Microsoft is paying about $5 billion to buy a majority of Nokia’s cellphone business, while shelling out another $2.17 billion to license the struggling Finnish company’s patent portfolio. And none of this should surprise you.
With this $7.17 billion play, Microsoft has redoubled its efforts to compete with Apple and Google in the smartphone game, nabbing a handset maker that can more closely combine its Windows Phone operating system with the hardware that runs it, and expanding an already massive smartphone-related patent portfolio that can jockey with rivals in other ways. But it has also bought itself the new CEO it so dearly needs: Stephen Elop, the former head of Microsoft’s business division who left Redmond in September 2010 for the top post at Nokia.
Less than two weeks ago, Microsoft chief exec Steve Ballmer announced that he would be stepping down sometime over the next twelve months, and Elop — who becomes a Microsoft executive vice president with the Nokia deal — is now the obvious choice to succeed him.
In the end, Microsoft may lose the smartphone wars, and if Elop graduates to the CEO job, he may fare no better than Ballmer with a company that’s struggling to reinvent itself in the face of so many new challenges to its software kingdom. But this, at least, is the company’s best shot in a world that’s quickly moving from desktops and laptops — Microsoft’s traditional domain — onto smartphones and tablets.
In one sense, Redmond is going against type with its Nokia buy. Traditionally, Microsoft has made software not hardware, wary of competing with the hardware partners that were such a big part of its success in the ’80s and ’90s. But after the rise of Google’s Android mobile operating system and the Apple iPhone, Microsoft must play catch-up, and that means changing its ways.
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Via Chuck Sherwood, Senior Associate, TeleDimensions, Inc