After many years of seeing Opera as a competitor in the browser space, Microsoft has signed a deal with the company to use its Opera Mini as the default browser for all of Nokia's feature phones.
Microsoft had a big wave of layoffs recently, with most of the cuts coming from Nokia's handset division, so it's likely that Microsoft also laid off most of the developers working on Nokia's feature phones, including those working on its in-house browser.
Microsoft doesn't want to invest much more than it has to in its feature phone line-up, but it will continue to support it for the time being in order to serve the large sub-$50 phone market.
It's clear that Microsoft's end goal is to have Nokia's entire lineup of phones use the Windows Phone OS, eventually. The only problem is that the hardware necessary to support Windows Phone hasn't gotten into the price range of the hardware that now runs Nokia's S40 or Asha.
Until that happens, Microsoft doesn't want to build Internet Explorer for these phones, or even keep supporting Nokia's custom browser, Xpress. Instead it's now licensing Opera Mini and completely outsourcing the browser to Opera. It seems Microsoft is in such a hurry to move its low-end phones to Opera Mini that it's not even going to wait for new phones to come out with it. The Xpress browser will soon be replaced by Opera Mini on the older phones, too.
As expected, Opera couldn't be happier with this deal:
“This is a great opportunity to spread the benefits of Opera Mini to millions more consumers in our core markets. There are still massive numbers of people who have not moved to smartphones, but Opera Mini can provide them with an amazing browsing experience right now," said Lars Boilesen, CEO of Opera, in a statement.
Opera Mini has been a great browser for low-end phones and in markets where data is not very affordable. The browser saves up to 90 percent of data by compressing all the traffic through Opera's own servers.
Opera may not be highly successful on the desktop or even on high-end smartphones, where Chrome and the built-in browsers dominate (respectively), but thanks to these feature phones it should still do well for the next few years. At the same time, Microsoft doesn't have to spend money developing a browser for a platform that's going to fade out eventually, so it looks like a win-win situation for both.