After years of speculation that it could happen, Microsoft has done it. They have purchased Nokia’s Devices and Services unit to the tune of $7.2 billion (fun fact: that’s less than they paid for Skype). With the deal, Microsoft now controls the biggest manufacturer of Windows Phone devices.
The deal is reminiscent of Google’s acquisition of Motorola, but it is distinctly different. For starters, Motorola was merely one of dozens of Android manufacturers, and it was far from the largest in the world. Nokia, on the other hand, is just about the only manufacturer left working on Windows Phone devices. That’s not necessarily by design, but other third party OEMs have backed off the Windows Phone front in recent months. Then there is the whole patent aspect of the Motorola acquisition, which seemed more important to Google than the actual device manufacturing arm of the company.
Regardless, the merger means that Apple, Google, and Microsoft each now have an element of control in the device manufacturing process. Apple has been controlling their software and device business in tandem for years, and it’s a major reason for the success they are now privy to. Perhaps Google and Microsoft, which have relied on other manufacturers to distribute their software previously, see some value in being more keyed into the hardware side than ever before.
For Microsoft it just makes sense. Nokia is the future of Windows Phone, but Nokia wasn’t going to make it on its own. Nokia needs Microsoft to survive, just as Microsoft needs Nokia if there is any hope of Windows Phone becoming a substantial contender in the smartphone market.
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