For Reasons for Microsoft's acquisition of Nokia: Slow Development of WP Platform

Abstract:
Foreign Media writes today, although the cooperation with Nokia has brought a lot of benefits to Microsoft, but the company may still be necessary buyout Nokia.

The following is the whole article:
The industry generally believe that, Microsoft had acquired all the necessary factors to lead Windows Phone into Nokia intelligent mobile phone when signing the cooperation agreement with Nokia in this year Jaunary.
Although Microsoft provides 1 billion in funding for Nokia in marketing assistance, technical support, and other assistance, compared with acquisition of Nokia, this is just a drop in the bucket. Through this deal, Microsoft makes the mobile phone industry's strategy , who owns the most famous brand focus on itself. However, Microsoft may still need to buy Nokia, the reasons are as follows:

First, Windows Phones's growth rate is still very slow. Although the system was praised, and won the consumer satisfaction, the market share is still far behind Android and iOS. Even Microsoft CEO Steve Ballmer admits, this system does not reach the expected sales.

Second, if they want to get benefits from the cooperation, Nokia needs smooth transition. Nokia has released warning for this year's performance, and it is unclear whether this company can ensure it is still strong in the transition process. Because Microsoft requires a healthy partner.

Third, In addition to Nokia, Microsoft still belongs to the second-class manufactures in eyes of other mobile phone manufactures. Although Samsung and HTC are developing Windows Phone, the majority of the resources are invested in Android System.

Fourth, Microsoft has the ability to provide the real integration of mobile phone. Perhaps it is not easy to open a path between Apple and Android. Microsoft must personally handle all the things, if he doesn't want to offers a variety of equipment.

However, great risk still exists in the deal. The reasons are as follows:

First, Even according to Microsoft 's standards, the transaction cost is still very high. It will be the largest acquisition if Microsoft buyout Nokia successfully, which makes the Skype and Aquantive acquisition be inferior by comparison. Valuation of Nokia reachs billions of dollars.

Second, Nokia has a large number of low-end mobile phone business, and a substantial income is from the functional mobile phones and other inexpensive equipments. Maybe Microsoft will peel off these businesses.

Third, Integration challenges. Although the prisent Nokia CEO is a former Microsoft executive, there are big differences between the two companies. Nokia is inherently a hardware vendor.
This article is first produced from DVD Ripper for Mac Club.