Nokia Corporation (ADR) (NOK) Deal Is Good for Microsoft Corporation (MSFT), Isn’t a Game-Changer

While Google’s launch of the Moto X handset signals more exciting times ahead, Apple Inc. (NASDAQ:AAPL) has now gone ahead and launched not one, but two new iPhone models. Nokia Corporation (ADR) (NYSE:NOK), on the other hand, has no impending product launches.

Microsoft also needs to consider Nokia Corporation (ADR) (NYSE:NOK)’s drastic fall in market share in India and China, two of the fastest-growing markets for smartphones. In India, Nokia had been relegated to fourth place, with around 5% of the market at the end of June this year, says IDC . The data reveals Samsung as the clear market leader at 26%, followed by Micromax Mobile at 22% and Karbonn Mobiles at 13%.

In China, Nokia’s market share is not even 1%, as it’s been pushed out by local brands such as Coolpad and Xiaomi. The importance of China, the world’s biggest smartphone market, is evident, as Apple seems to be going all out to grab a bigger share of the market by preparing to strike a deal with the largest local carrier, China Mobile, if recent reports are to be believed.

Foolish final thoughts
Microsoft needed a company like Nokia so it could change strategy in a post-PC world. The deal should consolidate its position in the smartphone race and help it to become a strong hardware manufacturer. However, it’s unlikely to yield the desired results within the targeted time frame.

Microsoft also needs to concentrate more on the Windows OS itself, as the latter’s relative scarcity of apps compared to those for Android and iOS will prove crucial in gaining more market share. At the moment, it probably doesn’t pay to be bullish on Microsoft, but investors would do well to keep a close eye on future developments at the company.

The article Nokia Deal Is Good for Microsoft, Isn’t a Game-Changer originally appeared on Fool.com is written by Subhadeep Ghose.

Subhadeep Ghose has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft.

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