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  • Microsoft Buys Nokia.. Who Next?

    by User Not Found | 9月 04, 2013

    Many people on the planet now know that Microsoft has agreed to buy Nokia’s phone business plus access to Nokia’s IPR and HERE platform.  Details abound online.  But so what?

    Overall, I’d say it’s welcome though sad news for Nokia, as Nokia is now assured of survival and escapes acquisition from companies like, say, Lenovo. For Microsoft it’s a step in the right direction but simply too small, too late.  What Microsoft needs is to buy more companies, in my opinion.  

    For smartphones, HTC and Blackberry are obvious candidates: HTC as a former close ally with Microsoft; Blackberry is strong in Enterprise.  There may be others.

    For tablets.. it’s tablets that most threaten Microsoft’s core traditional business in PCs and Windows OS.  So Microsoft needs to do something major in improving its tablet business.  This will likely be via Nokia, which also needs tablets and which can leverage its device capabilities (design, distribution, brand, etc) to boost Microsoft’s tablet volumes and help Microsoft recover in Windows OS.  

    Even more than that, Microsoft needs to do something dramatic to improve Windows 8 and the resulting tablet devices running on Windows 8.  That could include acquisition of software companies, working closely with Nokia and Microsoft.

    Key points are captured below.

    The acquisition is no surprise.  When Lenovo suggested it could be interested in buying Nokia, GFP Intelligence Report suggested that this might push Microsoft into buying Nokia.  It is perhaps the end-game in the appointment of Elop to Nokia and Nokia’s adoption of Windows Phone OS.

    The benefits for Nokia are that it gains financial strength and access to Microsoft software.  Microsoft may now become more serious about developing Windows 8 as a serious rival to iOS and Android, and improve its OS.

    The negatives for Nokia are that Microsoft has a poor record in hardware businesses and may be a poor owner of Nokia; and Microsoft is as blogged by GFP in ‘transition’ (partial chaos) at the moment, with top managers even fighting to replace Steve Ballmer after his resignation notice.

    The positives for Microsoft are firstly that no other company can now buy Nokia and cut off Microsoft’s primary channel to the smartphone and Windows Phone OS market – which would have been disastrous.  Secondly, tighter control of Nokia will potentially benefit its ambition in ‘devices and services’, across smartphones and mapping.  Its access to IPR will also be very helpful against competitors like Google, both defensively and offensively.  Microsoft will be more able to attack Google over IPR, and damage Google in areas such as Android and in intended HTML5 development.

    The negatives for Microsoft include that Nokia is now a marginal player in smartphones and has only smartphones in its portfolio (no other consumer devices).  Therefore Microsoft may follow up with another acquisition in order to boost its scale in mobile – HTC (previous close partner) or Blackberry (strong in enterprise) seem possible candidates.


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