Posted by: Chris Barylick
Date: Tuesday, September 3rd, 2013, 06:53
Category: News, wireless
Because it’s fun to buy multi-billion dollar companies.
Per The Mac Observer, Microsoft is buying Nokia’s cell phone business for about US$5 billion and tossing in another US$2.2 billion to license the company’s patents. The deal throws together two big time companies that are struggling to compete with the likes of Apple and Samsung, brings Nokia CEO Stephen Elop — a former Microsoft executive — back into the fold, and shows Microsoft is serious about playing in the smartphone game. All this as current Microsoft CEO Steve Ballmer has announced he will step down within 12 months, although now it’s looking like that may come much sooner than he thought.
As part of the €5.44 billion (about US$7.2 billion) deal, Mr. Elop will step down as Nokia’s CEO and take on the roll of Microsoft’s Executive Vice President of Devices and Services. Other Nokia executives joining Microsoft include Chris Weber, Jo Harlow, Timo Toikkanen, and Juha Putkiranta.
Microsoft has had limited success in the smartphone market taking on Apple’s iPhone and Google Android-based devices from Samsung and other companies. Nokia threw its weight behind Microsoft’s Windows Phone platform about two years ago, and has since been able to climb above BlackBerry’s marketshare to become a very distant third to iOS and Android-based smartphones.
With Nokia’s Windows-based Lumia smartphone now in Microsoft’s hands, it’s a safe bet that we’ll see a strong push to boost sales. Exactly how Microsoft can go about convincing consumers to start buying the smartphone, however, maybe something of a trick since shoppers haven’t been flocking to the device in droves. So far, consumers are still far more interested in buying iPhones and Samsung’s Galaxy smartphones.
Whether or not Microsoft can really be successful at its slow-and-steady game this time isn’t, however, a sure thing. Apple and Android smartphone makers hold nearly all of the market share today and aren’t showing any signs of loosening their grips.
Apple is expected to unveil new iPhone models on September 10, and Samsung, HTC and Motorola are churning out new Android-based smartphones as fast as they can. Microsoft has maybe a year ahead of it during during which it will integrate Nokia into its business, plus it’s on the hunt for a new CEO who will need time to settle into the job.
Mr. Ballmer said he plans to step down within 12 months, implying that it may be that long before his replacement is found. Finding a new CEO could take that long, although Microsoft is already on the hunt, and it’s very possible the company just bought their new boss and picked up their own smartphone business as a side bonus.
Stay tuned for additional details as they become available.