Microsoft Corporation (MSFT) & Nokia Corporation (ADR) (NOK): But, But, But!

Page 1 of 2

Is a Microsoft Corporation (NASDAQ:MSFT) led takeover of Nokia Corporation (ADR) (NYSE:NOK) in the cards? Probably not–with the brightening future of Windows Phones, there’s no longer a pressing need for Microsoft Corporation (NASDAQ:MSFT) to buy the Finnish handset manufacturer.

No longer a pressing issue

There was a time months ago when such a deal made sense. Windows was a fledgling mobile operating system, mired in stagnation, and Nokia Corporation (ADR) (NYSE:NOK) was the only partner truly dedicated to the platform. Microsoft Corporation (NASDAQ:MSFT) needed to ensure that Nokia remained committed to Windows. Buying the company was the best way to ensure that.

Microsoft Corporation (NASDAQ:MSFT)

But times have changed. According to Kantar Worldpanel, Windows is the fastest growing smartphone operating system. Over the last three quarters ended in April, Windows garnered 5.6% of U.S. smartphone sales, up from 3.8% in the previous year.

Windows is also popular among an important demographic–first time smartphone buyers. According to Kantar, of those that bought a Windows phone last year, 52% had switched from a feature phone. With over half of the U.S. market still feature phone owners and many of those expected to upgrade within the next year, Windows is the best positioned to capture that growth.

And while Nokia Corporation (ADR) (NYSE:NOK) is the most important player in the Windows ecosystem today, expect Chinese manufacturers to drive the platform’s growth over the long term. Microsoft Corporation (NASDAQ:MSFT) already has relationships in place with Huawei and ZTE in mobile along with Lenovo as a major partner in the PC space. These allies will give Microsoft the scale needed to challenge Samsung’s and Apple’s dominance.

But, but, but!

Of course there’s an obvious counter arguments to my points above. With Nokia Corporation (ADR) (NYSE:NOK) accounting for four out of five Windows Phones sold, Microsoft Corporation (NASDAQ:MSFT)’s mobile success is still heavily tied to the company. Without Nokia, Microsoft’s “bright prospects” would turn into a devastating downturn.

But while Microsoft Corporation (NASDAQ:MSFT) needs Nokia Corporation (ADR) (NYSE:NOK), Nokia also needs Microsoft. Yes, Nokia could switch to Android, but doing so would create a scramble to build new software and services around these devices. Good luck trying to sell a bare bones Android handset for a premium price in today’s market. Nokia Corporation (ADR) (NYSE:NOK) could delay launching new products until the software is ready, but this would do nothing for Nokia’s sales figures in the short term. And for all of this upheaval, would it really result in selling any more handsets?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!