Microsoft decides to go alone on the smart phone market

Nokia sells its device and service business to Microsoft. Together with relevant patents Microsoft pays 5.4 billion US Dollars which corresponds to approximately one quarterly win of Microsoft. This is much less than Google had to pay for Motorola, which was 12.5 billion US Dollars. And Motorola doesn’t even appear in the top ten list of the world. To be frank: now to companies are allied which both could not significantly influence the smartphone market so far.

Even though the price seems to be low, it will take at least four to five years in order to reach the break even. Microsoft wants to increase the win per phone from currently 10 US $ to more than 40 US $, so more than 135 million smartphones have to be sold. Currently only about 50 million smartphones are sold per year by Nokia, hence this will already take at least 3 years to reach the break even, and this does not take into account the 1.65 billion US $ (from the 5.4 billion) which are the patents.

And the apps are still missing. There is in fact a large developer community for Microsoft products, however, not for smartphones and apps. And also the tablets are still not really well established on the market. Microsoft will do it now all alone. Competitor Google goes the way of an alliance: Google develops the OS, Samsung provides the hardware and Motorola delivers the ideas.

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