April 25th Nokia and Microsoft tie the knot but will it make a difference?
By Stephen Pate – Microsoft complete its $7.5 billion acquisition of Nokia’s devices business today. As a long time follower of Microsoft and a recent follower of Nokia, I wonder if it will make a difference.
About half of all IT acquisitions are failures. Different cultures, product mixes and lack of organization will doom great plans. Microsoft bought Great Plains Software (Dynamics) in 2001 for $1.1 billion then neglected the product for a decade. Dynamics ERP and CRM had an advantage in 2001 but it took a decade to become the #2 product behind Salesforce.
Nokia and Microsoft share the Windows Phone platform, ex-Softie and short-term Nokia CEO Stephen Elop as the new division boss but there are big differences between Americans and Finns.
American business is aggressive, wants to win. The culture I’ve seen from Nokia is almost indifferent. Nokia releases products like the Lumia 1520 and 2520 (center of the featured image above) but neglects to get them in distribution. Neither of these models from pre-Christmas 2013 are available in Canada yet and they are hard to find in the USA.
When Apple announces a new iPhone or iPad, you can order it right away and delivery is generally within a month. Samsung’s latest Galaxy devices are store’s inventory on launch day.
By the time Nokia gets any reasonable measure of product to retailers, they and their competitors have moved on. That is one of the reasons Microsoft/Nokia are running far behind Apple and Samsung as 3rd place finishers in the mobile devices market.
Microsoft are slightly better at having new products in inventory but Microsoft marketing is lacking in competitive pricing and promotion. The result is sales of Surface tablets are a statistical anomaly.
Apple sold 26 million iPads in Q1 2014. Samsung sold 14 million Galaxy tablets. Microsoft shipped about 830,000 Surface tablets, according to Business Insider. Microsoft does not reveal the number of Surface tablets sold just the $400 million in revenue.
I’d like to see Microsoft just take off with the Nokia acquisition. Microsoft has the cash, 1 billion customers and Nokia has competitive products and technology. It just does seem likely.
For Microsoft, Nokia’s success or failure is not an issue. The company has a broad line of products and services that are highly profitable. For customers and developers, it will feel lonely for a long time to support Nokia devices.
The official announcement –
Microsoft officially welcomes Nokia Devices and Services business
Microsoft Corp. has announced the completion of its acquisition of Nokia Devices and Services business. The completion of the acquisition marks an important step in bringing these two organisations together as one team, a process that is expected to take 18 to 24 months to complete.
Stephen Elop, former Nokia President and CEO, will serve as executive vice president of Microsoft’s Devices and Studios Group, reporting to Microsoft CEO Satya Nadella. Elop will lead an expanded team made up of Xbox, Xbox Live, Microsoft Studios, Microsoft Hardware, Surface and Nokia Devices and Services.
Microsoft will continue to deliver new value and opportunity, and work closely with a wide range of hardware partners, developers, operators, distributors and retailers, providing platforms, tools, applications and services that enable them to make exceptional devices. With a deeper understanding of hardware and software working as one, the company will strengthen and grow demand for Windows devices overall.
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