Roozgaar News
In a last-ditch effort to catch the mobile-device wave that Apple (AAPL) and Google (GOOG) are riding, Microsoft is making a $7.2 billion bet on Finnish phone company Nokia.
Several analysts said the agreement announced late Monday to buy most of Nokia makes sense for the Redmond, Wash., corporation. Given time and Microsoft’s enormous financial reserves, they said, the deal could pose a serious threat to other
gadget makers, especially Apple, which has seen its sales slow and reputation for innovation questioned.
“The idea that Nokia is going to have reserves that eclipse Apple’s would certainly concern me if I were Tim Cook,” said tech analyst Rob Enderle, referring to the Cupertino company’s CEO.
Microsoft will be diving into a hardware business dominated by Apple and phone makers using Google’s Android operating system. Together, they control more than 90 percent of the smartphone market. But Microsoft is a tech titan in its own right, with nearly $80 billion in annual sales, the widely popular Internet communications service Skype, and software that runs millions of personal computers.
Under the deal, which is expected to be completed in the first quarter of next year pending approval by Nokia’s shareholders, Microsoft will buy the Finnish company’s phone business and license its patents. That should be a good fit for Microsoft, some analysts believe, because Nokia’s phones already use Windows. Moreover, they said, it will allow Microsoft to control the production of those phones from beginning to end, emulating how Apple makes its mobile gadgets.
Still, experts said it could take years for Microsoft to significantly boost Nokia’s sales. Moreover, some cautioned that the deal could worsen Microsoft’s relationship with companies like Hewlett-Packard (HPQ), because it would pit Microsoft’s devices against those from HP and other firms that use Microsoft’s Windows software in their products.
In a last-ditch effort to catch the mobile-device wave that Apple (AAPL) and Google (GOOG) are riding, Microsoft is making a $7.2 billion bet on Finnish phone company Nokia.
Several analysts said the agreement announced late Monday to buy most of Nokia makes sense for the Redmond, Wash., corporation. Given time and Microsoft’s enormous financial reserves, they said, the deal could pose a serious threat to other
gadget makers, especially Apple, which has seen its sales slow and reputation for innovation questioned.
“The idea that Nokia is going to have reserves that eclipse Apple’s would certainly concern me if I were Tim Cook,” said tech analyst Rob Enderle, referring to the Cupertino company’s CEO.
Microsoft will be diving into a hardware business dominated by Apple and phone makers using Google’s Android operating system. Together, they control more than 90 percent of the smartphone market. But Microsoft is a tech titan in its own right, with nearly $80 billion in annual sales, the widely popular Internet communications service Skype, and software that runs millions of personal computers.
Under the deal, which is expected to be completed in the first quarter of next year pending approval by Nokia’s shareholders, Microsoft will buy the Finnish company’s phone business and license its patents. That should be a good fit for Microsoft, some analysts believe, because Nokia’s phones already use Windows. Moreover, they said, it will allow Microsoft to control the production of those phones from beginning to end, emulating how Apple makes its mobile gadgets.
Still, experts said it could take years for Microsoft to significantly boost Nokia’s sales. Moreover, some cautioned that the deal could worsen Microsoft’s relationship with companies like Hewlett-Packard (HPQ), because it would pit Microsoft’s devices against those from HP and other firms that use Microsoft’s Windows software in their products.
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