Analysts applaud Microsoft’s purchase of Nokia device and mobile division but warn about future

Chris Millington, UK & Ireland MD at Doro summed up what was on the minds of many commentators this morning after Microsoft announced it had purchased Nokia's mobile and business division for £3.2 billion. "My first reaction is wow – the mobile industry is capable of such incredible change. Whilst this news is not a surprise, it does mean that Microsoft will now have the platform to deliver its mobile strategy. For business users specifically, this really does signal a significant opportunity – especially for Nokia's smartphone offering. However, does it mean the end of Nokia's feature phone business? Will future product development and focus now shift to Microsoft-only smart devices?"

Jason Yeomans, CEO of PMGC Technology, was as enthused. “Never write off Microsoft” he said “I think this is a great move for them. For me there are two things about the deal. Firstly it shows how important it is for technology companies to have the capability to provide services and solutions to a whole host of markets and not just to concentrate on one aspect of technology. Secondly, despite recent criticism of Ballmer’s seeming lack of mobile focus, this deal suggests that Microsoft has in fact got a very clear vision for its future mobile and devices strategy.”

Warwick Business School’s Assistant Professor of Strategy Ronald Klingebiel, who has researched and consulted the telecoms industry for more than a decade, commented “Today’s announcement goes to show that they were onto something: Nokia’s dominance of the Windows phone market suggests that other vendors lost interest. There were also questions over Nokia’s rationale for dropping one unsuccessful Linux system for another unsuccessful proprietary system. In a winner-takes-all market with substantial network effects, especially as regards “appstore” ecosystems, a distant third challenger proved hardly the boost to the business Nokia was hoping for. Some people connected the dots and asked whether Microsoft was really preparing to take over Nokia. This is where we are today."

Telecom analysts CCS Insight on the other hand were a bit more upbeat. Its chief of research, Ben Wood, pointed to some positive points, saying “Acquiring Nokia's devices and services business reshapes Microsoft's business. With the notable exception of Xbox and recent forays into tablets with Microsoft Surface, the company has largely avoided a significant commitment to hardware. That now changes with the transfer of 32,000 Nokia employees into Microsoft. This move should be positive for both companies. A more integrated approach to hardware, software and services will help overcome some of the challenges Nokia and Microsoft have faced operating as independent entities in terms of service integration, marketing consistency and costs, as well as time-to-market for new devices and updates.”