Microsoft acquires Nokia's phone business

Almost a year back I wrote about Nokia’s chances of a possible revival. However, the just announced acquisition of Nokia’s mobile business by Microsoft came as a total shocker. It was a parting shot by  Microsoft CEO Steve Ballmer to the tech world. After a somewhat turbulent 13-year run,  Ballmer is to retire from Microsoft . Ballmer’s  attempts in the past to get his hands on mobile device business has been disastrous. With the acquisition of Nokia’s mobile business, I hope Ballmer has not put the final nail in Nokia’s phone handset coffin.

Back in 2007, an eccentric Ballmer had pooh-poohed Apple’s entry into mobile phone business.  His take was that apple phone was priced heavily and it did not have a key board for handling emails. The success of the iPhone had proved Ballmer wrong. Yes, Apple iPhone was priced heavily but Apple proved that every cent spent on an iPhone was worth it and consumers did not care about the price if the product was filled with innovative technology and ease of use. And with a plethora of apps to download from Apple app store , the Apple gadget demonstrated boundless capabilities. Ballmer in his 13 years tenure as CEO failed to capitalize on several new consumer technologies and lost out to Google and Apple.

With the acquisition of Nokia phone business, Stephen Elop, the Nokia chief executive who was hired from Microsoft in 2010 will transfer back to his former employer. Elop entered Nokia like a trojan and as a first step steered Nokia’s adoption of windows mobile software in its Lumia range. A bold step by Elop but with just about 4% market share in phone software, windows mobile software just did not make the cut. To Microsoft and Ballmer it was a desperate attempt to establish a foot print in the mobile business. We all know Microsoft could not make a mark in the gadget segment beyond its successful Xbox game consoles. However it did make sense to Nokia especially when it was struggling under huge financial losses.

Finland’s greatest success story is over and finns are trying to make sense of what’s left with some even vowing to switch to a rival phone such as Samsung. You can’t blame them. At its peak in 2000, Nokia generated 4% of Finland’s gross domestic product and Nokia was a national pride.

Could this deal be similar to the failed takeover of Palm by HP? Could Microsoft pull off a surprise with new innovations on Nokia phones? Only time will tell. Let us wait and watch.