Microsoft has announced the historical purchase of Nokia’s mobile phone business for 5.4 billion Euros. The deal is very significant for both companies. For Microsoft, the software giant is going to compete with Apple and Samsung in the handset market. For Nokia, it may end the continuing loss in its handset market and may concentrate in equipment manufacturing.
Microsoft’s entry into the mobile phone market is a big bang. Now, the handset market is increasingly becoming a duopoly scenario dominated by Apple and Samsung, though small players are emerging. Nokia was slowly disappearing with fading market presence. In its hardware entry, Microsoft is following the footsteps of Google, which bought Motorola Mobility Hub in the recent past.
What tempts Microsoft into the handset market is the development in the mobile phone market. Mobile phones have entered into the next stage where each phone is a mix of hardware and the embedded software (which is an operating system). Now the handset market is dominated by Google’s Android.
Microsoft’s attempt to enter into the mobile phone OS market has not gone well. Window’s operating system has not gained much in the mobile phone market. Samsung is mostly relying on Google developed Android and Apple is using own OS in their handsets.
Having own handsets may help Microsoft to have access to the handset segment opportunities in future.