Microsoft and Nokia’s current smartphone business is so interdependent that many in the phone industry have joked that Microsoft should just buy Nokia.
Apparently that had occurred to Microsoft too, and negotiations had not only begun, but had reached an advanced stage, before collapsing – according to the Wall Street Journal.
But why would Microsoft want a phone company, seeing as they are a software shop?
Well Microsoft are desperate to make a splash in the mobile world, but although their OS is reviewing well, it’s not setting the world alight – especially with manufacturers. Nokia are THE driving force behind Windows Phone, and the few manufacturers that joined Nokia in launching Windows Phone 8 devices are fast disappearing – and there were hardly any to start with. Nokia account for the vast majority of Windows Phone devices and without Nokia, Windows Phone would be royally stuffed.
Although the relationship between Nokia and Microsoft is currently tight, that is largely due to Nokia’s current CEO being an ex-Microsoft man, and Nokia’s shareholders are starting to run out of patience. Elop had a very uncomfortable time at the last set of results with several big investors begging him to try Android. And that has left the company vulnerable to takeover – with Microsoft sensibly being the first to explore the option.
The problem is, what happens next?
Nokia’s imaging and mapping expertise make them an attractive target for other manufacturers and Microsoft’s negotiations failure has left Nokia exposed for a rival take over – with Huwaei being the first to try their luck.
And that must be terrifying for Microsoft – if another phone manufacturer, with a proven Android track record buys Nokia, it could spell the end of Windows Phone. Heck Nokia could even ended up being a target for Apple – something to improve Apple Maps, and can you imagine an iPhone with PureView tech in it?
I really hope it doesn’t come to that, as I’m a big fan of Windows Phone, and I would love to see it continue. Like Apple, Microsoft also have large piles of cash outside the US, which would cost them too much in tax to bring back to the US, so buying Nokia still makes a lot of sense.
Time for Microsoft to dig a bit deeper…
Source – Wall Street Journal (sorry it’s behind a paywall)