A purchase of Nokia\u2019s phone business by Microsoft was announced recently.\u00a0 The massive 7.2 billion purchases are certain to shake up the business and mean big changes for both Microsoft and their customers.\u00a0 The Finnish phone company had been struggling in the smartphone market, having lots of trouble keeping up with the popular models like Apple\u2019s iPhone and the Samsung Galaxy.\u00a0 Nokia switch to the Windows Phone OS two years ago as their primary operating system, so they have had deals with Microsoft in the past.<\/p>\n
Carolina Milanesi, an analyst at Gartner said, \u201cMicrosoft cannot walk away from smartphones, and the hope that other vendors will support Windows Phone is fading fast. So buying Nokia comes at the right time.\u201d\u00a0 Buying Nokia is a smart move for Microsoft fiscally if they plan to stay in the smart phone market.\u00a0 Development and marketing costs leave them with only $10 profit from current Nokia phone sales with the Windows Phone OS, but after the purchase each phone will gain them $40 profit.\u00a0 That increase will add up quickly.\u00a0 Even so, it will still take some time before the company is fully profitable.\u00a0 It takes roughly 50 million smartphone sales a year to break even on production and marketing costs.\u00a0 It will be quite some time before they reach those levels of success, as Nokia\u2019s last quarter only turn out 7.4 million smartphone sales.\u00a0 In 2007 Nokia had 40% of the phone market, now they hold just 15%, only 3% of which are smartphones.<\/p>\n
Nokia CEO Stephen Elop has been chosen to return to Microsoft after leaving the company in 2010.\u00a0 Elop managed Microsofts business software division before leaving.\u00a0 He will now head the \u201cExpanded Devices\u201d unit, alongside Julie Larson-Green, who in July was promoted to head of New Devices.\u00a0 Elop commented on the acquisition saying, \u201cIt\u2019s very clear to me that rationally this is the right step going forward.\u201d<\/p>\n
So what does this mean for consumers?\u00a0 More Windows phones, at better prices.\u00a0 This is really exciting for those of us who work in windows environments, and need to be mobile.\u00a0 Windows phones are great, but there isn\u2019t a lot of options at the moment.\u00a0 With this purchase, Microsoft will be able to produce them at a cheaper cost and have better control over R&D.\u00a0 Those of us who like the feeling of the Windows OS, or the IT staff who like the manageability of Windows devices, should be very happy with this purchase.\u00a0 If Nokia knows how to do anything, it is how to build solid phones.\u00a0 Their recent releases, like the Lumia 920, 928, and 1020 show this to still be true.<\/p>\n","protected":false},"excerpt":{"rendered":"
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