Will Microsoft Buy RIM or Nokia? Or Build Its Own?
Microsoft has traditionally done very well in the hardware business. I can honestly say I like all Microsoft hardware platforms, from the traditional keyboards and mice all the way to the Xbox. Speaking of Xbox, who would have thought that Microsoft would turn the Xbox into such a success, given the stiff competition from Sony and Nintendo at the time? But the company did it.
Microsoft now faces a new challenge: Its phone and tablet market share is off the charts -- that is, it's literally off the charts. With Microsoft recently announcing that it will be building its own Windows tablet, it begs the question: Will Microsoft buy a company and build tablets and phones? Or will Microsoft follow its traditional, very successful hardware endeavors of building those devices from the ground up?
If they intend to buy, RIM and Nokia are certainly in the forefront of companies that could fit that profile. But what is Microsoft to gain from any of these companies? In the larger scheme of things, not much. Microsoft does not care about the Blackberry OS or Nokia Symbian, and while the hardware from each company is valuable, it may be cheaper for Microsoft to design its devices from scratch rather than port existing designs to Microsoft.
If market share is the logic behind an acqusitions, then both Blackberry's and Nokia's market shares are slipping at rapid rates, so I don't see what point Microsoft would have in acquiring either company from that perspective. That being said, however, I did not see the point of Google acquiring Motorola mobile either, and that happened. So I guess if Microsoft wishes to streamline and jumpstart its position in the tablet and smartphone market, an acquisition might quickly do that for them.
One thing is for certain: Microsoft sees a glaring opportunity in the smartphone and tablet space and I wonder if we are on the eve of seeing an Xphone or Xpad? I strongly believe that in order for Microsoft to give Apple a run for its money, Microsoft will have to control the entire stack. That means hardware and software, and that is the only way to guarantee quality, branding and focus -- that is how Apple appealed to so many.
Google appears to have gotten it and I think Microsoft realizes that while it's historically been very OEM-friendly, in the smartphone and tablet space it will have to take the approach it did with Xbox if it plans on being relevant in the tablet and smartphone space. This is not to say that the company won't OEM Windows RT for ARM-based systems (it has already announced pricing for OEMs, in fact).
So do I think Microsoft will buy RIM? Do I think it will buy Nokia? No on both accounts. I think Microsoft will take the Xbox approach and build it internally. What do you think?
Posted by Elias Khnaser on 06/18/2012 at 12:49 PM