Nokia Gives Microsoft Much More Than Just a Mobile Phone Maker

By Wayne Rash  |  Posted 2013-09-03 Print this article Print

Microsoft is not actually buying Nokia's patents and IP, which are already broadly licensed.

Microsoft is clear in its view of why this is happening at this point in time in a slide show published in conjunction with the announcement. Basically, the acquisition of Nokia's phone business allows Microsoft to pour money into Nokia as a way to help build market share.

This money will go to mobile applications, among other things. While about 160,000 Windows Phone apps are available, this is far behind the number of apps available to Apple and Android users. Microsoft knows as well as anyone that a broad selection of critical apps is a major factor in selling phones.

But there's one strategic reason that Microsoft is taking this step that's not specifically mentioned in any of the announcements. If Microsoft is going to become a devices company, it needs senior executives that really understand mobile devices and have a track record to prove it. This is where Elop comes in.

Stephen Elop is a former Microsoft executive who ran the Microsoft Office team before he went to Nokia to take over the company. It's Elop who caused Nokia to drop its old operating system software and move to Windows Phone, and it's Elop who played a significant role in developing what is generally regarded as extremely well-designed hardware. While any number of people may find fault with Windows Phone (mostly because it's not from Apple or Google), few have found fault with the phone hardware.

While Nokia business continued to struggle in the mobile phone market under Elop, the company was already in dire straits when Elop arrived. There's a general consensus among business analysts that Elop did a lot to keep Nokia afloat.

Right now Elop is slated to become an executive vice president of Microsoft once the deal takes place, but it's hard to see him remaining in that position. While it's not clear that Stephen Elop will take over from Steve Ballmer as the next Microsoft CEO, it's a near certainty that he will have an expanded leadership role at Microsoft.

If Microsoft plans to become the devices and hardware company that Steve Ballmer says it will, then it needs someone like Stephen Elop at or near the top. By buying Nokia's mobile devices division and the people who go with it, Microsoft is accomplishing exactly that.


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