Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

With this phone, I thee wed: How the Nokia-Microsoft union changes everything

Brad Chacos | April 28, 2014
There's no getting cold feet now. On Friday, Microsoft's acquisition of Nokia's device business will be official, after months of delays and regulatory hurdles. The remnants of Nokia will get a whopping $7.2 billion. In return, Microsoft will get 32,000 new employees, a legion of Lumias, and oh yeah, those funky Android-based Nokia X phones.

If you want to hear more about the topic, be sure to check out Mark Hachman's take on How to make Microsoft great again, one Nokia phone at a time. It's righteous.

Fewer hardware mishaps from Microsoft

Nokia's supply chain management is a force to be reckoned with, honed by decades of experience in pumping out hardware. Microsoft's been hawking Surface tablets for less than two years, and often overproducing or underproducing the slates in that time frame. Nokia's vendor gurus could help even out the supply side of the Surface's supply-and-demand equation.

A stay of execution for the Nokia X

At first blush, the Nokia X's very existence seems to scream "KILL ME, KILL ME NOW" with the company in Microsoft's hands. It is running Android, after all. Sacrilege!

But maybe it isn't. Remember: Microsoft has reimagined itself as a device and services company now. The Nokia X is an affordable device with mass appeal, and it just so happens to be chock-full of Microsoftian services like Skype, Outlook.com, and OneDrive, rather than the usual Google apps. The low-cost line could be used to replace Nokia's aging Asha OS with something that spurs widespread Microsoft service adoption in developing countries and offers an easy migration path to full-fledged Windows Phones down the line.

Yes, Nokia's fake Windows Phone could bolster the real one. While Microsoft hasn't exactly been enthusiastic about the Nokia X, it hasn't been belligerent either. Microsoft VP of corporate communications Frank Shaw went so far as to state that "this provides the opportunity to bring millions of people, particularly in growth markets, into the Microsoft family" via the bundled services.

Expect Microsoft to tolerate the Nokia X's existence... for now.

Nothing new whatsoever?

Yes, nothing at all. Stay the course, carry on, nothing to see here, folks.

Why would Microsoft spend a ludicrous $7.2 billion on Nokia to invoke no changes at all? Because perhaps Nokia wasn't a strategic acquisition, or a necessary investment in a grand unified hardware plan.Maybe it was a desperate move.

Remember, Windows Phone has had trouble wooing new users into the fold. Just before Microsoft announced the acquisition, Nokia was hemorrhaging cash and market share despite controlling such a big slice of the Windows Phone market. Rumors of a Nokian defection to Android were swirling on a daily basis (and soon proven true with the Nokia X). With its back against the wall and its staunchest ally making eyes at the competition, Microsoft's then-CEO Steve Ballmer might have felt forced to act, lest Microsoft lose control of the Windows Phone story entirely.

The Nokia purchase certainly seemed to have occurred out of the blue, shortly after Microsoft announced a sweeping reorganization and Ballmer himself announced his retirement. Engulfing Nokia's 32,000-strong workforce into the Microsoft ranks is a mighty big thing to dump onto the shoulders of new CEO Satya Nadella — unless it absolutely, positively had to happen.

 

Previous Page  1  2  3  4  Next Page 

Sign up for Computerworld eNewsletters.