Microsoft has completed all the acquisition proceedings of Nokia and officially entered into the competitive mobile phones industry. The Seattle-based giant has taken over almost all of Finland-based Nokia’s devices and services, according to an open letter announcement made by Stephen Elop, the former Nokia CEO and head of the Devices and Services part of the company. Elop’s new portfolio now recognizes him as the Executive Vice President of the Microsoft Devices Group, second only to Microsoft’s CEO Satya Nadella.
In the letter, he said that six months ago the two firms had announced to bring together the best each had to offer and combine them to make a better and more successful business. He said “today was the day” when Nokia joined “the Microsoft family.” He said the shareholders of Nokia and all concerned regulatory bodies had approved of the deal and Nokia has officially been acquired by Microsoft, in the first and most important step towards their “long-term journey.”
Speaking of the mission statements of Nokia and Microsoft, Elop said that both the firms’ core aim has always been to build “technology that will change the world.” He said that Microsoft’s early vision had been to place a personal computer in every home and Nokia’s vision had been to connect billions of people around the world via mobile devices. He said both the firms have “empowered generations” for years now.
Referring to their future plans, Elop said Microsoft will be targeting the affordable mobile devices market based on Nokia’s mobile phone business. He said the affordable mobile devices market is an annual $50 billion opportunity that would be ideal for Microsoft to tap into. He said the firm aims to introduce phones to people who still do not use a mobile device and introduce Microsoft services at the same time to these new customers.
The acquisition of Nokia cost Microsoft an estimated $7.5 billion. Microsoft will be mostly utilizing Nokia’s efforts to market the devices and establish itself on the top of the industry again; a position that Nokia enjoyed for a long time in its past glory days before the onset of smartphones pushed the firm into the background and made way for rival giants like Apple and Samsung.
However, many industry leaders are judging the acquisition decision and wondering if it is in the best of interests of Microsoft. The two firms have long partnered on several mobile devices – Nokia and Microsoft brought out the Lumia range of smartphones based on the Windows Phone operating system – but failed to capture consumer interest, and industry leaders are questioning if this acquisition will help to overcome the hurdles the two companies faced as separate entities that prevented them from enjoying success in their previous efforts at smartphones.
At present, industry statistics show Apple to be the smartphones market leader, with the recent company results also showing continuing positive growth. Samsung is leading behind Apple. Both Samsung and HTC have recently launched their advanced Android smartphones that are successes. Meanwhile, Google is also streamlining itself into the smartphones industry with a much cheaper mobile device that could destabilize the market as a whole. So basically, the market is saturated and competition is extremely tough.
Smartphones industry leaders say Microsoft must strongly believe that this acquisition would curtail their past errors, now that Nokia is under one umbrella and so the decisions that will be made for their range of phones will be a collective effort, which may help the phone sales in the long run.
Moving on, Microsoft was asked if the brand names of the Nokia phones would change after the official acquisition. Microsoft said that it is not likely in the near future since it has “licensed the Nokia brand” for 10 years for all its cell phone devices. The company said the license also meant that they would be marketing smartphones with the Nokia brand for a limited period of time and therefore, the name will stay for now.
By Faryal Najeeb