Why Microsoft Buying Nokia Is A Win-Win Situation For Everyone
By now most of you have probably heard that Microsoft has bought Nokia for a cool $7.2 billion. This news has shocked many people around the world, as nobody really expected Microsoft to completely take over the Finnish company. Once a mighty company which was the sole champion in the phone market has now come to an end. But is it really bad news for Nokia or Microsoft? Well, actually it is a win-win situation for both the companies and the final consumer – that is you! Check out the reasons why Microsoft buying Nokia is a win-win situation for everyone.
Why Did Microsoft Buy Nokia?
If we are to understand why it is a win-win situation, we first have to answer; why didMicrosoft buy Nokia? After all Microsoft was already working with other smartphone vendors such as Samsung and HTC. So why buy Nokia?
The answer is kind of obvious; competition!
Microsoft is facing an ever-increasing competition from tech companies such as Google, Apple, Samsung and others. The one thing common all of these tech companies have, is that, they manufacture hardware themselves. And, having their own hardware is extremely important. That’s why Google bought Motorola – it needed a hardware company.
That’s the reason why CEO Steve Ballmer was pushing for Microsoft to buy a hardware company. And, as it turns out Nokia was the help line.
Why Did Nokia Sell To Microsoft?
The next question we should be asking is “why did Nokia sell itself to Microsoft?”. It’s a valid question, considering Nokia sells millions of phones around the world and is a multi-billion dollar company.
But if you are to look at the recent numbers regarding Nokia smartphones sold around the world, then you would know that Nokia is in trouble. Nokia’s last quarter sale were down 24 percent compared to previous year. The feature phones market, where Nokia has a stronghold also saw a deep decline as Nokia sold 39 percent less phones. This shouldn’t come as surprising considering many people are now opting for smartphones – where Apple and Samsung (Android) are dominating the market.
Nokia needed an exit strategy – and, Microsoft was there to provide it.
What Do They Each Benefit?
Each company has to keep their shareholders happy, either by selling itself or buying another company.
Nokia had a bleak future as the Lumia series did not perform as well as expected. Although it did sell literally millions of smartphones around the world, but the shiny new Metro tiles were a bit too different from the icons we have been used to. So Nokia didn’t want to go bankrupt after some years, it need to sell itself to keep its shareholders happy.
Nokia’s shareholders get the entire chunk of the $7.2 billion – which is a lot.
So what does Microsoft benefit? As mentioned above Microsoft now gets to choose what kind of hardware the next Lumia will have.
What else does Microsoft get for paying $7.2 billion? Check out this list.
§ Nokia’s entire smartphone department.
§ Nokia’s design team.
§ Hundreds of patents (these days it seems these are very important).
§ HERE mapping technology.
How Will This Deal Benefit The Consumer?
This is the thing you will be most interested in. How is this Nokia-Microsoft deal going to benefit you, the final consumer? In the short-term it won’t, but in the long-term it will.
So how exactly is this win-win situation for everyone? Microsoft’s acquisition of Nokia will mean that Microsoft will now have a greater control on the smartphones being produced by Nokia.
Considering Microsoft is a tech titan, up-coming Lumia smartphones will have better features overall (if Microsoft decides so). Microsoft also currently has $68 billion in cash which it can use to completely revamp the Lumia series or introduce a new range of smartphones or other tech.
Well, what are your thoughts on the entire Microsoft-Nokia deal?
http://maypalo.com/2013/09/04/why-microsoft-buying-nokia-is-a-win-win-situation-for-everyone/
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