Will Nokia Inc One Day Buy Back Their Mobile Division?

Lumia Cyan update

I read through a number of Windows Phone fan blogs yesterday and found that there are Windows Phone fans who strongly feel that Microsoft has no future in the hardware business and that we can expect the death of Lumia range of phones. Here is one such comment:

Nadella [Microsoft CEO] is smart and I believe he was not much interested to take over Nokia hardware business to Microsoft though it happened. Future of Microsoft is on services and software. Take an example of Google, they always focussed on net services and operating system. Take example of them because they bought Motorola and gained their patents and sold out hardware to Lenevo.

Future of Mokia is very much predicted. Within 2 years or less Nokia series phones from Microsoft will die.

Much as I find the idea unpalatable, I cannot ignore the fine points that th commenter made. Here:

  1. Microsoft CEO has made it clear that the company’s focus is software and services
  2. Already, he has announced the phasing away of Asha and Nokia X devices, and it is my opinion that the Lumia range cannot fill all of that gap (the Lumia 530 can take the X range’s place, but not Asha’s)
  3. Google made a similar move and bought Motorola’s mobile unit, which ran at a loss till it was sold to Lenovo.

With a primary focus on software and services, who knows – Microsoft might just not be able to play well in the hardware court. However, it must be said that Microsoft/Nokia is not exactly the same situation that Google/Motorola was in. By the time Google was buying Motorola, the latter was an insignificant player in the Android market. Here with Microsoft/Nokia, Nokia was (and remains) the dominant player in the Windows Phone market. The truth is that unless other Windows Phone OEMs overtake Lumia devices, the platform will swim or sink with Lumia. Whatever Lumia becomes is the fate of Windows Phone.

This is why I doubt that Microsoft will let their hardware division fail. Perhaps after pushing it into a stronger position than it currently is, should Microsoft decide to stick strictly with software and services as Google has chosen, we might see another strong industry player take mobile hardware off Microsoft sometime in the future. It sounds like a good plan – buy Nokia mobile division (because for now, Nokia = Windows Phone) in order to keep Windows Phone alive and help grow it (even if it doesn’t turn a profit for years, Microsoft has the cash to keep it going just like Google kept Motorola going), then once the platform is strong and thriving, offload it (while keeping Nokia’s patents) and dedicate all energies on Microsoft core competences going forward.

The company that will buy Microsoft’s hardware division may turn out to be one of Asia’s emerging OEMs who are now already announcing Windows Phone devices. But then also, that company may very well be Nokia Inc. (which still exists and is profitable and strong), the original parent of the Lumia range.

One thing is for sure: if Microsoft is unable to leverage their purchase of Nokia’s mobile division to grow Windows Phone’s sales and market share, the platform will end up with an RIP signpost over it.

Pssst: Meanwhile, in related news, is it a Microsoft thing to announce the impending death of a platform/device and then still try to sell the zombies to the public? Stephen Elop did it with Symbian, and now Nadella has repeated it with Asha and Nokia X. How do you announce the death of Nokia X, knowing that the X2 is on its way to the market? Yeah; I think I get it: it must be a Microsoft thing.

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2 Comments

  1. Eye_Bee_Kay July 24, 2014
  2. Eye_Bee_Kay July 24, 2014

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