While the acquisition of Nokia's devices and services business by Microsoft for $5.57 billion is a "logical step forward" by the latter, it will have limited impact on the smartphone market in the short to medium term, according to Analysys Mason.
Despite having worked hand-in-hand on the Lumia device range for 2.5 years, the firm's principal analyst, Ronan de Renesse, said the purchase will not fundamentally change the Lumia team or its product roadmap for the next 12 months.
Moving forward, he believes Microsoft must device on which mobile business model to adopt.
"The handset market is extremely competitive, making it particularly hard to sustain high margins and make a profit," he said.
"Microsoft has the ability to undercut its competitors and use mobile as a loss leader to gain global reach for its services and software ecosystem. No handset manufacturer except Nokia has been fully committed to Windows Phone platform in the past 12 months."
De Renesse claims Microsoft's key opportunity is in the non-smartphone space, with the organisation set to gain a foothold in developing markets via non-Lumia devices. In 2012, 45.5 per cent of Nokia mobile device shipments went to Greater China, the Middle East, Africa, and Latin America.
De Renesse also suggests it may be time Microsoft abandoned its Windows licensing model in mobile.
Sign up for CIO Asia eNewsletters.