Microsoft's Nokia acquisition brings fresh legs to mobile race

In this week's Searchlight: Microsoft gets serious about mobile with Nokia acquisition; Android's tasty new OS; the latest NSA jaw-dropper; and more.

Boy, you sure can find some good deals over the Labor Day weekend. Just look at Microsoft. For a mere $7.1 billion, the company bought itself Europe's leading smartphone manufacturer and a chance to stay relevant in a mobile-mad world.

Karen GoulartKaren Goulart

The quick gut reaction of many a blogger about the purchase was "too little, too late" -- not surprisingly, given the tech press's penchant for pommeling all things Microsoft. But the judgment may be too easy, too early.

As Time technology writer Harry McCracken points out, save for Steve Jobs selling NeXT to Apple, tech mergers and acquisitions are pretty much never game changers. If the Nokia acquisition proves even modestly successful for Microsoft, it should be considered a win.

David Talbot of MIT Technology Review goes a step further and suggests the win could be quite significant. Claiming less than 4% of the global smartphone OS market, Microsoft has little to lose but plenty to gain with its Finnish wager.

And, as the wheezing third place runner in the race for smartphone dominance with Android and Apple, Microsoft actually has unique advantages. Among them: Of the three, Redmond's behemoth is best positioned to create a seamless experience across desktops and mobile devices. And while the Nokia acquisition didn't include the purchase of its patents, it did include a ten-year licensing agreement for use of what are generally considered some of the most valuable patents in the wireless industry. Throw in a potential new CEO for Microsoft in Steven Elsop, and $7.1 billion starts to look like a bargain.

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Plus, for all its perceived (Windows 8) and real (Surface) failings of late, or jabs at its departing blustery leader (Microsoft stock went up when Steve Ballmer announced his resignation -- tee-hee), let's not forget that the purchase was made in cash. Even when it stumbles, Microsoft is no ordinary failure. (See: $70 billion annual revenue; $77 billion cash on hand.)

As technology enablers, champions of innovation and customers, CIOs no doubt should find this transaction fun to watch and learn from. Let me know what you think of the deal. This week's lead Searchlight item gives you a gloss.

  • Don't underestimate a company with $7.1 billion to spend and nothing to lose.
  • "They say there's no such thing as bad publicity," but as British Airways might point out, that phrase was popularized long before the rise of social-media shaming.
  • And now for some shaming we can all get behind: a new and decidedly non-tech-centric ad campaign aims to drag patent trolls into the light of mainstream media.
  • Who says government is slow to act? The NSA can read email and other messages before they've had a chance to be encrypted and received a lot of help doing so.
  • Enjoy the sweet flavor of one of the few pieces about Android's new KitKat 4.4 OS that doesn't focus solely on the (admittedly weird and interesting) marketing aspect.
  • It's the end of email as we know it! Again.

Let us know what you think about the story; email Karen Goulart, senior features writer.

This was first published in September 2013

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