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Smartphone lull a golden opportunity for Microsoft

Mikael Ricknäs | April 28, 2014
Critics have derided Microsoft's US$7.5 billion acquisition of Nokia's Devices and Services business but the deal may be closing at the perfect moment -- during a slowdown in smartphone innovation.

For now, Sullivan doesn't want to comment on the future of X phones and feature phones. But for Windows Phone to succeed in the low end, Microsoft needs to lean on Nokia's know-how.

"Nokia has huge installed base of several hundred million units across Asia, Africa, Latin America and Eastern Europe that Microsoft can take advantage of," Mawston said.

"Nokia employees that today work on feature phones, particularly the Asha team, should be redeployed to drive down Windows Phone to lower price points," Wood said.

Even though Microsoft seems to be making a lot of good decisions, success is far from assured, according to Wood.

"There is still a big, big gap between where Android and iOS is and where Windows Phone is. But credit where credit is due, they are slowly but surely making progress," Wood said.

When Steve Ballmer announced the acquisition in the beginning of September last year, just after revealing he was stepping down as Microsoft CEO, he said:

"Today's announcement is a bold step into the future. For Microsoft it's a signature event — a signature event! — in our transformation. We think this is a win-win for employees; win-win for shareholders, and win-win for customers of both companies. Through our partnership we have already accomplished so much, and yet clearly the opportunity ahead is remarkable."

If all that turns out to be true, Ballmer will have a nice story line for his autobiography. But if not, the chapter on Microsoft in the 21st century may not end well.


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