Question

Microsoft Corporation’s acquisition of Nokia Corporation’s devices and services business was seen as a bold but risky gamble in the software giant’s bid for a larger footprint in the fast-growing mobile market. Initially, it relied heavily on a strategic alliance with Nokia, which in 2011 announced that it was embracing Microsoft’s Windows Phone as its main operating system. This partnership produced Lumia, a Windows-based Nokia phone. Nokia got caught in a tough transition from its phones based on its Symbian operating system to Windows-based devices, and this transition has been more painful than Nokia anticipated. Despite the somewhat rocky start to their alliance, in September 2013, Microsoft and Nokia announced that the two companies "have decided to enter into

a transaction whereby Microsoft will purchase substantially all of Nokia’s Devices and Services business, license Nokia’s patents, and license and use Nokia’s mapping services." Experts, the markets, and customers were skeptical. Was Nokia a risky purchase for Microsoft? Based on where Microsoft is today with its phone business, what do you think?

Answer 1

Microsoft's acquisition of Nokia was considered a risky purchase for the software giant as Nokia struggled with the transition from their Symbian operating system to Windows-based devices. Today, Microsoft is facing challenges in the phone business, validating the skepticism surrounding the Nokia purchase.

Step-by-step explanation:

Microsoft's acquisition of Nokia was seen as a risky purchase due to Nokia's difficult transition from their Symbian operating system to Windows-based devices. Initially, the partnership between Microsoft and Nokia produced Lumia, a Windows-based Nokia phone. However, the transition was more challenging than anticipated. Despite the initial skepticism, Microsoft is now struggling in the phone business, indicating that the Nokia purchase was indeed a risky move.