As this Wired article says, nobody is surprised that Microsoft bought Nokia. Everyone sees it on the card when Nokia decided to go with Windows Operating System for its mobile phone relaunch. Although most people, including me, think it is a folly to go with something untested, but Elop’s (Nokia CEO) explanation on why he choose Windows do make business sense. Most, including me again, sees it as oiling the path for Microsoft to buy Nokia and we were proven right. I am pretty sure the same cloud agrees with me that going with Windows Operating System was Elop’s big gamble for Nokia that, if it had been successful, will pay back handsomely. I think nobody will know which was the priority, i.e., oiling the path to Microsoft or risk it all in hope of a big payback.
The big winner here is the Nokia CEO. Even bigger if he got picked to be Microsoft’s next CEO. That is a distinct possibility. A lot of people thinks he was Microsoft Trojan Horse to get Nokia when he left Microsoft for Nokia. If you subscribe to the opinion that his job was to oil the path the Microsoft than you will take Microsoft Nokia’s buy as the evidence to proof your case. I am not so sure. If I was Nokia’s CEO I would not had bet so heavily on Windows as my mobile operating system, but would had made the Microsoft buy my backup strategy. May be, just may be, going for Windows was the price to pay to have the backup strategy. If so, would I go for it? May be.
Will Microsoft benefit from buying Nokia? Technically yes. It gets mobile phone hardware expertise. Nokia’s is still very good in making good phone hardware, just pity about the software. Google bought Motorola Mobile Division for its expertise in making mobile phones. I am pretty sure Google figured out that to be a pure operating system company is difficult in the mobile business because you really need knowledge on the hardware and that is not something easy to do without getting one’s hand dirty on hardware. Microsoft obviously realized it. Belatedly? I do not think so. I think they thought their vast experience in designing PC software without dabbling in PC hardware will carry them through. To a certain extent, that is true. However, I believe the mobile phone is different from PC because there is practically no standardization on high end phones. Sure, they almost all use ARM architecture. However, that about said all for standardization. Break it up you can see that things you cannot exactly swap out one part of the system with another without doing a major software rewrite.
I still haven’t gone into the business part yet. I have no doubt Microsoft will use Nokia portfolio to beat down Android further. At least this time they have some solid muscle to back up their claim that Android “infringe” Microsoft Patent. Will they dare to sue Motorola Mobile, a.k.a. Google, now with this buy? I still doubt we will ever see this happening.
Setting aside the unsavory side of business practice, how about normal business?Good part is Microsoft is in a better position to understand the Mobile Phone market, something it fails to crack so far. Hopefully we start seeing good Windows Phone now. Its strategy of having a unify Operating system marrying servers, desktop, tablets and mobile has legs. No other companies, except puny Apple (who struggles in the servers market and whose aloofness means it is no threat at all) has such an advantage. If it can pull this off it can only be good for the company.
There is however one bad part of this purchase. Like Google when it bought Motorola Mobile, Microsoft is now in direct competition with its phone hardware partners. They are going to be worry that it is going to favour its Nokia subsidiary over them. So far, for Google, the anxiety is easing but is still lingering in the background. However, Google has the advantage that it does not have any history of favouring itself over competition. Microsoft, being at least double the age of Google, carries the burden of history and it does not bore well if you are it partner. However, in the next year we might see a change in the company, as the company bid farewall to its final old guards with Steve Ballmer departure. How exactly will the new management (Elop or not) behave is an unknown. What is not in doubt is it will be a new chapter for Microsoft. What does it means for you if you are a phone hardware manufacturer? Nobody knows. It will be interesting time.