Here's a Good Reason Why Microsoft is Buying Nokia
Nokia Smart Phone will be the launching pad for Microsoft services in many markets.
Sure, acquiring Nokia's Devices and Services division means Microsoft will have direct access to the company's smartphone and mobile phone businesses, the design team, manufacturing and assembly facilities around the world, and teams devoted to operations, sales, marketing and support. Microsoft will even have access to a bucket of patents, and Nokia's snazzy mapping service.
But what Microsoft will also gain is a wider global audience for its own services. Nokia's "Conversations" blog was updated last week to welcome Nokia's broader Mobile Phone customer base to the Microsoft family. These devices include next-generation feature phones like the new aluminum Nokia 515 and the Nokia Asha 501.
"There are 1.3 billion people using a Nokia phone today," said Microsoft Vice President of the Operating Systems Group Terry Myerson. "In some markets, the word 'Nokia' is synonymous with 'phone' – and we aspire to live up to that brand as we welcome customers of these products into our Microsoft family."
So here's food for thought. 1.3 billion is an impressively large number even it includes legacy hardware. But it's also an audience Microsoft will eventually address with its own services and perhaps one day a Windows Phone device. For many, a new $20 Nokia feature phone would essentially be their first personal computer, and with Microsoft's name stamped all over it.
Microsoft said last month that Nokia's Mobile Phones business unit had sales of 53.7 million units in the second quarter of 2013. Microsoft will acquire the Asha brand and will license the Nokia brand for use with current Nokia mobile phone products, although Nokia will continue to own and manage the Nokia brand. This will allow Microsoft to extend its service offerings to a far wider group around the world while allowing Nokia's mobile phones to serve as an on-ramp to Windows Phone.
"With Nokia's Mobile Phones starting at $20, more people will be introduced to Microsoft services earlier in their lives than ever before. In some geographies, Windows Phones are not available," Myerson said. "Again, Nokia's Mobile Phones will introduce more people to Microsoft services in more places than ever before."
Nokia's Smart Devices business unit, which includes the Lumia brand and products, saw sales reaching 7.4 million units in the second quarter of 2013.