This has been forthcoming for the longest time, ever since Microsoft sent a loaner to become CEO ala Stephen Elop, speculation was rife in the mobile world. Now this has finally come into fruition. Many speculated that Microsoft had been keen to make Nokia small enough to acquire, while at the same time utilizing the well structured Nokia marketing and distribution structure to awaken it’s awfully bad mobile business.
Well, Nokia will go under Redmond for a figure of around 5.44 billion Euros spread out in 3.79 Billion Euro for the devices and services business and EUR 1.65 Billion to license Nokia Patents.
In this acquisition, Nokia services like camera software, mapping and all patents will belong to Microsoft, even the Pureview technology. One begs to question what will become of the feature phone business, Microsoft has never been big on the low end and has been struggling to appeal to these. The cheapest Windows phone is currently selling at $182 while the droids have gone as low as $45, the tablets tell an even interesting story.
Nokia has been the leader in Windows Phone business with other players barely making a mere 20% together. This goes to show that with the steady growth Windows Phone has been doing to get back to third position in the smartphones business and ousting Blackberry while at it, Nokia has managed to do what Microsoft has been trying to achieve over the last 13 years. Windows phone is doing badly in Microsoft’s backyard in the US, but in Finland and Mexico it manages some growth with 12% in Mexico.
Microsoft will be completing the acquisition in Q1 of 2014 after Nokia has finally taken Microsoft back to the mobile business course with Nokia currently doing over 80% market-share in Windows Phone.
What would this mean to other OEM players in Windows Phone?
HTC is said to be edging it’s way out of the Windows Phone business with lackluster sales and focus on Android which requires much resources in the marketing and distribution section, Samsung has never been big on Windows phone, only selling the ATIV smartphone in select high end markets, LG is usually on and off there while Huawei just put some small resources in Windows phone, but with most of its leg into Android looking out.
All in all, the winner here is Microsoft who stand to gain from Nokia’s Marketing and distribution, feature phones business, the Asha is one that we cannot predict at the moment while Nokia as a brand might just be swallowed and Stephen Elop could be the hero of the day for Redmond.