© pavelgr Analysis | September 03, 2013

Microsoft to Buy Nokia Mobile Business in $7 Billion Deal

In the post-PC world, and in the midst an ecosystem war, Microsoft has finally bought Nokia. This deal is less about the devices themselves, and more about the Windows Phone platform.
In order to have any relevance in this new era, Microsoft must develop a strong ecosystem - at 4% market share, it still has a long way to go. The acquisition enables Microsoft to re-double its efforts with Windows Phone, and use the Lumia brand to truly innovate with the platform.

Microsoft is now able to control the full user experience, which will help avoid OS fragmentation (as has been the case with Android) and make it easier to attract developers to the platform. Microsoft is also now much better placed to win back some of the enterprise customers it has lost as a result of BYOD and consumerisation. It is now able to offer a full portfolio of hardware, software and services to customers.

The question that arises from the acquisition is what Microsoft intends to do with the Windows Phone platform now that it owns an OEM. Its long history with partners suggests that it is unlikely follow Apple's lead and only allow its platform to be used on Nokia devices.

In order to grow market share, Microsoft will need to keep Samsung and HTC on board, and will need to alleviate any concerns that emerge as a result of the acquisition. Microsoft can use Nokia to really drive innovation on the platform, as Google is doing with Motorola. However, in order to succeed it will need to ensure it maintains good relationships with its partners.

Autthor: by Adrian Drozd, Research Director, ICT Europe


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