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Crawl, Walk, Run: Microsoft’s Nokia Acquisition

NokiaLumia925 01 PageIt started as a first date in February 2011 when Microsoft made a small strategic investment in Nokia. Here is how it ended: Microsoft got married over the weekend to Nokia’s Devices and Services unit for a dowry of $7.2 billion. That price includes $2 billion for patents. On paper, it makes perfect sense. But for every action, there is a reaction.

Perfect Sense. Microsoft needs to “do something” now! So becoming more Apple-like by the day, with its vertical integration strategy, makes great sense on paper. This worked for Standard Oil and, again, Apple. Microsoft will be able to ensure the quality of the mobile phone running Windows 8.x by controlling the production. And, I like the risk-taking. With Ballmer announcing his retirement, why not place a few big bets on the way out the door. The next guy will certainly be very conservative the first years on the job, so now is the time to run the table. A Pocket MBA moment: New leaders don’t take risks when starting a leadership position = do not make mistakes!


Reactions. Where and how does this impact the mobility sector? I’d offer that Samsung could feel stung a bit today. It’s going to be hard to stay excited about Microsoft’s Windows 8 phone and may double-down on the Android models where it makes its money (in fact, CNBC is reporting that Samsung is the “only one” making money in the Android mobile market). I’d offer that BlackBerry is also a loser today with mighty Microsoft ready to elevate Nokia’s mobile business, and further crowding out BlackBerry. I’d expect Apple, in its ongoing arrogance campaign, to simply utter: MEH?

Stay tuned for more updates this week. In the meantime, you can learn more about the acquisition details here.

 

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Friday, 15 December 2017