The Hidden Risk in Microsoft Corporation (MSFT)’s Nokia Corporation (ADR) (NOK) Purchase

While that’s certainly true, Microsoft’s decision to double down on hardware risks pushing OEMs away from its other operating system, Windows itself. Microsoft’s hardware partners have openly criticized its hardware strategy in the past; committing to it seems likely to only anger them further.

Last year, in regards to Microsoft’s Surface tablet, Acer’s CEO JT Wang publicly urged Microsoft to “think twice” about getting into hardware. Wang argued that by building its own hardware, Microsoft was going to hurt the overall ecosystem.

Hewlett-Packard, too, has distanced itself from Windows. In an earnings call back in May, CEO Meg Whitman avoided mentioning Windows directly; last month, she emphasized HP’s commitment to “multiple” operating systems.

Google’s alternative operating systems
But “multiple” operating systems really just means Google’s. This year, HP has cozied up to the search giant, releasing three major devices running Google’s operating systems. The Slate 7 and SlateBook x2 run Android; HP’s Chromebook runs the popular Chrome OS.

Acer has been Google’s partner for quite a while; its Chromebook was one of the first on the market, and it’s been making Android tablets for quite some time. Acer is even planning a Chromebox (a desktop running Chrome OS) that could cost just $99.

Obviously, neither Android nor Chrome can completely replace Windows right now or in the near-future; but longer-term, OEMs might be eager to make them work.

Nokia could cost a lot more than $7.17 billion
In the end, Microsoft Corporation (NASDAQ:MSFT)’s decision to buy Nokia could cost the company a lot more than the $7.17 billion it paid.

By bringing Nokia Corporation (ADR) (NYSE:NOK)’s handset division into the larger Microsoft corporation, the Windows-maker is affirming its commitment to making its own devices. Unfortunately, that decision could alienate its hardware partners, driving them into the arms of Google. Although Windows remains a necessity for many PC users (for now), OEMs could be heavily incentivized to change that.

The article The Hidden Risk in Microsoft’s Nokia Purchase originally appeared on Fool.com and is written by Sam Mattera.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft.

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