All things digital recently published a story on why “Microsoft might yet need to buy Nokia.” The article itself argues an interesting idea, it gives some valid reasons why an acquisition would be beneficial, but I immediately felt like another viewpoint could be added to the conversation. All things D used an argument by argument approach to give some reasons why Microsoft should buy Nokia, here are some thoughts that could give the brighter side of why Nokia and Microsoft operating individually is a better idea.
All things D: “Windows Phone is still growing very slowly.”
Are they? Nokia and Microsoft have had an amazing last few weeks thanks to the Lumia 800. The phone is “flying off the shelves and not coming back.” But forget that, why is this a reason for Microsoft to buy Nokia? A buyout would add so many unknown variables to the equation that it would be hard to identify the outcome of the operation as positive. If a such a deal were to happen; both companies would be busy doing paper work rather than what they do best: software by Microsoft, and hardware, marketing, and global reach by Nokia.
All Things D: The benefits of the Nokia deal depend on Nokia remaining healthy through the transition
I would argue that Nokia knows best what’s good for Nokia. Nokia is not only smartphones, it’s also many things in between the most basic phone, to the Lumia 800. It is very difficult to conclude that Nokia would be healthier under Microsoft control. Has Microsoft sold phones for the last 2 decades?
All Things D: Aside from Nokia, Microsoft is still getting sloppy seconds
I wouldn’t call the HTC Titan and Samsung Focus S “sloppy.” But I agree to a certain extent that those companies are not fully devoted to Windows Phone. Not a reason for Microsoft to buy Nokia though, HTC and Samsung would still be able to do WP, unless Microsoft stops licensing it. More on that latter.
All Things D: Microsoft would be able to offer truly integrated phones
I wonder what they mean by “truly integrated.” The Lumia 800 seems a pretty well integrated phone. Or is it?
All Things D: Nokia has a huge low-end phone business
All Things D suggests that Microsoft could sell that portion of the business. I don’t see the benefit of taking the part that’s currently generating revenue for Nokia and ripping it apart. They would destroy a reputable brand, and immediately make the company unprofitable.
It seems like what All Things Digital is really suggesting is an exclusivity contract between Nokia and Microsoft. This would be good for both companies because Nokia would not have to care about differentiation anymore, and Microsoft would not have to deal with “sloppy” partners anymore. This would also increase the value, reputation, and exclusivity of Windows Phone. Not to mention it would leave competitors on the uncertain hands of the Android. Would an exclusivity deal be the answer for both companies? I think that needs more consideration than a buyout.