Microsoft’s Nokia acquisition of Devices and Service Business
Here is some big and great news from the middle of the night. In keeping with Nokia Company, Microsoft will buy substantially all of Nokia’s device as well as service arms and also licensing phone maker’s patents & mappings know-how. The Redmond Company will pay Nokia amazing 3.79 billion Euros ($4.99 billion) for the business and 1.65 billion Euros ($2.18 billion) for its patent armoury. As the part of a deal, Stephen Elop will just step down as Nokia chief executive in order to become executive vice president of the devices as well as services division. Elop, former Microsoft executive is one of handful of candidates that are suggested to replace Microsoft Steve Ballmer.
Now Microsoft has purchased Nokia’s services unit and devices which bring Lumia line up under Redmond roof. Whenever the deal closes in first quarter of 2014, Microsoft will pay €3.79 billion for Nokia’s business plus another €1.65 billion to license its portfolio of patents. Driving a force behind sale seems like to be Nokia’s Asha brand that Microsoft has completely acquired outright. Asha gives Microsoft even larger footprint for this kind of Window Phone and also provides access to various customers for developing countries.
What Assets is Microsoft Buying?
Generally, all these companies are acquired for one of two things such as management and valuable assets the company holds. Sometimes there are difference of opinion about how to value tangible and intangible. Here, the asset list consists of a list as diverse as clients, intellectual property, brand or some physical assets including storefront.
Three things may be acquired:
Market Share: There are about 6.8 billion mobile subscriber and many of those particularly outside of US and has hold on to phone for long as 60 months. That specific number is the key as Nokia held 53% of world’s handset up to 2012 whenever they actually lost to Samsung. This would become large share of people who already have Nokia products and has some potential to upgrade it.
Innovation: Finally, the good optics as well as camera resolution of Nokia’s new flagship phone is one of the latest in long line of successful hardware. Now-a-days Nokia phones are also known for exceptional battery life, form and functions.
Brand: Here, the market share was somewhat driven by belief that Nokia made such products that customers are actually wanted specifically outside the US. Its new and additional LED flashlight or torch in Nokia Phones in India simply drove the market share.
What Does the Customer Want?
The end users and business users always wish to have devices that actually match their requirements in a time as well as place at a very competitive price. These days people also become loyal to the ecosystem for device manufacturers is called as a platform. Once the system will be on platform, then it may become difficult to change as you’ve invested in services as well as features it provides. Microsoft is at a crossroads but not like other companies as its vast resources open opportunities for overall transformation and growth.
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Through this blog, Carrie Miller has updated her blog saying about Microsoft’s this intelligent move simply unites Windows Phone 8 with the biggest hardware supporter that gives company integrated mobile.