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Why Microsoft is smart to let Nokia launch an Android phone

Published Feb 20th, 2014 11:21AM EST
Nokia Android Phone Microsoft
Image: @evleaks

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It’s no secret that Microsoft is hurting as the world moves to mobile. Sales of Windows Phones are miniscule compared to the competition, and the Surface is small potatoes compared to the iPad. With Satya Nadella as Microsoft’s new CEO, the company would be smart to start selling a “Nokia X” phone running on Android.

The technology world has become essentially reliant on mobile devices for computing needs. What could be done on a desktop 5, 10, or 20 years ago can now be done on a smartphone, with much more power and speed behind it. Though many think of Microsoft as a stodgy old tech dinosaur, it has recently gone through many of its own changes, with CEO Steve Ballmer out, and Bill Gates becoming the company’s “technology advisor.”

In an increasingly mobile world, Microsoft is struggling to stay relevant. Windows is less relevant today than it was 10 years ago, as increasing amounts of computing gets done on mobile devices, with the far majority of them running Apple’s iOS and Google’s Android operating system. Windows Phone, Microsoft’s mobile operating system, has struggled, with just 3% of the smartphone market at the end of the fourth-quarter, according to IDC. That’s up markedly from 2012, when it had 2.6% of the market, but it’s coming off an exceptionally small base.

By contrast, iOS accounted for 17.6% of the smartphone market, and Android accounted for 78.1% of the market.

Under Nadella, Microsoft is going to have to make some really tough calls if it wants to stay relevant, keep investors happy and attract the best talent. Some of those calls may include jettisoning existing divisions, be it Bing or Xbox, but it’s clear something needs to be done with its mobile strategy.

It appears Nadella is all-in on the Nokia transaction, judging by his email to employees. “While the deal is not yet complete, we will welcome to our family Nokia devices and services and the new mobile capabilities they bring us,” Nadella wrote in the note.

If that’s true, than building a phone that uses Android makes sense for several reasons.

Microsoft reportedly earns around $2 billion a year from Android-based royalties. It also gets to say the company is innovating, and it’s not a slave to the past, as it continues to push ideas that aren’t working. If Nadella goes all out and scraps the Windows Phone operating system, it would allow the company to curtail research & development costs, as well, though this seems more far-fetched than anything.

While the strategy may not yield enormous results right away, it’s a start. It’s certainly worked for Samsung, which sells more smartphones than anybody, including Apple.

Chris Ciaccia
Chris Ciaccia Contributing Writer

Chris Ciaccia contributes an expert business perspective to BGR. A former tech reporter at Fox News, Chris was also science and tech editor at the Daily Mail and previously was the tech editor at

Ciaccia has a bachelor’s degree in finance from Seton Hall University.