Purchasing—Another Way of Innovation

Within a year, several important things happened to Nokia. By the end of 2012, Nokia decided to sell its head office to raise funds for the development of new products. On the September the 3rd, Microsoft announced to purchase Nokia’s phone business for approximately $7.2 billion.

Nokia did not manage to seize the opportunity of capturing the smartphone market. As increasing more  people chose to buy smartphones, Nokia realized that they had to change their strategy. Although Lumia Series contributed to the sales, Google’s Android and Apple’s iOS made up about 90 percent of the market. Under this situation, both Nokia and Microsoft need an approach to increasing the market share.

The purchase can bring benefits to both of them. For Nokia, enough funds can be obtained for developing new products ,and for Microsoft, it can improve the market share of Windows Phone. Since Microsoft has joined Nokia in 2010, the running-in period will be shorter.

Reference:

http://www.economist.com/blogs/schumpeter/2013/09/microsoft-and-nokia?zid=292&ah=165a5788fdb0726c01b1374d8e1ea285

http://www.reuters.com/article/2013/09/03/us-microsoft-nokia-idUSBRE98202V20130903

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