The big news in the technology world this week has been the purchase of Nokia's devices unit by Microsoft for $7.17 billion. In the past, Microsoft worked closely with the Finnish phone manufacturer to integrate Windows Phone 8 into Nokia's smartphones, in order to compete with Android and iOS. That partnership has proven ineffective and Microsoft has seen its mobile operating system continue to lag behind its competitors.
As Bloomberg Businessweek notes, the purchase of Nokia suggests that Microsoft plans to be more like Apple in the way it distributes its software. In the past, the battle between Apple and Microsoft represented two distribution philosophies for desktop and notebook devices. Microsoft would license its Windows operating system to hardware manufacturers, rather than building devices itself. The goal was to get Windows on as many machines as possible by giving users more flexibility in terms of pricing and technical specs. By contrast, Apple has always kept OS X and iOS on its own hardware, the logic being that doing so will create a more seamless user experience.
But ever since the advent of smartphones, Google's Android mobile operating system has filled in the role that Microsoft Windows used to play. Rather than limiting its use to Google smartphones such as the Nexus 4, Android can be licensed for any manufacturer's hardware. With Google dominating that share of the market and Apple continuing to produce high-quality, closed-license iPhones and iPad 4 tablets, Microsoft has had some trouble figuring out its role in the surging smartphone marketplace. The company has put out a combination of Microsoft-branded Windows Mobile devices such as the Surface Pro, which sold poorly, while continuing to license its operating system to smartphone manufacturers such as HTC and Nokia. But the lack of focus in one area or the other has left Microsoft in an awkward position with an unclear business model.
By acquiring the hardware expertise of Nokia, Microsoft appears to have chosen to move more in the direction of Apple by focusing on the creation of well integrated hardware and software.
Will the strategy work? It's difficult to say. Apple is already dedicated to this business model, and it's likely that the company's corporate structure reflects this fact. Microsoft is still perceived as a software company, and isn't known for producing sleek, revolutionary devices (and neither, for that matter, is Nokia). Branding and image has become incredibly important in the mobile marketplace, and it will take several successful product launches for the new Microsoft to shed the perception that it is an also-ran device maker.
Demonstrating the importance of image, Microsoft has actually received good reviews for some of its smartphones, tablets and touchscreen laptops. Critics have said that the main problem with Windows Phone products isn't the operating system itself, but rather the lack of third-party apps that add crucial functionality. As we've discussed previously on this blog, the app ecosystem has been critically important to the success of iOS and Android. If Microsoft is unable to attract enough users to Windows Phone, it will have trouble convincing software developers to write programs for the OS (which, in turn, will dissuade customers from switching).
While it may be many years before customers will be able to buy an exceptional Windows smartphone or tablet, the fact is that Apple is already producing sterling mobile and desktop computing solutions that work together seamlessly. Whether it's one of the new MacBook Air laptops or an iPad mini, you can invest in an Apple device knowing that you'll be getting a superb product that will last years. Check out the PortableOne online store for more information on these great devices.