The Microsoft-Nokia Deal: A Bold Step too Far?

Backbencher September 5, 2013 0
The Microsoft-Nokia Deal: A Bold Step too Far?

By Rob Nichols.

This week, Microsoft announced the £4.6bn purchase of Nokia’s mobile phone business in a move described by retiring Microsoft CEO Steve Ballmer as, ‘a big bold step forward.’ There’s no doubt that it’s big and bold, but the question I’m left wondering is, will it propel Microsoft forward?

Steve Ballmer’s certainly hoping, and indeed gambling, that this move will finally allow Microsoft to become a company that makes devices. It’s moving closer to the Apple model, which keeps everything in-house and close-knit, not allowing any interference from third parties who could potentially tarnish their product. But Microsoft isn’t going the whole hog here, they’re simply swallowing up one of the previously most successful and trusted manufacturers of phone, while reinforcing its commitment to other hardware partners, such as HTC, who are ‘assessing the situation.’

The problem Microsoft potentially faces is that there’s a very obvious and very successful alternative to Windows Phone. Android. Their hardware partners are already hugely invested in Android, and Google’s OS appears the priority for almost every major manufacturer, Apple aside. So if Microsoft is aligning itself in direct competition with those who have been doing them a great service by licensing and popularising Windows Phone, it could certainly lose favour and face with partners and customers alike. There’s always an element of brand loyalty with customers, particularly those not as savvy. I’ve come across countless people who still categorise phones by manufacturer, not OS. They see an HTC or a Samsung, not Android, nor Windows Phone. By risking the severance of ties with leading and trusted manufacturers, Microsoft may also jeopardise important sales figures.

On the other hand, this move potentially marks the end of Microsoft’s dithering in the mobile market. For years they’ve relied on their success with Windows and Office to keep afloat a company which has failed miserably in their efforts in mobile. Finally there appears the emergence of a clear strategy to move forward in mobile, produce a streamlined product that they have complete control over, and ship no-compromises products. Should partners like HTC decide to jump ship, it may well actually boost Microsoft. Maintaining these relationships will mean Microsoft will have to cater for third parties, and potentially compromise their products and not deliver the quality that the customer demands.

Microsoft-Surface-RT

Microsoft has one of the strongest product catalogues of any of its rivals. Can the Nokia deal help further strengthen the Windows brand?

There’s certainly reason for optimism if you’re a supporter of Microsoft. Over the past few years we’ve seen the emergence of several products that define a clear strategy going forward, and a strong brand behind it. The Windows name now lends itself to desktop, tablet, phones, and the experience is consistent across all the products. Consumers demand integration, they demand seamless synchronisation, and Microsoft is now in a position to deliver. With products such as Office and Xbox, Microsoft has possibly the strongest array, of renowned and quality products to deliver its customers, of any of its rivals.

And let’s not ignore the fact that Microsoft is itself a huge global brand, despite how obvious a statement it might be. People will trust Microsoft; this isn’t a small new startup trying to take on Apple and Android. Let’s not underestimate the effect of being ‘cool’ though. Apple is cool. Google is pretty cool. Microsoft is lagging along way behind, but is certainly coming on quickly. Surface is a cool product, and hopefully this now concrete relationship with Nokia will spawn some cool and world class products.

 

Rob Nichols

Twitter: @R0bNichols

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