What did Microsoft just buy? Niche Nokia handsets and a War Chest of IP
Our friends in Finland are moving to Redmond. What will be key is what baggage Nokia is bringing over in the shipping containers. Beyond the obvious war chest of intellectual property, patents, insanely good supply chain management, Nokia is also bringing the highest performing Windows handsets with them. Will it be enough to push Microsoft’s hardware game into the extra innings they need?
Nokia’s flagship phones are doing well in the battle for mindshare against Samsung, Apple and the like. For the consumers that are seeking an alternative to the Sam-pple hegemony, Nokia is second only to the HTC One. Our analysis at Argus Insights has shown of the falling fortunes of RIM, LG, and dynamic fluctuations of HTC, have opened opportunities for Nokia. As you can see from the chart above, the low end handsets have similar consumer responses as the low end handsets of LG, Samsung and the rest, while the high end, even the much maligned 42 megapixel Lumia 1020, have solid footholds in the hearts and minds of consumers.
What does this mean for Microsoft? How can they capitalize on Nokia’s strengths? With Googl-Rola finally marching out the Moto X (and despite the gadget community being excited, early consumers, not so much) and Apple’s continued dominance, Microsoft has to deploy a competitive hardware play. While the Surface Pro continues to see uptake by consumers, it has consigned Microsoft hardware to “serious” enterprise users that are trying to get work done. The acquisition of Nokia’s consumer hardware business has the chance to soften Microsoft’s corporate edge for consumers. And Nokia knows hardware. Their supply chain is almost without parallel. Their challenge since the launch of the iPhone has been to understand how to blend software and hardware experiences into a seamless whole. This is the biggest opportunity for the new entity, and if executed correctly, could build out a bright future for both Microsoft and consumers.
