Despite been having a $1.4 billion impairment loss in Q4 , Nokia is still on track to make a come back to regain its position in the mobile phone markets. If not, then still microsoft is said to be paying $250 minus $15 for each unit of windows mobile phone been shipped by nokia. Yes, you heard it right. Mr Ballmer, is ready to invest billions, in order to make its ailing Windows Mobile OS popular using Nokia as there partner.
Microsoft whose mobile operating system has less coverage compared to the likes of Android and iOS, have make significant moves to grab the market share despite been making losses in its Mobile OS division. Nokia reported to have sold 1 million Lumia devices(windows powered devices) since its launch 2 months back. Also, according to the sources Microsoft has already had snatched a deal with Nokia to use Windows as its default OS in all its upcoming smartphone devices. That means end of symbian OS along the way.
Hence, CEO Steve Ballmer’s willingness to use his biggest weapon–cash. Microsoft’s got a ton of it, $51.7 billion, including short-term investments, to be precise. And it’s becoming increasingly clear that Ballmer will employ that war chest to buy his way into strategic markets where Microsoft has fallen behind. Mobile is about as strategic as it gets right now.
So is it madness for Microsoft to pay Nokia $250 per device to make Windows Phones that might generate as little as $15 each in license fees? Sure, but it’s not the sort of madness that implies lunacy. It’s more in line with Webster’s second definition of the word: “frenzied behavior.” The company’s efforts to become a legit mobile player had better be frenzied, otherwise its cloud ambitions could all but evaporate.