As the ink dries today on Microsoft's takeover of Nokia, the software giant will enter a new, innovative phase in which it will build an ecosystem to cater for future mobility needs; entering an era in which it will take on dominant Android.
Microsoft announced the unsurprising move to buy Nokia's device unit, for EUR5.44 billion, last September. The deal has been through several regulatory hurdles around the globe, including gaining local Competition Tribunal approval.
Today, it will be finalised. Writing on Microsoft's official blog, Brad Smith, executive VP of legal and corporate affairs at Microsoft, says wrapping up the deal "will mark a key step on the journey towards integration".
"This acquisition will help Microsoft accelerate innovation and market adoption for Windows Phones," notes Smith. "We look forward to the journey ahead."
Owning mobility
Swift Consulting CEO Liron Segev says today marks a big change for both companies, as the strong software player moves into mobile hardware. He anticipates Microsoft playing a bigger role in the mobile device game as it now owns the entire value chain. "Once the piece of paper is signed and the hammer drops, two separate companies will become one."
Segev explains Microsoft is taking its entire ship to the cloud, which will enable its mobility ambitions, and Nokia is an important part of the puzzle. He notes the software giant has been caught napping a few times - notably when it shrugged off the advent of the Internet - and is now setting itself up to avoid a similar situation in the future.
Microsoft is looking towards future trends and working backwards to make sure it can deliver, says Segev. The giant, which is currently breaking with its tradition and opening up to innovation, is setting itself up to develop an ecosystem that will see users being able to migrate across devices, using one platform, he adds.
Segev anticipates the new partnership taking on Android - currently top of the OS pops - over the next few years as "no one stays at the top for too long". He says people want innovation all the time, and if the pricing is right, and it offers seamless mobility, Microsoft will be a serious contender.
Challenges ahead
Gartner research director Annette Zimmermann says Microsoft faces several issues, including the challenge of now having five different brand names under one roof - Surface, Lumia, Asha, Microsoft and Nokia - that will have to be consolidated.
There will be overlap between Asha, Nokia X and - later this year - the lower-end Windows Phone 8 devices, says Zimmermann. She anticipates Microsoft dropping Asha at some point, and merging RT and Windows Phone 8.
Zimmermann says there could also be wearable devices on the product roadmap. However, it is more important to get Windows Phone 8 ready for wearables so developers can create apps, as most third-party wearables, like Fitbit, only work with iOS and Android, she notes.
In addition, says Zimmermann, the fact that Microsoft is now a hardware vendor has implications for other hardware vendors adopting the Windows Phone platform. "So far, over 90% of Windows Phone sales were generated by Nokia Lumia devices. I doubt this will change much in the future."
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