Microsoft buying Nokia is a desperate play at mobile computing.
Unfortunately, the purchase doesn’t add up in terms of common business sense.
Remember, in 2010, when HP bought Palm for $1.2B?
Palm once held 70% of the smartphone market to fall to only 4.9% share at the time that HP bought it and committed to “double down on WebOS.”
Now, fast forward to 2013 and Microsoft is buying Nokia for $7.2B, with a mobile software market share of about 4% combined (compared to their prior Windows desktop operating system market share of over 90%) and ZDNet reporting that it was “double down or quit.”
When HP bought Palm, it was a hardware maker buying software; now with Microsoft buying Nokia, it is the software maker buying the hardware vendor.
But in both cases, it’s the same losing proposition.
In 2010, at the time that HP bought Palm, Stephen Elop was leaving Microsoft to become CEO of Nokia (and in 2011 Nokia made the deal for a “strategic partnership” with Microsoft).
Now in 2013, when Microsoft is buying Nokia, HP has thrown in the towel and just sold off the remnants of Palm O/S to LG Electronics.
Ballmer is right that Apple and Google do not have a permanent monopoly on mobile computing, but purchasing Nokia is not the answer.
Microsoft’s stock is down more than 5% on the day of the merger announcement…and there is more pain to come from this acquisition and Microsoft’s hubris.
Buy more outdated technology, and you’ve bought nothing, but change the culture to innovate, design, and integrate, and you’ve changed your organization’s fortunes. 😉
(Source Photo: Andy Blumenthal)