Can Microsoft succeed where Nokia failed?
An Interview with Professor S Ragunath
Is this a smart deal or a dodgy deal?
One of the most intriguing "what-ifs" of recent years has come true. The move unites Windows Phone 8 with its biggest hardware supporter, giving the company the integrated mobile offering it has been looking for. When the deal closes in the first quarter of 2014, Microsoft will pay €3.79 billion for Nokia's business, plus another €1.65 billion to license its portfolio of patents.
The purchase came at the fag end of a failed acquisition in June, at which point it seemed like a "no-go". Now the two have come together, in what outgoing Microsoft CEO Steve Ballmer called, "a bold step into the future".
Microsoft is a late entrant in the smartphone market looking for complementary assets. The decision of Microsoft to ink the deal primarily signals a move from being a mere software company to a software-plus-products company. They are considering a vertically integrated product. In some sense, it is that one opportunity in the mobile market space for Microsoft to expand control from software to hardware.
Nokia which is working on penetrating emerging markets is in dire need for financial resources. This deal is a way of going forward for Nokia. The good news for Microsoft is that Nokia adopted the Windows platform. If Microsoft did not step in, Nokia could have considered other alternatives. Microsoft, in a sense, has addressed the risk of Nokia moving on to another buyer.
For $7.2 billion, Microsoft has entered the category of "devices and services company". It gives Microsoft the kind of end-to-end control in mobile market space that only Apple and BlackBerry have enjoyed with varying degrees of success. But can Microsoft succeed where Nokia failed?
Having acquired Nokia, it will be interesting to see how much leeway is given to Nokia to develop new models and how Microsoft will keep the developer community interested. Nokia has shown a lot of interest in doing all of the above and now it is for Microsoft to keep that momentum on by providing resources. The sum and substance is that Nokia knew where they were heading but did not have the financial resources to get to where they wanted to be; then came along the knight in shining armor to help them stay in the game!
Will the Nokia transaction help MS fight the threat from Apple & Google? Combing two weak companies will you get a strong competitor?
Nokia remains a top seller of traditional mobile phones -- models that are more popular in developing markets. A driving force behind the sale seems to be Nokia's low-end Asha brand, which Microsoft has acquired outright. Asha gives Microsoft a far larger footprint for Windows Phone, and access to millions of customers in developing countr
Even combined, the companies - Nokia and Microsoft - have less than 4 percent of the smartphone market, leaving them far behind Apple and Google. Both Nokia and Microsoft really missed the boat in terms of smartphones, and it is extremely difficult to claw one's way back from that position. Apple and Google are far, far ahead but the important point is that Nokia can improve market share if it can improve sales and marketing; it needs Microsoft's support in emerging economies. Nokia has traditionally addressed the lower ends of the smartphone markets. Now Microsoft needs to support Nokia in its entry to new segments of the market.
If you look at the US, all the wireless carriers who are doing business with Apple & Google want the Microsoft-Nokia deal to succeed. They want to increase competition! They are thinking, 'let's get three of them going, otherwise two can get together and that could be a problem for us!'
People have said, 'why did Nokia ever choose Windows; they could have as well gone with Android', but if you were to look at the Android smartphone market and if you were to consider Samsung's performance, you need to really look around and see if anybody else is making any money with Android. I think that just because Nokia chose Microsoft's platform, I wouldn't say they have made a bad choice. Joining a celebrated crowd is no guarantee of making money!
Apple focused on what people want and integrated those functionalities - they never talk of features - in their phones while Nokia has always focused on features. So there has to be a rethink on marketing and a focus on integration.
The Finnish media is aghast - they believe Elop's job at Nokia was to destroy the company's market value so that Microsoft could pick it up for a song; why an acquisition now when MS already had a two-year alliance with Nokia in supply chain & distribution network?
I remember that Elop had likened Nokia's position to a man standing on a burning oil platform on the verge of being engulfed in flames, facing the option of staying aboard or jumping to the ocean to have a chance to survive! Really, Stephen did what he had to do - the deal will provide scale for Nokia.
The move is good for all the wireless operators because it will offer more competition. No one - LG, HTC, Samsung - has really shown interest in pushing the Microsoft platform. Nokia was really the one player left in the handset maker market and a desperate Microsoft found an opportunity to stay in the game. Actually, this is a good arena where competition is very strong and life, after the deal, will certainly be interesting to track. Microsoft by buying Nokia is effectively trying to destabilize the Symbian operating system. In February 2011, Elop had struck a deal with Ballmer to switch Nokia's smartphones from its own Symbian operating system to Windows Phone. In exchange, Microsoft spent more than $1 billion to pay for Nokia to market and develop products on Windows. Microsoft has done a smart thing by closing the deal.
