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Here's a Good Reason Why Microsoft is Buying Nokia

By - Source: Nokia | B 22 comments

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.

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  • 2 Hide
    Dorian Black , September 26, 2013 3:49 AM
    Not sure if it's a good reason or a good sign of desperation.
  • 4 Hide
    BeastLeeX , September 26, 2013 4:10 AM
    I hope they are still indestructible.
  • 0 Hide
    virtualban , September 26, 2013 4:20 AM
    Divided they would fail in the current landscape of mobiles.
    Together they will fail still, but maybe they can hold on a little longer.
  • Display all 22 comments.
  • 0 Hide
    tului , September 26, 2013 4:41 AM
    So basically Microsoft realizes people with money are already taken and will sell to poor people. I mean if it makes them money, I guess it works. Gotta sell a lot of $20 phones in the 3rd world to make any though.
  • -1 Hide
    abbadon_34 , September 26, 2013 4:51 AM
    Great so Microsoft is not "pivoting" to the third world? Disgraceful, though I supposed it's the only place where there are still respected, after Europes obscession with Internet Explorer and Clinton's monopoly prosecution.
  • 2 Hide
    back_by_demand , September 26, 2013 5:38 AM
    abbadon_34, Europe's uptake of Windows Phone is double that of the USA, I think the level of respect that they command is higher than you give credit for
  • 2 Hide
    Narcissistic_Martyr , September 26, 2013 6:26 AM
    Quote:
    So basically Microsoft realizes people with money are already taken and will sell to poor people. I mean if it makes them money, I guess it works. Gotta sell a lot of $20 phones in the 3rd world to make any though.


    If you make $5 on 1 billion sales you not only make $5 billion but when they move up in the world they'll likely stick with your products. Proctor&Gamble does the same thing with their charitable work and product donation in third world countries which is helping them build a relationship with future customers.
  • -2 Hide
    cats_Paw , September 26, 2013 6:37 AM
    Good moment to throw away my nokia, knowing how microsoft operates.
  • -1 Hide
    belardo , September 26, 2013 6:49 AM
    Meh... okay, 3rd world kind of understand it... like converting AppleII owners to Macintosh or C=64 to Amiga... but it may NOT work.

    There is another problem, which China shows. In those 3rd world countries - to get a SmartPhone is lucky enough... but it doesn't feed the eco-system of a mobile platform (App store)... A typical iPhone user will spend $100 on apps and $1000+ on music. In China, nobody buys anything... or very little.

    So the MS App store has little to buy with no customers to buy it. Makes sense now! :) 

    I thought the real reason for MS to buy our Nokia Mobile was to keep the ONLY WindowsPhone brand alive. Samsung and HTC were pretty much out (They didn't get paid to make WP phones like Nokia did) and as of now, they are out of the WP business. Just as the only one making an RT tablet is now Microsoft and they dropped the RT name off the product. (Bwahahahaha) Really, it would have made FAR more sense to have kept the Metro Name of the GUI since its NOT Windows anything.

  • -4 Hide
    Avus , September 26, 2013 8:10 AM
    MS buy Nokia because Nokia is not the cell phone leader anymore (for a long while) and they are CHEAP to buy... A market loser buy another market loser.
  • 0 Hide
    Tony Crooks , September 26, 2013 9:05 AM
    Slight problem is that MS do not own the Nokia trade mark or name and any new phones that MS deliver to market will be under the MS, probably Lumia, brand. Inspires confidence, doesn't it, given the track record of MS with mobile devices?
  • -1 Hide
    Bolts Romano , September 26, 2013 9:20 AM
    1.3 billion still using Nokia, hmm a big number comes from the user in Asia or ME. These are the last generation user who will still use a non smartphone on their daily activity. Phones from China with similar feature or better than Nokia Asha already flood the market. What China need to do is to rename Huawei into something better than bye bye Nokia
  • -1 Hide
    Rhinofart , September 26, 2013 11:32 AM
    I still fail to see how Microsoft is a Market Loser. Can somebody explain that to me?
  • 0 Hide
    joebakb , September 26, 2013 3:05 PM
    I've had multiple android phones and took a chance on the 920. It's the best phone that I've ever purchased. People need to try out a windows phone before they knock it, because I think they're in for a pleasant surprise. I think App developers will be catching up here soon too. I'm running through a bunch of tutorials on the WP SDK in Visual Studio and, man, does it look polished, intuitive and relatively easy to work with.
  • 0 Hide
    g-unit1111 , September 26, 2013 4:11 PM
    Quote:
    I've had multiple android phones and took a chance on the 920. It's the best phone that I've ever purchased. People need to try out a windows phone before they knock it, because I think they're in for a pleasant surprise. I think App developers will be catching up here soon too. I'm running through a bunch of tutorials on the WP SDK in Visual Studio and, man, does it look polished, intuitive and relatively easy to work with.


    I really like the interface of Windows Phone. I'm on Sprint and unfortunately they did not have any WP8 devices when I signed on. But now I'm heavily considering adding a line and getting the Samsung ATIV. It looks pretty sweet, I'd like to see it in action.
  • 0 Hide
    dsolom3 , September 26, 2013 6:53 PM
    I gotta use VS-2012 for school, and it is the most horribly-designed, slow-as-dog, buggy POS I've ever had the misfortune of using. No, wait, I take that back. Windows ME was that. VS-2012 is second...
  • 0 Hide
    sicom , September 26, 2013 8:57 PM
    I love my Nokia Lumia, and Nokia's map/GPS services are indeed impressive.
  • 1 Hide
    Andrejs Sosnovskis , September 27, 2013 4:52 AM
    wp8 is a nice balance between bloated chaos of android and nazi concentration camps of apple, getting lumia as soon as 625/925 is available on contract here
  • 0 Hide
    vibol03 , September 27, 2013 12:51 PM
    i dont think half the people that comment here even use Windows Phones 8. They sound so ignorant of Nokia and Microsoft in the outside world
  • 0 Hide
    SHAMBOB1874 , October 5, 2013 10:19 AM
    Microsoft Office on a phone , has got to be a winner .It suits me I'll tell you.
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