Home opinion-and-analysis ShawThing What will Microsoft do with Mokia?

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Nokia’s shareholders have overwhelmingly – like 99.52% - approved the sale of the handset business to Microsoft. Now the fun begins.

Opinion: Microsoft is too vast an enterprise to comment on its overall direction, so let’s limit speculation to what it does with – shall we call it Noksoft or Mokia? One thing is for sure – it will not reveal its plans yet – always keep your powder dry in wartime.

Analysts generally agree the deal is a wise move – as much as for Microsoft as Nokia. Microsoft needs to regroup to meet the final long and bloody battle for supremacy with Apple and Google/Samsung/Android on equal terms.

Microsoft is moving to a services, software, and devices business model – as has its two main rivals. It needs its own hardware and ecosystem, which critically and ironically it seems very happy to share with other OEMs. This makes it more open than Android, and much more so than Apple’s walled garden, which seems to get more impenetrable by the minute.

Next year Nokia will have over US$7 billion in its coffers, and about 32,000 fewer mouths to feed. It can restructure for the future, which looks quite bright. Already it has bought Siemens out of NSN.

From Microsoft’s perspective, it gains a dozen or so factories to make any ARM or x86 mobile device, the Lumia brand, Telco relationships, and incredibly valuable patents that it will use to protect and grow its market share. Nokia is currently the second largest handset maker overall (counting feature phones as well as smartphones) at 13.8%, behind Samsung at 25.7% and double Apple’s 6.7%.

Mokia will be content to organically grow its smartphone market share - at the expense of Android and Apple – mainly in the corporate market. It is so far ahead in the BYOD stakes that – providing it does not do anything stupid as it has in the past – it will most likely reach 20% or more market share in mature markets. In emerging markets, it will gradually move Mokia’s Asha handsets to Windows Phone to gain even more traction and market share.

Next it will ready some killer Lumia or Surface branded products – I hope it’s the former – that will morph the smartphone into the tablet into the desktop. These will use a new Windows Phone/RT OS based on Windows 8.x kernel and run on cheaper ARM and Intel Bay Trail Atom processors – all with Microsoft Office as the killer business app.

And finally, Microsoftt will gain a new CEO – not necessarily Nokia’s Stephen Elop – but one that will complete the move from its legacy desktop system via the Windows 8.x strategy gaining the upper hand in all form factors.

Whether it is a war, whether there has to be an absolute victor, whether Samsung defects and joins Windows – it cannot join Apple – are questions we can only speculate on.

One thing I do believe is that Android – while it is king of the heap now – will probably lose more market share than Apple as Mokia gains traction in the mobile and desktop space.


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Ray Shaw

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Ray Shaw ray@im.com.au  has a passion for IT ever since building his first computer in 1980. He is a qualified journalist, hosted a consumer IT based radio program on ABC radio for 10 years, has developed world leading software for the events industry and is smart enough to no longer own a retail computer store!