Microsoft and Mobile- Was the Nokia acquisition a wise investment
There’s an obvious reason why Microsoft acquired the Nokia and that is part of its new strategy to be a devices and services company. Microsoft attempted to enter the consumer markets for a long time already, with brands like Xbox, Zune, Kin, Surface, Kinect, etc. Some of those failed miserably, but some made a huge impact on the industry, and are taking things to the next level for the consumer, like Kinect. Also, shortly after the deal, Microsoft sees increased profit from sales of the Nokia Windows Phone.
But there have been plenty other reasons, which can shed light to this acquisition. First of all, there have been rumors for roughly a year, of Microsoft doing their own prototype Surface phones. That would make sense in case the Nokia acquisition would have failed. Another major factor has been an uneasy tone in the Nokia/Microsoft relationship. Both sides seem to have been hiding information from each other and weren’t always working together. That has led to the situation where both parties had a different focus when it should have been the same. There have also been transactional costs when two separate entities had been doing the same thing, which this deal puts now aside.
All this together meant that the Windows Phone was not getting the focused commitment it deserved to break big. Nokia didn’t have the capability for required big investments to make an impact on mobile markets. With Microsoft, that’s going to change. People working closely with Nokia have seen the heavy cuts and other areas as well for several years.