(Interviewed by Kavitha K)
Can Microsoft succeed where Nokia failed?
An Interview with Professor S Ragunath
Is this a smart deal or a dodgy deal?
One of the most intriguing "what-ifs" of recent years has come true. The move unites Windows Phone 8 with its biggest hardware supporter, giving the company the integrated mobile offering it has been looking for. When the deal closes in the first quarter of 2014, Microsoft will pay €3.79 billion for Nokia's business, plus another €1.65 billion to license its portfolio of patents.
The purchase came at the fag end of a failed acquisition in June, at which point it seemed like a "no-go". Now the two have come together, in what outgoing Microsoft CEO Steve Ballmer called, "a bold step into the future".
Microsoft is a late entrant in the smartphone market looking for complementary assets. The decision of Microsoft to ink the deal primarily signals a move from being a mere software company to a software-plus-products company. They are considering a vertically integrated product. In some sense, it is that one opportunity in the mobile market space for Microsoft to expand control from software to hardware.
Nokia which is working on penetrating emerging markets is in dire need for financial resources. This deal is a way of going forward for Nokia. The good news for Microsoft is that Nokia adopted the Windows platform. If Microsoft did not step in, Nokia could have considered other alternatives. Microsoft, in a sense, has addressed the risk of Nokia moving on to another buyer.
For $7.2 billion, Microsoft has entered the category of "devices and services company". It gives Microsoft the kind of end-to-end control in mobile market space that only Apple and BlackBerry have enjoyed with varying degrees of success. But can Microsoft succeed where Nokia failed?
Having acquired Nokia, it will be interesting to see how much leeway is given to Nokia to develop new models and how Microsoft will keep the developer community interested. Nokia has shown a lot of interest in doing all of the above and now it is for Microsoft to keep that momentum on by providing resources. The sum and substance is that Nokia knew where they were heading but did not have the financial resources to get to where they wanted to be; then came along the knight in shining armor to help them stay in the game!
Will the Nokia transaction help MS fight the threat from Apple & Google? Combing two weak companies will you get a strong competitor?
Nokia remains a top seller of traditional mobile phones -- models that are more popular in developing markets. A driving force behind the sale seems to be Nokia's low-end Asha brand, which Microsoft has acquired outright. Asha gives Microsoft a far larger footprint for Windows Phone, and access to millions of customers in developing countr
Even combined, the companies - Nokia and Microsoft - have less than 4 percent of the smartphone market, leaving them far behind Apple and Google. Both Nokia and Microsoft really missed the boat in terms of smartphones, and it is extremely difficult to claw one's way back from that position. Apple and Google are far, far ahead but the important point is that Nokia can improve market share if it can improve sales and marketing; it needs Microsoft's support in emerging economies. Nokia has traditionally addressed the lower ends of the smartphone markets. Now Microsoft needs to support Nokia in its entry to new segments of the market.
If you look at the US, all the wireless carriers who are doing business with Apple & Google want the Microsoft-Nokia deal to succeed. They want to increase competition! They are thinking, 'let's get three of them going, otherwise two can get together and that could be a problem for us!'
People have said, 'why did Nokia ever choose Windows; they could have as well gone with Android', but if you were to look at the Android smartphone market and if you were to consider Samsung's performance, you need to really look around and see if anybody else is making any money with Android. I think that just because Nokia chose Microsoft's platform, I wouldn't say they have made a bad choice. Joining a celebrated crowd is no guarantee of making money!
Apple focused on what people want and integrated those functionalities - they never talk of features - in their phones while Nokia has always focused on features. So there has to be a rethink on marketing and a focus on integration.
The Finnish media is aghast - they believe Elop's job at Nokia was to destroy the company's market value so that Microsoft could pick it up for a song; why an acquisition now when MS already had a two-year alliance with Nokia in supply chain & distribution network?
I remember that Elop had likened Nokia's position to a man standing on a burning oil platform on the verge of being engulfed in flames, facing the option of staying aboard or jumping to the ocean to have a chance to survive! Really, Stephen did what he had to do - the deal will provide scale for Nokia.
The move is good for all the wireless operators because it will offer more competition. No one - LG, HTC, Samsung - has really shown interest in pushing the Microsoft platform. Nokia was really the one player left in the handset maker market and a desperate Microsoft found an opportunity to stay in the game. Actually, this is a good arena where competition is very strong and life, after the deal, will certainly be interesting to track. Microsoft by buying Nokia is effectively trying to destabilize the Symbian operating system. In February 2011, Elop had struck a deal with Ballmer to switch Nokia's smartphones from its own Symbian operating system to Windows Phone. In exchange, Microsoft spent more than $1 billion to pay for Nokia to market and develop products on Windows. Microsoft has done a smart thing by closing the deal.
(Interviewed by Kavitha K)