Windows mobile platform covers the variety of options at multiple price points, offering high-end personal experience for those who do favor personal touch. What is more, Windows Phone now suggests more than 170,000 applications, which creates the shift to a new mobile ecosystem. Thus, the chance for Microsoft camel to squeeze through the needle’s eye is quite tangible now. The destination is nothing less than the Android-iPhone exclusive domain in mobile galaxy. No one (both staunch adherents and implacable adversaries of Microsoft) could have ever dreamt of this a couple of years ago.
Core of the Deal
In September 2013, Microsoft advanced to buy Nokia’s device and services division for $7.2 billion, with intentions to become more Apple-like, amassing both hardware and software control under one roof. In case Microsoft wants to say its decisive “I’m still here!” in mobile, it will have to ensure that its hardware and operating system work together without a hitch. The nagging factor of supporting other device makers is away now; it simplifies Microsoft’s life a lot.
Nokia is the only – and favored – Windows Phone vendor with any real market share clearly seen without a magnifying glass. It sold 82% of all Windows Phones in the second quarter, according to IDC. The Finnish company shared this path together with Microsoft a couple of years ago, even at the expense of its own OS, that’s why some analysts claim the deal isn’t in Nokia’s favor. But for Microsoft, the acquisition target is justified both financially and morally.
Microsoft announced the acquisition and assimilation plans for Nokia in order to market its own devices in the best way, because the playing field turned out to be uneven: $10 for each Microsoft phone that Nokia sells, while Nokia gains about $40 in gross margin. So, hardware moves into Microsoft’s priorities, with the possible by-effect of repelling its former partners. But losing all other Windows Phone licensees (as the inevitable scenario) is a risk it’s eager and ready to undertake.
Windows Phone revealed a year-over-year (2012-2013) growth rate of 156%, mainly due to the ever-attractive factor of reasonable price (Lumia 520 is offered at Amazon at very affordable $129). According to IDC analyst Ramon Llamas, the mass market can afford it, and it’s the main driving force behind the entire market growth. So, Microsoft is fully equipped to plunge headlong into the promising deal.
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