Microsoft Corp on Tuesday said it will buy Nokia’s mobile phone business for 5.44 billion euros ($7.2 billion).
Reuters – http://www.reuters.com/article/2013/09/03/us-microsoft-nokia-idUSBRE98202V20130903
Nokia, once the worlds largest vendor of mobile phones, has slipped to the tenth largest. After Nokia replaced their Symbian OS in all their phones with Windows in February 2011, their sales decreased dramatically.
If Microsoft has any edge that they can combine with Nokia to help them revive their mobile business, it is their entrenchment in corporations with their server operating systems and Microsoft Office. However, their once iron grip on the business software market is now threatened by cloud players, Amazon and Google.
Microsoft’s responded to these new threats, with Azure and Office 365. Many have criticized Microsoft for being slow to respond to the change in market forces created by the Internet. Out maneuvered, going all the way back to the browser wars with Netscape, they have relied on their three cash cows – Windows, Office, and Server systems – to keep them on top as a technology powerhouse, if not a leader.
Microsoft never obtained serious market share with their mobile phone operating system, but kept a toehold in the market by their integration capability with Microsoft Exchange Email Systems, widely used by businesses from small companies to large corporations. Smartphones by Apple, Samsung and other Android systems overwhelmed them. Their late entrance into the tablet market with their Surface tablet was executed poorly and their Surface RT was a dramatic failure.
Stymied by the innovator’s dilemma, Microsoft is trying to shake things up with a change of leadership in the replacement of Steve Ballmer as CEO. Their purchase of Nokia gives them a device manufacturing capability they have never had before. It will position them to compete more effectively with Google and Google’s new device manufacturing prowess since their acquisition of Motorola.
Nokia’s CEO, Stephen Elop, once the head of Microsoft’s business software division, would now seem to be the odds on favorite to be named Microsoft’s new CEO. Some think machinations and plans were in place for just such a merger, when Elop joined Nokia in September, 2010. Microsoft’s future will depend upon how well they can assimilate a large hardware manufacturer with their software business.
Do you think it is too late for Microsoft to become a serious competitor in mobile technology?
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