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Microsoft’s Buyout of Nokia Still Leaves Key Questions Unanswered

What win-win leverage was Microsoft looking for in Nokia?

What win-win leverage was Microsoft looking for in Nokia?

On its surface, Microsoft’s acquisition of Nokia’s cell phone business makes a lot of sense. There is a good argument to be made that this could be a win win situation. Microsoft buys Nokia’s patents and technology base so it can gain the technology it needs to convincingly become a hardware market in the mobile market. On the other end of the ledger, Nokia gets to exit a market where it’s really beaten up. Nokia used to be the eight hundred pound gorilla in the mobile phone market and it just dominated that industry. It took on and beat Motorola. That’s how awesome Nokia was. It’s really hard to say no to a manufacturer that can make a highly sophisticated piece of technology and reduce its size and make it their chip.

Unfortunately, with the rise of iPhones and smart phones, Nokia couldn’t compete because its main forte is cell phones and the rise of iPhones, smart phones and more importantly the rise of Google Android shifted the phone market from cheap cell phones to smart mobile phones which are increasingly affordable. It’s just a matter of time until people from all four corners of the globe can own a smart mobile phone because the phone is not centered on the price of the hardware but on the free price of the highly sophisticated and powerful software that runs on the hardware. This is the real problem that Microsoft needs to solve.

By buying out Nokia for its software technology, it doesn’t really solve the problem because the problem is not the hardware but the software. The Microsoft Windows phone is all about Windows, fixed software, and Microsoft’s design aesthetic for the software. In other words, it’s all about Microsoft. If we all agree that Windows phone isn’t really making much headway and didn’t really succeed in the smart phone market then it follows that its lack of success is due to Window’s in and of itself. Buying a hardware company doesn’t really fix the problem with the software and the key here is whether the Windows phone can get enough third party app developers to code for this platform before they code for IOS and Android. Unfortunately, this doesn’t look like it’s going to happen anytime soon. When you look at the different flavors of apps out there, most app developers would code for Android first, the IOS second and maybe the Windows phone platform.

Unless, Microsoft figures out a way to reverse that coding schedule, it’s going to remain a perennial third party also ran in this market. Unfortunately, this market is all about volume and market share and it has probably reached the point where coders don’t really seem much of a commercial benefit to code in for the Windows phone. Without a massive and distinctive array of apps coded for its platform, windows smart phone future looks quite bline indeed. Sadly, its recent multibillion dollar purchase of Nokia doesn’t solve this problem.

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