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4 things you need to know about Microsoft's Nokia bid

Al Sacco | Sept. 4, 2013
Microsoft's acquisition of Nokia's devices business marks the end of an era for Nokia, once a leader in the mobile-phone space — and the beginning of another for Microsoft.

BlackBerry is likely looking into a similar sale, but it has something very different to offer along with its handset operations and patent collection: Its enterprise business. Microsoft, with its clear history catering to businesses, seemed a possible BlackBerry buyer, but such a deal is now more unlikely. Microsoft could potentially purchase BlackBerry's enterprise-specific offerings and buy or license patents, but that's less likely than it was just a week ago, thanks to Microsoft's investment in Nokia. In other words, BlackBerry finds itself in an even tougher situation. Not only is it less likely to find a buyer or partner in Microsoft, BlackBerry also now faces a more formidable competitor in Microsoft, which could ramp up its efforts to steal away enterprise customers instead of buying them.

4) Microsoft, 'Dumbphones' and Potential Windows Phone Growth
In addition to Nokia's smartphone-manufacturing operations, Microsoft is also planning to acquire the company's 'dumbphone,' or feature phone, operations. Smartphones are already predominant in the North American market, but feature phones are alive and well in geographic areas where it will be years, if not decades, before wireless technology advances to the point of smartphone ubiquity.

Nokia still sells a whole lot of feature phones, and Microsoft knows this. There's a huge market opportunity for low-end, low-cost devices, and it will be interesting to see where Microsoft goes from here and how (and when) it attempts to transition Nokia's feature-phone business and customers over to Windows Phone devices.

If executed effectively, Microsoft's feature-phone play could prove to be a quiet way to significantly grow Windows Phone market share and customer loyalty outside of North America. Such a strategy wouldn't be enough on its own to make Windows Phone a significant iOS or Android rival, but it could be a new foothold for the OS in areas where Microsoft does not currently have a presence.

It's unclear what exactly the future holds for Microsoft and for Nokia, but if nothing else, today's announcement signals a new charge by Microsoft to challenge Apple and Google and battle back what is clearly an impending mobile duopoly.-


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