In a twist nearly everyone saw coming, it has been confirmed that Microsoft have agreed to buy Nokia’s mobile business for 5.4 billion euros – or £4.6bn. As the biggest proponent of Windows Phone 8, it’s the Lumia range which makes up the bulk of the Operating System’s handset sales, thanks partly to a huge marketing budget.
The deal includes the phone-making unit and a large sum for licencing patents for the next 10 years, although they will still belong to Nokia itself. It does not include the mapping services or any of the network equipment or future developed technology.
So, the big question on everyone’s minds is: why Microsoft has done this? The answer seems to be that moving into a multifaceted hardware/software giant will be a big shift, as opposed to relying solely on Windows and Office sales. Microsoft’s first foray into hardware, the Xbox, has been a runaway success – already a household name in entertainment, the soon-to-be-released Xbox One is already making waves. The stumbling block has come with Microsoft’s tablets, the Surface RT and Professional, which have not set the world on fire anywhere near as much as they had hoped.
With Nokia’s talented mobile developers and technologies, this isn’t just a grab to fully control the Windows Phone 8 software and hardware market and keep it fully in house - a la Apple - but should also contend to bring a range of connected mobile devices all with the full brand support of Microsoft. Windows Phone 8 handset sales are on the rise, and globally Nokia was number 2 in terms of market share, second only to Samsung. A large portion of these are feature phones from developing markets, but Microsoft will be aiming to leverage their position to upsell to their integrated platform as soon as possible.
With everything fully in house, I expect they go the Apple route of a seamlessly integrated ecosystem with everything from Skype, Windows Phone and Xbox Live all talking to one another, with hardware akin to Sony Xperia series – tablets and phones all uniformly designed. Going even wilder with the idea train, we could see an Xbox-branded phone, or integration with the Xbox controllers for games, and finally the streaming of games from console to handheld device we were promised oh so long ago!
Keep your eyes on the Geek Squad site for more info as and when we get it, but one thing’s for sure: we’re living in exciting times for Microsoft.