With possible Nokia deal, Microsoft could try to become the next Apple
Apple, a company many said had repeatedly delayed the development and launch of the iPhone for fear that it might cannibalize its iPod business, is now a “mobile devices company” with a smartphone that is undoubtedly its flagship device. Chief Executive Steve Jobs and Chief Operating Officer Tim Cook have both publicly acknowledged this major transition on several occasions, including on stage while unveiling the iPad and on earnings calls while speaking with analysts. Apple is growing at an unheard of pace and stockpiling mountains of cash, all thanks to its mobile business. Personal Computers, Apple’s core business for nearly 30 years, now play second fiddle to the company’s mobile devices in terms of both revenue and mind share. On the other side of the table, old rival Microsoft is doing all it can to regain its footing in the mobile space after letting its Windows Mobile platform grow stale and moldy. Windows Mobile’s replacement, Windows Phone, is still in its infancy but early reports have suggested adoption has been slow at best. So where does Microsoft go from here?
The Internet erupted following our report covering industry insider Eldar Murtazin’s claim that Microsoft has struck a deal to purchase Nokia’s cell phone business for $19 billion. Murtazin has a long track record of solid Nokia scoops, and he was the first person to report that the Finnish phone maker would adopt Microsoft’s Windows Phone platform for its smartphones starting later this year. While his new claim is anything but confirmed, it’s not as far fetched as some might think. In fact, a deal to dump Nokia’s phone business could actually be considered a continuation of former Nokia CEO Olli-Pekka Kallasvuo vision.
The ex-Nokia chief lead a major reorganization that began several years ago in an effort to transition the company away from being a devices company. Instead, Kallasvuo believed Nokia’s future was in software and services. Subsequent acquisitions of companies like Navteq and the eventual launch of Nokia’s Ovi suite would set the phone maker on this new course, but the transition came at a time when the company’s smartphones were leapfrogged by Android and iOS devices, and revenue began to sink along with the firm’s market share.
But perhaps Nokia was on the right track. Perhaps Kallasvuo’s vision of Nokia as a software company is shared by new CEO Stephen Elop, who some pundits believe was brought on board solely to preside over a union with Microsoft, his former employer. Those pundits were painted as conspiracy theorists until Nokia announced this past February that it would adopt Windows Phone as its smartphone platform of the future. Was that deal just the beginning? It’s not so crazy to imagine a role reversal of sorts, where Microsoft could orchestrate the bigger picture while Nokia supplies the software and services that power the Windows Phone platform. Plenty of companies have built monstrous businesses by supplying software to hardware makers — one such company, of course, is Microsoft.
But Microsoft is a different story right now. It is a PC OS company at its core, and therein lies the problem: the PC OS business isn’t what it used to be. As such, Microsoft has spent a considerable amount of time and resources fanning out its software and service portfolio in order to spread out its net. It’s doing a good job, all things considered, but one company found a better path to take not long ago. That company is Apple, and that path is mobile.
It would certainly be quite an interesting piece of irony. For years, Apple nipped at Microsoft’s heels while chasing the Redmond-based giant’s computer business. Then in 2007, Apple planted seeds that would sprout into one of the most successful technology ventures of recent history: iOS. The iPhone, the iPad, the iPod touch… a trio of mobile devices that have made Apple one of the biggest technology companies in the world.
Apple spent decades trying to become the next Microsoft. Now, from atop a mountain of mobile devices, Apple may finally be able to sit and watch while Microsoft tries to become the next Apple.
This post originally appeared on BGR.com