I don’t own Nokia stock – nor do I work there, but I’ve been shocked with the news about Nokia bending over to Microsoft. Though we do not yet know the details of the strategic partnership it is quite easy to say that this was an excellent deal to Microsoft and rather bleak situation for Nokia.
Only way to really make sense of this all for me is to watch it from large institutional investor perspective and see that by putting assets in Nokia and Microsoft together, you can create third candidate to compete against Apple and Google in the mobile ecosystems and media consumption world. And even though if putting these two assets together would destroy billions of dollars of value in Nokia, in the big picture it could be worthwhile.
This could be potentially good news for operators, media companies and publishers – who want to get leverage against Apple and Google in tough negotiations in the future. Whether it is movies, music, software or games – Nokia hardware, Microsoft operating system and shared ecosystem can be a serious contender if Microsoft is willing to burn money to make it a reality. They sort of succeeded it with Xbox 360 ( + live ).
Microsoft gets finnish mobile knowhow, decades of experience with mobile development and Nokia’s existing contacts and global reach to push Windows Mobile. Nokia’s knowhow and services also nicely complement the Windows Mobile ecosystem with some missing pieces.
Similarly for Nokia this is interesting opportunity to share future R&D and marketing costs together with Microsoft.
And if everything goes well, Nokia can benefit from the large scale success of Microsoft.
I really do hope there is something more to this than meets the eye.