Microsoft’s acquisition of Nokia for $8 billion could shift players in the mobile war. This move by Microsoft is driven by the desire to drive innovation further and faster in its portfolio of mobile devices. It will also set Microsoft up to be a strong contender in the battle of the smartphones which is good news for businesses.

 

Figure above: Microsoft’s acquisition of Nokia could see it become a strong contender in the mobile war.

Microsoft’s smartphone operating system, Windows Phone, has recorded an average market share of 9.2% in key European markets – comprising of Britain, Germany, France, Italy and Spain. In France and Britain, the operating system achieved a market share of over 10% for the first time in the third quarter of 2013. In Australia, Windows Phone market share increased to 6% in the second quarter of 2013.

The steady increase in market share has been driven by Nokia’s move into the low and mid-range market with Nokia handsets being the main utiliser of the Windows platform. Google’s Android platform remained in the lead with 70.1% market share and Apple’s iOS at 16.1%.

“I believe this acquisition by Microsoft will be a win for organisations looking to provision their employees with mobile devices – particularly those that utilise the Windows operating system for their desktops and laptops,” commented Kareem Tawansi, CEO of software development provider, Solentive Software.

“The Windows Phone operating system provides a good mixture of an open platform that doesn’t lock the user into one hardware type, but still has a level of structure and control where it doesn’t have several version variants, screen sizes and hardware. By absorbing Nokia into Microsoft, hardware and software innovations will be able to occur at a rapid pace and organisations will be able to benefit by aligning their internal IT platforms,” explained Tawansi.

“By removing roadblocks to innovation which can often be hampered by commercial negotiations between two separate organisations, Microsoft will eventually be able to take some of Apple and Google’s market share. The Windows Phone 8 platform has the existing advantages of being open like Android, but it has a neat and unified interface like that of iOS. Furthermore, the live tiles and seamless integration with the Windows 8 desktop platform, facilitates a productive user experience. Of all the platforms, it is the most uniform,” continued Tawansi.

As part of the acquisition terms, Microsoft will gain a 10 year non-exclusive license to Nokia’s library of ideas and technology patents.

“I believe all these factors will enable Microsoft to reach its 15% market share target for its Windows Phone platform in the next 3-5 years as organisations begin to realise the benefits of aligning their internal IT systems through Windows Phone,” predicted Tawansi.

The increasing market share of Windows Phone in overseas markets could be a sign of a similar trend in Australia. Through the acquisition, Microsoft has projected an increase in profits of $2.3 – $4.5 billion by 2018 and smartphone market share of 15%.