Why Microsoft wants to buy Nokia?

On Monday, September 2, 2013, Microsoft announced it is going to buy Nokia for 7.2 billion dollars. The news came as a surprise to many economists and technologist. As until Monday they were thinking Microsoft is trying to get hold of the software business. But as Microsoft it self states - as Microsoft explains: “Success in phones is important to success in tablets… Success in tablets will help PCs”.

By the statement we can make a guess that why Microsoft is so eager to buy nokia. Here, we have made some points that suggest why Microsoft wants to buy Nokia.

Until now Microsoft is a software company. Except for its tablet pc ‘Surface’ Microsoft has produced no hardware of its own. Microsoft’s windows phone software is used in Nokia mobile devices. As a matter of fact, only Nokia is permitted to use Microsoft’s windows phone software according to an agreement. But windows phone share in the mobile market was less than 2%. Recently we saw that Black berry is going down the drain. Its flag ship phone failed drastically in the American as well as the world mobile market.

A threat to Microsoft:

Microsoft predicted that this could also happen to it. So, its CEO started forming a strategy to save its future in the smart phone business. The best way was to start introducing its own smart phones like Google is doing, or take example of Apple.

Microsoft is good at buying:

But according to human psychology, public relies more on those devices that are in the market from some time. And Microsoft is not in the market as a ‘device seller’. So, that idea would not have worked. Second idea was to buy a mobile maker brand name and use it for its own purpose.

As Microsoft is good with buying and selling, it offered Nokia to buy and the deal went through on 3 Sep.

Devices and services:

As we have already told earlier, Microsoft wants to protect its identity in the technological hub. And it reminds us of the Charles Darwin theory ‘Survival of the fittest’. Microsoft is thinking to enter the world of mobile making. Now as it will be buying Nokia, it will be able to produce its own devices. These devices will not only be limited to smart phones and tabs, but will also be able to use Nokia devices as personal computers.

Going 3^rd in Mobile Wars:

By buying Nokia, Microsoft will become the third biggest seller of smart phones and mobile phones. This is not only the ticket for Microsoft to save itself but will also bring it in the leading mobile networks.

What we can predict by this merger is that mobile competition that is between IOS and Android today will become a triangle with the addition of one new member. This may help in decrease in smart phone prices and more focus on better services.

Google & Apple – Welcome the new hybrid:

Microsoft will become the new hybrid. It will produce its own devices as well as provide customer support and service software for the same product. Until now, Google is one hybrid that has its own mobile software called android and it recently jumped in the laptop business and also produces its own Google mobiles under the name of Motorola.

While, Apple is an old sport, it produces its own hardware as well as software. It’s been in the market for quite some time and is the first one to introduce Iphone and tablets.

What Microsoft wants to do?

Microsoft was falling behind in the race of software. More people now use smart phones. Websites, mobile applications and games are being developed for mobile devices. These are impacting the personal computers and now the trend is changing. Microsoft’s windows mobile operating system is only taking 2% of the market share. This percent is too low to keep a company in the business. At the same time by becoming the third biggest share holder. Microsoft will be able to surpass Google and Apple in the near future.

Google considers itself the data giant. It likes to keep data of everyone on its servers. Microsoft recently tried to become a data collector by its Xbox One policy implementation. But it discarded it later, because of user protests.

Now it’s a Triopoly:

The monopoly in industries is just like the international politics. Some times the world is Unipolar, sometimes Bipolar and sometimes it becomes Multipolar.

Multi national companies act in the same way. The duopoly of Apple and Google in the mobile operating system or the duopoly of Apple and Samsung in the mobile devices is a clear example for us. But the duopoly of Apple and Google is now changing to triopoly of Apple, Microsoft and Google.

A look in the Near Future:

Most of the company giants are near to being closed. We can say only those companies can survive in the future who are converting to hybrids and are able to get large share of the market.