John Paczkowski

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Microsoft Explains the Rationale Behind the Nokia Deal

MSFT_Nokia

Microsoft is spending $7.17 billion to acquire Nokia’s devices and services business and license the company’s mapping services, a move that CEO Steve Ballmer characterizes as “a bold step into the future.”

Yet Nokia is hardly the mobile-phone juggernaut it once was, having fallen far behind Samsung and Apple in the smartphone race. What was Microsoft’s rationale for buying its devices and services business?

The company addresses that question in the presentation below. Among its answers:

• To accelerate its share and profits in phones

• To create a first-rate Microsoft phone experience for its users

• To prevent Google and Apple from foreclosing app innovation, integration, distribution and economics

• To avail itself of an outsized financial opportunity fueled by growth in smartphone business

Here’s the full presentation:


StrategicRationale

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work