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BLOG: Microsoft paid $7.4 billion for Nokia and all they get is a cheap Android phone?

Preston Gralla | Feb. 13, 2014
Numerous sources report that the unthinkable is true: Nokia will be releasing an Android phone. Is this what Microsoft gets for paying $7.4 billion for Nokia's handset business?

In addition, the Nokia Android phone won't come with the usual Google services baked into it. The Wall Street Journal reports that it won't be able to access the Google Play app store. The phone will also have Nokia's Here maps instead of Google Maps. No other details are available, but don't be surprised if after Microsoft takes over, instead of Google Search, Bing becomes the default search on the phone, and the default email service instead of Gmail. As Carolina Milanesi, an analyst at Kantar WorldPanel, told Computerworld:

"Whatever Nokia is doing, you can bet it will not lead back to Google when it comes to the Google ecosystem. It's yet another vendor using Android, but not helping Google monetize Android or drive ecosystem stickiness."

Theoretically, then, Microsoft could gain revenue from the sale of Android devices in emerging markets by people's use of its services, such as Bing, mapping, and email.

Beyond that, Microsoft and Nokia will likely use the low-end device as a kind of gateway to Windows Phone. Emerging markets will be giving birth to massive numbers of people moving up the economic chain, and if they're loyal Nokia customers, Nokia will try to move them to Windows Phone once they can afford it.

The Journal quotes Steve Ballmer as saying back in September that low-cost phones:

"...are often the first connection with technology that people in many places in the world have with any kind of communications or information technology device. We look at that as an excellent feeder system."

Of course, if Microsoft had a version of Windows Phone that could power inexpensive handsets, all this would be moot. But it doesn't. So by releasing a low-cost Android phone, Microsoft and Nokia may be trying to make the best of an all-around bad situation.

Source: Computerworld


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