Microsoft Makes Moves on The Mobile Device Industry
In case you were unsure about Microsoft’s commitment to the mobile device market, the announcement of a $7.2 acquisition of the Nokia Devices and Services Unit should assuage any remaining doubts. Microsoft appears to be trying to vertically integrate its mobile devices, and claim a larger share of the market for smartphones.
Late on September 2nd, Microsoft announced that it will pay $5 billion for most of Nokia’s phone unit, and another $2.2 billion to license its patents. Part of this deal includes licensing the company’s mapping services.
This announcement comes less than two weeks after Microsoft CEO Steve Ballmer announced his retirement and the appointment of a new CEO within the next 12 months. News of Ballmer’s retirement prompted speculation among the IT world about what new directions Microsoft would be taking. Given how Microsoft has struggled with the transition to a world dominated by mobile devices, this movement into hardware could indicate a new, more successful, approach to the market.
Nokia and Microsoft have been close partners since 2011, when Nokia agreed to focus on manufacturing the Windows Phone platform. Up until now, Microsoft left the production of hardware to partners like Nokia. By purchasing Nokia Devices and Services, however, Microsoft appears to be changing its strategy with regards to mobile devices. The acquisition suggests that Microsoft needs more direct control of handset manufacturing to succeed in the mobile device and smartphone market.
This vertical integration is a very new direction for Microsoft. Unlike Apple, which controlled both the hardware and software aspects of its mobile devices, Microsoft originally maintained a software philosophy that encouraged Windows to spread across a variety of smartphones. The acquisition of Nokia suggest a more holistic, vertical approach to the smartphone and mobile device market.
As part of the acquisition, Nokia CEO Stephen Elop will leave Nokia and become the Executive Vice President of Microsoft’s Devices and Services division. This is not Elop’s first tenure at Microsoft; he was the president of the Microsoft Business Division before he left for Nokia in 2010. Given Elop’s experience, he is a favorite of the candidates suggested to replace Ballmer when he retires.
You can read more on the story at the New York Times.
CyberStreams Inc., a premire IT Consulting Company located in Microsoft’s backyard, has over 10 years of experience in business IT. For more information on mobile device management and how mobile devices impact your company’s IT, contact CyberStreams today.