By June 20, 2013 4 Comments Read More →

Microsoft and Nokia: Should Kissing Cousins Marry?

Rumors are once again circulating that Nokia has a “For Sale” sign on it.
The latest rumors are nothing new citing Huawei, Lenovo and Microsoft all as potential buyers.

It was Nancy Gohring’s piece over at CITEworld that prompted me to offer up an opinion.
Why would Microsoft buy Nokia’s cow when it’s getting the milk for free?

Read more detail here:
Rumours intensify of a bid for Nokia – The Economic Times


Some thoughts.
1. Microsoft is springing for a lot more than pizza and a movie already… and it is barely getting a kiss on the cheek. With that said, no investment made by Microsoft over the past 20 years that I have been covering them, has provided better returns then Nokia. This despite enormous culture gaps between the two companies.

There is no question that Microsoft is taking a slow but steady, if sometimes confusing path. Windows Phone 8 is slowly but surely gaining traction, Office365 on iPhone and in the cloud are interesting. Least we not count the indecision indicated by Windows RT and Surface Pro which at least signals Microsoft’s intent to put money where its mouth is.

2. The battle of devices is over.
The battle of the ecosystems is underway. Samsung and Apple are making aggressive strides along these lines. Right now, Microsoft’s ecosystem expansion feels like a mosh pit. I don’t have anything good to say about BlackBerry along these lines so I’ll pass. And Google feels like it’s playing a victim’s role in some “who done it” suspense thriller.

Microsoft and Nokia stepping up to the altar does have the potential to create some synergies, and build a strategic ecosystem including but not limited to; consumer/business product balance, cloud, global branding and distribution, location services, and gaming.

Of course in any M&A, the “A” is easy. Microsoft, like Google is not so good at the “M” part.

Update: June 21:
My friend Stephen Brancati (@smbrancati) pointed out via Twitter another consideration this morning: “In a way, Nokia’s Windows Phone journey started as a “kept” relationship, with Microsoft supporting it. Microsoft may have to marry Nokia at some point to keep her from straying..”

Stephen is right, Microsoft may feel forced into buying Nokia, if for no other reason than to keep Nokia out the hands of Huawei et al. It clearly would not be the first time we’ve seen a company in this sector make such a defensive move.

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