By Marty Wolf
Last week, Microsoft (MSFT) announced that it is buying Nokia’s (NOK) Devices & Services business for $5 billion, plus another $2.2 billion for licensing rights to many of Nokia’s patents. Given that the two companies are just two years into a strategic partnership, it raises the question: Why is Microsoft choosing to own when it can rent?
Here’s one possible answer. Microsoft is buying Nokia as a defensive move. Nokia accounts for nearly 82 percent of Windows Phone smartphone shipments and the purchase pre-empted Nokia partnering with Android or filing for bankruptcy. Microsoft simply can't afford to let the #1 manufacturer of smartphones using its Windows Phone platform add new platforms or fail.
Here’s another. Microsoft is buying Nokia’s CEO, Stephen Elop, as Steve Ballmer’s successor. Elop ran Microsoft’s business software division before joining Nokia in 2011 and was the man behind the decision to adopt Windows Phone as the company’s sole smartphone platform. WithRead More »from Will Buying Nokia Lead to the Breakup of Microsoft?