2Nokia Isn’t All That Popular
Nokia might have fine brand recognition, but let’s not get too carried away with its actual value to customers. The Nokia brand is by no means popular, and in fact, fails in many ways to appeal to consumer and enterprise needs. That the Nokia brand isn’t viewed so favorably is bad news for Microsoft.
3Nokia’s Feature Phone Business Is Slipping
Microsoft was quick to point out that Nokia’s feature phone business could come in handy as it tries to appeal to emerging markets. But what Microsoft failed to mention is that Nokia’s feature phone business is slipping at the hands of Samsung and low-cost Android handsets Google and its partners are offering around the world. Microsoft shouldn’t bet on emerging markets with Nokia.
4Developers Still Won’t Care
5Third-Party Vendors Can’t Be Happy
6Microsoft Has Promised the Best Experience on Its Own Devices
During a conference call with analysts and the media, Steve Ballmer said that his company will produce the very best experiences on its own devices. That must mean that Nokia handsets will get the best software features and best components. If that comes to fruition, third-party vendors might not like that they’re competing against a company that has a significant advantage, and they have their hands tied behind their backs.
7The Trust Factor Isn’t There
8There’s a High Cost to Nokia’s Devices
Microsoft might be paying $7.1 billion to get its hands on Nokia, but the company must also find a way to see a positive return on that investment. Unfortunately for Microsoft, however, in order to actually break even, it needs to sell 50 million smart devices per year. That figure is nearly double the number of units Nokia ships right now. The very fact that Nokia’s devices are so expensive is a little concerning.
9Google Might Benefit From the Move
10Microsoft Needs to Improve Windows Phone
No matter how many companies Microsoft acquires, it will have no chance if it doesn’t start improving its software. Microsoft’s Windows Phone 8 is a nice upgrade compared with the previous version, but it’s not nearly as appealing to customers as Android or iOS. Microsoft needs to buckle down on software and stop thinking that hardware alone is the answer.
11Hardware Design Is Still a Huge Question Mark
Although Nokia has gotten better about developing hardware, the company is still far behind the iPhone and Samsung’s Galaxy S line. Hardware still matters in mobile, and right now, Nokia is far behind. Unless Microsoft can help Nokia deliver better-looking products, don’t expect much from this relationship.