Microsoft Says Nokia Deal to Close Friday. Will This Drive its OEM Partners Away?
After months of planning and waiting, Microsoft has finally announced the closing date for its deal to acquire the devices and services division of its biggest smartphone partner, Nokia. According to a post on the Official Microsoft Blog, the deal will close this Friday, and Microsoft will own its own handset maker, potentially ushering in a new age of synergy in terms of software and hardware design—and potentially alienating other OEMs who may not feel like making Windows Phones anymore.
According to the post, the closing date is officially set for April 25, and a few details have been revealed, though none of them are particularly earth-shattering. Microsoft will manage Nokia.com for the next year, and “21 employees in China working on mobile phones will join Microsoft and continue their work.” Additionally, a Korean factory owned by Nokia is no longer going to be acquired under the deal, though the post doesn’t offer any information about the significance of the factory or why it’s been left out.
So now that the path has finally been cleared to allow these two companies to come together under one corporate banner, what’s the end result? As alluded to earlier, Microsoft will now have a dedicated smartphone maker in the fold. The addition of Nokia will allow for a more tightly controlled design of Windows Phone hardware and software, meaning that in a year or so, the fruits of this union might be worth taking a very close look at. Apple’s had plenty of success with making its own smartphones running its proprietary mobile OS. There’s no reason why Microsoft shouldn’t be able to at least shoot for the same outcome.
Moreover, Microsoft has had lots of success in this arena before, though not in the smartphone space. Evidence of that can be found sitting under your TV: the Xbox and its branded descendants are a joint union of Microsoft’s hardware and software teams. They’re far from perfect game consoles, but the Xbox 360’s dominance in the last console generation is tough to ignore. Even now, the 360’s user interface is head and shoulders above that of the PlayStation 3’s. That ease of use could be seen as one of the biggest edges Microsoft had in the gaming business—and could still be a big factor this generation, if the company can find a way to lower the Xbox One’s price and bring out more appealing games.
But the smartphone market is a lot different from the gaming market. The Windows Phone is in a distant third place in a race dominated by Apple’s iPhone and Google’s many Android phones. Apple earned its place by tightly controlling its product and offering a premium experience to its customers. Google made its own path by changing its goal: get users into Android to get them—and their data—fed into Google’s ecosystem. That drives the Google engine; Android is a means to that end, not the end in itself.
So where does Microsoft fit in? The Nokia acquisition means that Microsoft will now be directly competing with its OEM partners, companies like HTC, LG, and Samsung. It’s already been competing with computer makers with its line of Surface tablet computers, but the huge market for Windows PCs helps keep that field competitive and, presumably, profitable. Will those other manufacturers be inclined to continue supporting a mobile OS that has so far failed to attract a sizeable audience, and will now face stiffer competition from the Windows Phone license holder in Microsoft?
I have a feeling that regardless of what those other OEMs decide to do, the Nokia acquisition is still a win for Microsoft. Hopefully this union will allow the company to demonstrate all that a Windows Phone should be, and might provide an interesting new alternative to those looking for a new mobile experience. We’ll have to wait and see what this new Microsoft+Nokia entity can come up with.
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