Microsoft’s acquisition of Nokia’s Devices and Services a smart or stupid move?
Microsoft’s acquisition of Nokia’s Devices and Services business is billion dollar deals signed a bold step for transformation of new to old. Why the need arises is the question that comes in everybody mind? Let’s look at the reason why the acquisition needs to take place.
Nokia recent downfall
Nokia with a recent downfall in market has been a real concern for market entrepreneurs. With Nokia burning hundreds of million in cash in recent years was probably going to bankrupt in few years. With Microsoft acquisition it has saved its distribution and market.
Transformation or market loss
Microsoft was looking in for transformation to maintain its growth in current form. Microsoft has to choose a route to makes changes at its end so that it can regain its market. Microsoft is a software company that has number of obsolete products and is limited to Surface and Xbox. To accelerate it has to make suitable changes that can simply bring transformation and changes in current strategies.
Windows phones selling was below par
Windows operating system has failed to achieve traction comparable to Apple iOS or Google Android. Microsoft has to look in for changes and strategies that can make suitable changes in market. Nokia sells over 80% of Windows phones and collaborating with this giant will boast the selling of the phones. Nokia sells more windows phones than any other big brand in market. On other hand Microsoft wants to work with a third party hardware makers that can collaborate with them and can help build a quite reputation in the mobile market.
Logistics and manufacturing
Nokia has a wider change of supply chain management and is among the leading source of manufacturing phones. Microsoft has to improve on this front, with Nokia manufacturing capabilities it becomes easier for Microsoft to gain a big advantage against its market competitors.
Underlying hardware and software
Microsoft has been appreciated for its good operating system and Nokia for its hardware. Combining the tow giants together makes a pleasant combination that can rule globally. Microsoft is aiming in making large phones that can be globally accepted by customers over ones already sold out in market by big guns like Samsung, LG etc. With collaboration with Nokia it gives them a niche to improvise the current phones and sell them in market.
The purchase of Nokia phones is perfect for targeting billion of users all over the world. Microsoft purchase includes a ten-year license to use Nokia brand and it will easier for this big player to persuade people to buy windows phone in over next decade.