Microsoft's Purchase of Nokia's Phone Business - Implications & Analysis from Juniper Research

Hampshire, UK – 3rd September 2013: Microsoft and Nokia today announced that their companies have decided to enter into a transaction whereby Microsoft will purchase substantially all of Nokia’s Devices & Services business, license Nokia’s patents, and license and use Nokia’s mapping services.

Nokia have always been a major player and iconic brand in the mainstream mobile phone market, having a presence in most regions of the world. However this iconic brand has found it difficult to carry this success over to the high-end smartphone market where Nokia saw a 65% decrease in its smartphone shipments in 2012 compared to 2010.

Juniper Research comments on this recent development:

Implications for Microsoft
• The acquisition by Microsoft reinforces the company’s ‘devices and services’ strategy by purchasing all of Nokia’s Devices & Services business and licensing Nokia’s patents and mapping services. While this acquisition provides Microsoft with a much needed uplift and presence in the mobile sector, integrating these new assets, brand building and increasing market share will be the real challenge.
• Microsoft will get a larger footprint in the emerging markets with Asha as Nokia has committed substantial investment to the Asha range. This means the customer would perceive a switch from Asha to Lumia to be a whole scale upgrade in their entire ecosystem rather than just a smartphone.
• The technical advances in the smartphone ecosystem mean that the mobile device is increasingly a part of the broader CE industry than it has ever been. An acquisition in this area by Microsoft has been viewed by Juniper Research as a key strategy to expand and strengthen their strong mobile and fixed device ecosystem. The company is also expected to move into wearable devices soon.

Implications for Nokia
• Nokia has been struggling to position itself going forward against the likes of Samsung and Apple within the smartphone market. This is by no means a cold acquisition as there is an existing synergy between the two companies.
• This acquisition means that Nokia will now continue to focus only on three areas: network infrastructure and services; HERE (mapping and location services); and Advanced Technologies. Nokia is expected to focus on mapping and geo-spatial services as an “an effective alternative to Google”.
• Juniper Research estimates Nokia’s smartphone shipment market share to be 6% in 2013.


A complimentary ‘Smartphones: Ultra-Premium to Ultra-Economy’ whitepaper is available to download from the Juniper website together with further details of the full report.

Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary.

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