We have mentioned in other posts, that we are fans of Microsoft products. The Nokia acquisition looks like a win for Microsoft; they are adding to the momentum of Windows phone. Anything that they can do to increase that momentum, they should do – and do with vigor. This purchase makes the base stronger for Windows phone and is another step in the right direction for the Windows Platform.

However, the Nokia purchase does not solve certain app issues that Microsoft still needs to deal with. The Nokia deal does not threaten Samsung in any way. The only way for Microsoft to truly make headway against Samsung, is to solve the app issues. These issues go beyond just the number of apps; no one has truly solved the problem of helping users optimize their devices. App discovery is just too hard; and tablets, in particular, are not optimized.

Nokia is the number one seller of Windows phones, so this ensures that will Nokia’s success will continue and hopefully grow. Other device makers can continue to make Windows phones – just like in the old days when IBM made a desktop computers, but other companies did also.

If you are interested in a Windows phone, click here.

Microsoft needs to have one brand and a consistent user interface experience, across all devices. That is what it means to be a platform. By controlling the phone’s UI, Microsoft moves closer to that goal. The ultimate realization of this are about apps – having apps that a user can run across all his devices is so important. Ubuntu might be the most polished so far in this regard. Microsoft needs to do more in terms of the app discovery process for users, and for a consistent UI.

Nokia still sells more feature phones than Windows smartphones, so it would behoove microsoft to bring out better software and apps for feature phones. There are browsers now that allow a feature phone to do facebook and other web functions, by making extensive use of texting as a background process. If Microsoft got behind that kind of software, it would be huge for them; so once again, its about apps.

The deal still has to be approved by Nokia shareholders.

It is estimated that before the deal, Microsoft earned $10 per Windows phone sold; but with Nokia in the fold, Microsoft will earn an estimated $40 per phone. That is a huge increase. Remember, reliable profit is all about margins; Apple has the highest margins in the industry. It is a much more precarious position to have small margins (like the 5% or so average margin on desktop pc’s); any downturn in a market hurts the small-margin companies much more.

The Nokia purchase is a form of insurance. It ensures the Windows phone brand will continue, even if all other manufacturers drop out. So its a smart move on Microsoft’s part.

What Microsoft has not yet fully solved is what I call the app discovery problem; people want and need to optimize their devices. We need better app discovery tools, especially on tablets. This is an opportunity of enormous size – and if Microsoft solved it, then it would fuel sales of their mobile devices (both phones, and tablets).

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Filed under: App DiscoveryAppsMicrosoftNokiaTablet AppsTabletsUbuntu

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