Microsoft Acquires Nokia’s Smartphones

By John Arkontaky
On Apr 29, 2014
Tuesday, April 29, 2014

Back in September, Microsoft announced its acquisition of Nokia’s mobile hardware assets. After months of dotting the i’s and crossing the t’s, Microsoft and Nokia finalized the acquisition to the tune of $7.5 billion. Under one roof, Microsoft’s new CEO, Satya Nadella, now has the tools in the shed to tightly integrate smartphone hardware with the Windows Phone operating system (OS).  

Though Microsoft hasn’t officially announced it yet, it appears that mobile phones will fall under the new brand Microsoft Mobile. Under the deal Microsoft absorbs Windows-based phones such as the Lumia as well as Android-based brands like Nokia X. How Microsoft handles an Android-based phone (and its user base) will be intriguing. With the recent Office for iPad and device-agnostic SCCM and Intune management platforms, Microsoft isn’t shy about supporting non-Windows devices. But, selling Android devices seems like a stretch, especially under the Microsoft Mobile brand.

We’ve seen Apple change the world with the iPhone’s integrated hardware and OS. We’ve also witness Google’s Android OS dig deep roots, but spin its wheels with its smartphones. Like iOS 7’s and Samsung Knox’s enterprise features, we expect to see Microsoft Mobile succeed by tightly integrating hardware, OS, and apps. 

Because Microsoft bought a license to use the Nokia brand for smartphones, expect Nokia-labeled phones for a while longer. But, Microsoft will phase out Nokia in the next year or so. During this shift, we expect Microsoft to attempt converting Nokia’s Android users to Windows Phone 8. However, with plenty of quality Android phones to choose from and Google Play’s stronger app market, Microsoft needs to pick its spots and ease customers into Windows Phone 8.

Nokia will retain its non-smartphone Nokia Solutions and Networks services, and reports indicate that Nokia can re-enter the mobile device manufacturing space in 2015. 

Smartphone manufacturer. Homebrewed mobile OS. Proprietary consumer and productivity apps. Microsoft and Apple sound a lot alike these days. With approximately 41% of organizations adopting Windows Phone 8, following in Apple’s footsteps (which has 95% saturation) isn’t a bad idea. With Nokia’s European popularity, Microsoft doesn’t need to do much to sell smartphones abroad—as long as Microsoft can retain Nokia’s customer base. The challenge, should Microsoft choose to take it (and we think they will), is grabbing market share in the U.S. The Surface tablet is already a capable enterprise tool, and we expect Microsoft Mobile smartphones to cater to business and consumer markets. 

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