Microsoft tends to acquire many different companies such as Nokia for a variety of different reasons.
So, if you have been a user of Nokia devices in the past, or are just simply interested in learning more about it or Microsoft, you have stumbled across the right article. Keep reading to learn more about why Microsoft purchased Nokia!
Why Did Microsoft Buy Nokia?
1. Microsoft Needed to Keep Its Momentum
The Windows phone only holds a tiny figure when compared to Android.
However, in 2011, IDC predicted that by 2015 the Windows Phone would overtake iOS worldwide, but in 2012 they updated these figures.
These new updates suggested that this overtaking wouldn’t happen until 2016. Microsoft announced that it wanted a 15% market share by 2018.
Meanwhile, figures released state that all Windows Phone sales coming from Nokia products have gone up drastically.
Nokia Windows Phones have gone from zero to 7.4 million units as of September 2013’s most recently reported quarter.
Therefore, it only seems logical that if Microsoft wanted to capitalize on this momentum, although it’s small, purchasing Nokia and taking control of its resources was the best way to go.
2. Microsoft Had the Extra Cash to Buy Nokia
It’s fairly well-known that Microsoft is the richest company in the world, meaning that it nearly has unlimited funds in order to make its company grow even more than it already has.
Microsoft, in order to maintain its success, needs to spend its money before losing it.
3. The Mobile Scene Was Booming and Microsoft Wanted to Take Part in It
Microsoft has always seemed to struggle when getting into the mobile phone game. Clearly, it lacks some necessities for this particular segment.
This reveals yet another reason why Microsoft decided to buy Nokia, and not only is it established, but also produces some high-quality phones for the public.
4. Microsoft Needs to Spend Its Money Before Losing It
As mentioned previously, although it may come as a surprise to many, Microsoft actually needs to spend its money before losing it.
This is because at this time Microsoft was sitting on more than $100 Billion in cash and short-term investments, which in turn becomes a big weight on its balance sheet.
This makes the need to spend its money a great reason to use its money to buy an established company such as Nokia.
5. Products Made by Nokia Are Easy to Reprogram and Repurpose
Unlike other popular brands like Apple, you can customize your Nokia phone and even use your own software.
In contrast, with brands such as Apple, you are confined to whatever is previously programmed onto your phone and there is little room for customization.
Nokia is great for repurposing products that are seemingly no longer any good.
6. Microsoft Is in Competition With Both Google and Apple
If Microsoft didn’t step up and buy Nokia, another well-known company would have.
MS is in competition with some of the most popular brands available on the market today, such as Google and Apple.
No doubt, Microsoft wants to do its best to stay ahead of the game, and if buying Nokia helps it to accomplish that, you can bet it will.
7. Nokia Makes Good Quality Parts
As mentioned previously, Nokia does produce some really great quality parts that make its phones last for what seems like a lifetime.
In fact, some people even found it nearly impossible to break these “brick-like” phones, even if they were trying.
The outstanding quality of these phones is another great reason why a company like Microsoft would be interested in buying the company that was responsible for creating them.
8. Nokia Is an Established Name
As noted earlier, Nokia is a very well-established company that is known for making some great quality and practical devices that withstood the test of time.
The company being so well-established is just another reason why Microsoft would want to buy it, as it would be good for its own company.
9. Collaboration Arises Consumer Interest
As many of us know, when two companies collaborate together, the products that are made become very popular and sell out pretty quickly.
Instead of Microsoft buying Nokia and running it as a sister company, it was almost as if they had collaborated in order for its products to gain more interest.
A collaboration opportunity is another reason that Microsoft wanted to buy Nokia.
To know more, you can also read our posts on why Microsoft bought LinkedIn, why Microsoft bought Minecraft, and why Microsoft bought Activision.
There are so many reasons why Microsoft would decide to buy a small company such as Nokia. One of the biggest reasons is most likely that this company, though it was fairly small, was well established and it has produced some great quality products.
Other very viable reasons are that Microsoft needs to keep its own momentum and needs to keep up with the success of other companies. Not to mention that Microsoft has so much extra cash that needs to get spent in some way.