WOW! Microsoft finally made the tough decision to fork over $8 Billion to buy Nokia’s phone business. It is the culmination of what most of the industry expected to happen when the two companies first started to collaborate on the smartphone portfolio in 2011. It gives Microsoft a unified ecosystem to start to seriously compete with Apple and Google in the smartphone market but raises questions over their other partnerships with phone makers such as HTC, Samsung and Huawei.
This is promising news following hot on the heels of the results from the Kantar Worldpanel ComTech sales data for the period May-July, where Windows achieved a respectable 8.2 percent of units across the five major European markets and 11.6 percent in Mexico (the #2 spot). The report from Kantar goes on to say that 42 percent of sales for Windows phone over the past 12 months have come from first time smartphone buyers migrating from their feature phones.
These first time smartphone buyers are clearly a strategic target for Microsoft. The purchase of Nokia will only serve to strengthen their penetration into the market where long-time brand association for these users is firmly entrenched with Nokia on their mobile phones and Microsoft on their PCs. These late adopters will be risk averse and tend to trust the brands they already know. With feature phone users making up more than 50 percent of all mobile phone users globally (according to Kantar), this could be the lightning bolt required to jolt Microsoft into equal footing with Apple and Google in the race for smartphone domination.