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Microsoft Buys Nokia's Phone Unit
Tuesday, 2013 September 3 - 10:56 am
Microsoft announced today that it is purchasing Nokia's devices and services unit, which most notably includes the mobile phone business, Nokia's Lumia series that runs the Windows Phone 8 operating system. Nokia was really the only successful Windows Phone vendor; HTC, Huawei, and Samsung were far behind.

A couple of interesting takeways from this announcement:

  • This surely vaults Stephen Elop, Nokia's CEO, to the front-runner position to take over for ousted Microsoft CEO Steve Ballmer.

  • While Microsoft has publicly committed to continue supporting other vendors, this move will surely turn them off. Samsung in particular will see very little incentive in supporting the platform, having much greater success with Android and rumored plans to push towards Tizen. HTC is in a bit of a pickle... they're not in a dominant position with any phone OS, so they might not have a choice but to continue trying to support all of them. Or maybe they'll jump to a different OS entirely.

  • This was probably the only move that made sense for both companies. Nokia and Microsoft had most of their eggs in each others' baskets, when it came to handsets. Without Nokia, there would be no flagship Lumia 1020 to brag about; without Microsoft, Nokia would be clinging to some crappy Symbian OS variant.

  • This isn't really like Google's acquisition of Motorola's handset business, because Motorola wasn't the dominant Android vendor. The stronger Samsung gets, the worse the Motorola acquisition looks.

Winners: consumers, Microsoft, Apple. Why Apple? Because the consumer smartphone market is really a matter of Apple and Not-Apple. A third mobile OS vendor will pull more customers from Android than it will from iPhone. Plus, a viable Windows Phone competitor will counter the hypothesis that Android will simply continue to grow and stomp out all competition in the market, just as Windows did in the PC market.

Losers: HTC.

Remains to be seen: Android, Samsung, Motorola.
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Posted by Ken in: techwatch

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