Microsoft’s move to acquire Nokia’s device division is a stroke of genius and will likely provide the corporation with its next CEO, along with a collection of some of the finest smartphone technologies and talent in the game.
Microsoft has made its most aggressive move in mobile to date by offering $7.2bn for Nokia’s handset division. The acquisition will change the smartphone market fundamentally, bolstering Microsoft’s position amid the dominance of Apple, Google and thirdparties like Samsung, while BlackBerry prepares to be sold off in pieces. The timing is great and comes with an extra large cherry on top in the form of Nokia CEO Stephen Elop.
This is the second big announcement for Microsoft in as many weeks, following the news that CEO Steve Ballmer will step down from his position in the next year.
Ballmer said that he must step aside as Microsoft transitions to a ‘ devices and services company’. It seems obvious, to me anyway, that Ballmer’s successor will be current Nokia CEO Stephen Elop, who was at Microsoft before joining the Finnish smartphone manufacturer.
This is the real prize for Microsoft. Yes, it will now get Nokia’s expertise in creating mobile phones and its wide range of services, including location and mapping, Nokia Music and some of the f inest design and engineering talent in the industry, but it will also get the man who took Nokia from a race to the bottom in the smartphone arena and gave it a f ighting chance. Someone who has a shot at taking a software licensing business and transforming it into something capable of taking on Google and Apple.
The acquisition, which will take place for considerably less than Microsoft paid for internet telephony com- pany Skype – for perspective, will see the transfer of 32 000 people from Nokia to Microsoft, more than half of which work in manufacturing. Microsoft also cited Nokia’s Asha range of affordable, emerging-market smartphones as an exciting part of the deal.
The game is on. Microsoft’s share price jumped 7% on the news of Ballmer’s departure and is likely to emerge from its decade-long slumber in the wake of the Nokia deal. It’s now clear who will occupy third-place in the maturing smartphone market.
The writer owns shares in Microsoft. Steve Ballmer Stephen Elop