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How Nokia could rescue Microsoft from smartphone oblivion

September 9th, 2013 at 1:00 PM
Microsoft Nokia Merger Analysis

The standard view of Microsoft’s decision to buy out Nokia’s handset business as part of a deal worth $7.2 billion last week was that Microsoft was bailing out a struggling smartphone vendor that was about to go bankrupt. But what if, in the long term, it turns out that Nokia is actually the one that bails out Microsoft? Ben Bajarin at Tech.pinions writes that Nokia has something valuable that Microsoft doesn’t: An understanding of how to design and market mobile devices that consumers want. Given how badly Microsoft bombed with its first attempt at making a tablet, Bajarin thinks the company could really benefit from Nokia’s know-how.

“When it comes to consumers, a demographic Microsoft does not understand, Nokia has been gathering data at a ground level globally about consumer smartphone usage,” he writes. “They have very good relationships with a long list of global carriers who value the Nokia brand and the job Nokia handsets do for them. And they are much closer to the needs of consumers in a mobile world than Microsoft has ever been.”

The big question, of course, is whether Microsoft will tap into this experience or if it will completely rebuild Nokia from the ground up in its own image. If the company takes the longer view and lets Nokia do what it does best, however, Bajarin thinks there’s no reason the merger can’t succeed and help Microsoft gain critical momentum in the global handset market.

“The Microsoft + Nokia deal is certainly one where they are better together than apart,” he concludes. “But if they do turn this around we may look back and realize that it was not Microsoft that saved Nokia but Nokia that saved Microsoft.”

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