Today marked the end of an era in the mobile handset industry as the acquisition of the devices division of the once-dominant handset vendor Nokia by software giant Microsoft was completed, after the scrutiny of various global regulators caused some delays.
Such a move would have been inconceivable back in 2007, when Microsoft’s worth was only double that of Nokia, but the arrival of the iOS and Android mobile operating systems somewhat ironically damaged Nokia far more than Microsoft, and the US$5.44 billion this acquisition has cost Microsoft represents around a 60th of its current worth.
Now the hard work really begins for Microsoft, which is making its boldest move yet towards becoming a vertical hardware player, adding to established products such as Xbox and Surface. It is presumed that Microsoft acquired Nokia Devices in order to boost its own mobile OS - Windows Phone - but this is far from guaranteed.
Microsoft’s global smartphone OS shipment market share was just 4% in 2013, while Nokia’s share of smartphone shipments last year was and even more modest 3%. Furthermore, Nokia’s last major handset initiative before being acquired - the launch of a range of lower-priced smartphones based on Android, rather than Windows Phone - is hardly a ringing endorsement of its new parent.
Microsoft has made this acquisition because it cannot afford to be marginalised in the post-PC world, but the combined operation still has a very small stake in the mobile market and the publicity photo below, released by Microsoft to mark the event, may indicate it realises there is still a mountain to climb.