Microsoft expands its market buying Nokia
The American company’s goal is to promote Windows Phone in the mobile market. Microsoft announced the purchase of Nokia in a statement on their official website. The agreement focuses on the absorption of the mobile phone business of the Finnish company, which is currently shooting in bag with a rise of 41%. Microsoft hopes to boost Windows Phone market and actively compete against established duopoly Android and iOS, with the effort to place its operating system among the most used.
The operation will be done the first quarter of 2014, following the approval of state regulators and shareholders. The total value of the investment is 5.440 million euros, of which almost 3.800 million is for the manufacture of mobile phones and the remaining 1.600 is for the assignment of patents from the Finnish company. In addition, the agreement includes the transfer of 32.000 multinational employees from different departments such as management, engineering, manufacturing, assembly and worldwide distribution. With all these incentives, Microsoft goes one step further to compete actively in the telephone market marked by high rates of Google and Apple.
The CEO of Nokia that had worked for Microsoft, Stephen Elop, said that it was a situation that benefited everybody: employees, shareholders and consumers. The two teams together will accelerate a share of the Microsoft market and its benefits on mobiles. Moreover, Elop has also left his position, making himself run the final control of Nokia, according to the statement.
The news didn’t surprise its competitors. Since 2011 the two companies agreed to a partnership, in which all Nokia devices incorporated the Windows Phone operating system. This decision was not well accepted by the shareholders of Nokia, after seeing its market share falling significantly.
Despite being over 14 years the world leader in mobile phone market, the Finnish company failed to see the technological changes. The arrival of touch mobile phones destroyed the concept of a small mobile, practical and simple, giving way to Apple and Samsung that in a short time have become the main suppliers of mobile devices. This event caused the dismissal of 20 000 employees and the elimination of numerous economic premiums for workers who remained on staff, plus a loss of five million euros in the last nine quarters, assured EFE. From now on the former world number one in sales will focus its work exclusively on network business and services.
However, Microsoft has improved his numbers lately, as Windows Phone has accelerated its place in the main European markets, surpassing even Blackberry, according to data provided by the consulting company Kantar. Perhaps over time would they will threatened existing operating systems that currently dominate the market, as this transaction is very similar to what Google did just two years ago, when it absorbed Motorola.
But do not expect to find only Windows Phone on Nokia devices, as the American software giant has confirmed that they will offer its operating system to other companies. For the moment Samsung, HTC and Huawei have already shown their interest on this system. Therefore economic forecasting of Microsoft is to triple the market share in the next five years, from 4% to 15% in 2018. Will they manage to do it?