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Microsoft Buys Nokia Mobile for $7.2B – Marriage Made in Heaven?

Microsoft surprised the tech world by announcing the purchase of the Finland based mobile phone maker Nokia for $7.2B. Why Microsoft decided to slash that much cash for a successful but a struggling mobile phone manufacturer?

History

Microsoft teamed up with Nokia in 2011 to establish a presence in the smartphone market in the U.S that is still dominated by Apple, Samsung, and Google.

Nokia introduced the Nokia Lumia that was based on the window phone operated system made by Microsoft. Furthermore, Nokia was playing catch up to improve it’s smartphone business and place a foot before its too late with help from Microsoft. Microsoft also was looking to reinvent itself after the rapid decline of the PC business by trying to become a major player in the mobile phone business both in software and hardware.

Both Nokia and Microsoft lost few years of good planning to establish themselves in the smartphone revolution. Given that, Microsoft still the world’s biggest software company, however it’s mobile windows operating system only has 3.5% share in the smartphone business.The majority of smartphones are based on Apple iOS and Google Android. Nokia on the other hand lost it’s spot as the world’s biggest mobile phone maker to Samsung. However, Nokia is still in second place after Apple as the world’s second largest mobile phone maker. The majority of Nokia sales are outside of the U.S market, especially in Europe and the emerging markets of China, India, and Brazil and that is where Microsoft is planning to use Nokia to gain more market share.

The Competition is high to gain market share between Microsoft, Google, Samsung, and Apple.
The current winner of those giant corporations is Google. Google was quick to act to diversify it’s business model and not depend solely on search engine. The smartest move that Google made was the purchase of the Android operating system early in the game. Google capitalized on that purchase and made Android the world’s most popular smartphone operating system taking over Apple spot. Google then partnered with Samsung and the later built it’s flagship smartphone the Galaxy to be based on the Android operating system. Google then went and purchased Motorola mobile phone business and start making it’s own smartphones especially for it’s Android market.

Will Microsoft and Nokia succeed in establishing themselves in the smartphone market ?
Microsoft mobile operating system is not popular and it requires modification and enhancement to be able run smooth on the Nokia platform. Unless Nokia smartphones that run on window platform offer discounted prices, consumers will be less convinced to turn away from Android and Apple smartphones.

The Future

Microsoft and Nokia together will have a bumpy road ahead of them, but both companies joint venture have great potential to succeed in the mobile phone business, but not likely to dominate it any time soon. Microsoft greatest assets are it’s long software experience and the army of talented software engineers. Microsoft can mobilize it’s big assets to score major improvements to it’s mobile phone operating system. Furthermore, Microsoft has to improve and expand it’s mobile App community of developers to create more advanced and users friendly Apps. Expanding windows Apps incentive programs will help create popular Apps to attract more users. Nokia once was the largest mobile phone company and it is still has loyal customers who will continue to buy better Nokia phones. The majority of Nokia business is out side the U.S and Microsoft can use that advantage to expand sales as competition in those markets not as tough as it is in the U.S.

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Microsoft Buys Nokia Mobile for $7.2B – Marriage Made in Heaven?
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