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Microsoft's Nokia deal could benefit rival mobile device vendors, analysts say

Michael Kan | Sept. 4, 2013
Microsoft's moves into the hardware market have previously drawn opposition from its PC partners, but could help them.

But analysts argue that Microsoft will likely steer clear of the PC space with its Nokia acquisition, mainly because the handset vendor has no history of building tablets or laptops.

"I don't think this will have an impact on PC vendors, because they are still selling PCs, and Nokia does phones," said Tracy Tsai, an analyst with research firm Gartner. Instead, any tablet that Nokia developed would probably use the ARM-based Windows RT platform, and not the traditional Windows 8 OS, she added.

Already, PC vendors appear to be backing away from Windows RT. Acer has dropped plans to release a product using the OS, and Asus has called the platform "not very promising."

"I don't know if there will be a lot of competitors really upset about this," Chau said. "Almost all of the PC players don't seem to be upset about Windows RT nowadays."

Microsoft's new Windows 8 OS, however, has yet to take off. PC sales are instead partly declining due to the rise of tablets and smartphones. As a result, many PC vendors are releasing more mobile products using the rival Android OS as a way to continue growing.

It's still too early to say how Microsoft's plan to buy Nokia's handset business will shake out in the end, analysts added. But Microsoft has said the acquisition will help build momentum for the Windows Phone OS, in an effort to expand the operating system's presence. By 2018, Microsoft wants its Windows Phone OS to have a 15 percent market share, the company said in presentation slides posted on Tuesday.

A stronger Windows Phone OS, with better apps and developer support, could help make it a better alternative to Google's Android OS, analysts said. At the same time, it may help convince consumers to stick with Windows PCs and tablets.

"If you bring on board more users to Windows Phones, they will want to have a similar experience on their tablet and PC," Gartner's Tracy Tsai said. "This will be very helpful. Once you increase the install base, you will have more developers and more apps, and have a rich eco-system."


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