's advantage and localization

So the question is: What's the difference between Nokia and other Microsoft Windows Phone 7 partners?

To be frank, the huge volume and market share of Nokia tilt the new partnership a little toward Microsoft's benefit.

Nokia will no doubt become Microsoft's most important partner and this will allow it to get support and resources from Microsoft, including Microsoft paying billions of dollars to Nokia for using WP7.

Meanwhile, Nokia has one of the world's best map services, Ovi Maps, which will be included in Microsoft's WP7 ecosystem standard map service. It will earn Nokia a long-term income if other vendors use the service.

The Ovi Maps, which Nokia owns after acquiring it from Navteq for US$8.1 billion in 2007, is as good as Google Maps. I think they are the two world's best map services. It was one of the key reasons why Nokia didn't choose Google's Android; they have competing map services and neither was willing to relinquish its own service.

In China, Nokia has sold 250 million phones, established a national distribution channel and built a cozy relationship with the two top mobile operators, China Mobile and China Unicom.

Nokia and China Mobile have established the MM-Ovi Store, the only overseas player store allowing people to pay for apps through mobile bills. Other application stores, including Apple's App Store, require users to purchase apps with credit cards - not the preferred payment channel for Chinese consumers.

It's one example of how Nokia has localized its services in China, and that also will help the Finnish-based firm shift from Symbian to Windows.

Obviously, any new partnership faces uncertainty and possible pitfalls, especially when it's in the position of having to play catch-up.

"Two bicycle makers from Dayton, Ohio, one day decided to fly," said Nokia chief executive Stephen Elop, replying to the "two turkeys" jibe with an allusion to the Wright Brothers.

Still, before taking flight, Nokia and Microsoft have a long way to flap their wings.