Earlier this month, Microsoft agreed to buy almost all of Nokia's devices and license patents. The transaction is expected to close within the first quarter of 2014, and investors should regard Nokia's ongoing phone strategy as Microsoft's. Nokia may be going through the motions, but for all practical purposes, the new devices are de facto Microsoft products.
Selling tablets has been the nemesis for Hewlett-Packard , BlackBerry and Barnes & Noble . Despite less than tenacious sales of Surface, consumers will soon have another tablet from which to choose.
Microsoft may feel like it's pushing a rock up a hill trying to capture market share from Apple and Amazon in the tablet space, but it does strengthen Microsoft's competitive position with Google .
Every tablet sold grows Microsoft's ecosystem and helps maintain the critical mass of users required to keep a steady flow of new and updated apps. Once BlackBerry lost the enthusiasm of app developers, it was easy to see why consumers picked Android and iPhones over BlackBerry, when given a choice of phones.
I'm not expecting an immediate mass exodus from iPads and Droid-pads over to Windows. For investors, that's OK, because Microsoft (financially) doesn't immediately need to win the tablet war.
With that said, BlackBerry's decision to throw in the towel couldn't come at a better time, particularly with market-dominating 41 MP Windows phones now on sale.
The Nokia Lumia 1020 is an exciting phone for those who want greater picture quality. I love taking pictures on my phone. I have a Canon T4i Camera and it delivers much better pictures than my Samsung S3, but unless I'm going somewhere that requires the need for it, I use my phone. With new and better phones in the pipeline, a Windows-based Nokia phone makes a compelling option.
Microsoft's continued drive to accelerate its lineup of consumer options appears to be the right direction for the company. The new Nokia phones will undoubtedly play well with Microsoft's SkyDrive online office suite, offering to counter Google's online office apps. For outlook and Windows users, SkyDrive has a more familiar look and feel, plus SkyDrive offers greater online storage for free.
The challenge, of course, is to grow market share in a space Microsoft doesn't dominate. Growing from behind isn't exactly new territory, as demonstrated in the last couple years of market-share growth for the Xbox.
If Microsoft's smartphone business grows and becomes a significant participant, Windows' mobile software could turn into a revenue source, not unlike Apple's. We can anticipate continued Microsoft growth through Nokia's Oct. 22 announcement, especially considering BlackBerry's sales are now up for grabs.
At the time of publication the author had no position in any of the stocks mentioned.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.