On April 25th, 2014, Microsoft completed the U.S dollar 7.5 billion acquisition of Nokia. Nokia’s phone and tablet service would run as a separate division of the Microsoft Corporation called Devices Group, Microsoft Mobile.
Nokia was almost bankrupt due to the intense competition within mobile phone market. It was once the biggest mobile phone producer in the world, an absolute leader in the market. When Apple released its first iPhone in 2007, everything dramatically changed. Nokia was slow to adapt to the new generation of smart phone, which features the quality of sensitive touchscreen and application (“app”) store. Other manufactures such as Samsung and HTC using Android system, a sensitive touchscreen display that provides an efficient, convenient and stabilized mobile phone operating system. Though Nokia later tried to use the Windows mobile phone system for its top-tier products, but was still hard to compete with three dominant smartphones, Apple, Samsung and HTC.
In my opinion, this acquisition is beneficial for Microsoft, but it has uncertainty. First of all, this acquisition gives Microsoft access to hardware technology and access to Nokia’s distribution network. In the other words, it assistsMicrosoft to accelerate innovation and market adoption for Windows Phones and attracts billions of customers by integrating Microsoft services with Nokia mobile phones.
In addition, this acquisition gives Microsoft the opportunity to expand its product to the business users. Apple and Google’s Android dominate the consumer mobile devices market today. iPads and Android tablets tend to get used mainly for entertainment, but for business users they have limited business value. Therefore, combining Nokia and Microsoft devices have the potential for a stronger offering for the business market.
Last, this acquisition also has uncertainty.The completion of this acquisition is just a key step on the journey towards integration. Google had acquired Motorola with a similar intention and then sold it off recently.
Work Cited:
Kovach, Steve. “Microsoft Closes Its $7.2 Billion Purchase Of Nokia”. 25 April 2014. Business Insider. 5 October 2014.
http://www.businessinsider.com/microsoft-closes-nokia-acquisition-2014-4
Cambell, Anita. 4 September 2014. Small Business Trends. 5 October 2014.
http://smallbiztrends.com/2013/09/microsoft-nokia-acquisition.html
Molina, Brett. “Microsoft to close Nokia deal on Friday “. 21 April 2014. USA Today. 5 October 2014.
http://www.usatoday.com/story/tech/2014/04/21/microsoft-nokia-deal/7969279/
Imaged Cited:
Cambell, Anita. 4 September 2014. Small Business Trends. 5 October 2014.
http://smallbiztrends.com/2013/09/microsoft-nokia-acquisition.html