Nokia Corporation (NYSE:NOK) has everything riding on the success of Windows Phone 8

For Nokia Corporation (ADR)(NYSE:NOK), Microsoft's Windows Phone 8 is its lifeline. It has pinned all its hopes on the new operating software from the Redmond-based software giant.

If the combination works, it means that Nokia is back in business. If not, it will set back the company by several years.

Nokia lost its position as the largest manufacturer of mobile phones, after 14 years, earlier this year to Samsung, which along with Google's Android operating software, has streaked ahead leaving the rest of the competition behind.

Apple with its proprietary operating system iOS has its own unique niche in the segment. In fact the company can be credited with revolutionising the smartphone market and providing a benchmark for others to follow.

Nokia was somehow unable to keep up with Apple in terms of innovation, design or imagination and it took just a few years for the company to lose its position at the top. Now it is playing catch-up.

On Friday, research firm IDC said that in the July-to-September period, Nokia slid for the first time off the list of the top five smartphone makers in the world. It's still the second-largest maker of phones overall, but sales of non-smartphones are shrinking across the industry, and there's little profit there.

Nokia CEO Stephen Elop has made it clear that the revival of the company's fortune hinges on Windows Phone 8. Microsoft is scheduled to launch the new operating system on Monday along with the new phones from Nokia, HTC and Samsung.

The first line-up of Nokia phones last year, running on Windows Mango have not been much of a success. The upgraded version of the software is expected to have better success, as it has been made with the new generation of smartphones in mind.