What Microsoft buying Nokia means for Apple

Last night Microsoft announced they intended to buy or license all the parts of Nokia's mobile business that matter. That will either make them a vertically integrated player in the smartphone business like Apple or BlackBerry, or the stewards of some janky Franken-licensed business like Google and Motorola, or more likely, something in between. So what does that mean for Apple, and for the iPhone and iPod business?

  • There are a lot of Microsoft products that people want on mobile. Windows isn't one of them. Rather than a beachhead, it's proven to be a barrier. Unless and until Microsoft understands that, it makes no difference whether Nokia's phones (and tablets) are first or third party.
  • Nokia helped Microsoft attain more marketshare than they likely would have otherwise. It's unclear what, if anything, Windows Phone helped Nokia attain other than a cleaner demise for Symbian and Meego.
  • If there's any room on the shelves between Apple and Samsung, it's going to other Android devices, not other operating systems. The third option is "Droid" in Verizon's case, not Windows Phone.
  • Microsoft buying Nokia isn't Apple buying NeXT. Steve Jobs and the influx of talent from the NeXT team reshaped Apple culture as much as OS X did its computers. Stephen Elop and Nokia haven't shown anything that could "fix" what's been ailing Microsoft in the consumer space.
  • Indeed, Elop is Microsoft culture. He left Microsoft for Nokia, greatly reduced the value of the company, and is now selling it back to Microsoft for a steal.
  • Not every company needs to be, or should even want to be Apple. Consumer electronics is sexy and it gets the headlines, but it's only one facet of technology. This purchase smacks of Microsoft once again feeling inferior to Apple, for no good reason, and doing what Apple does rather than being who Microsoft is.

So, in short, while you can never rule out any company as talented and wealthy as Microsoft, when it comes to how it will affect Apple, the iPhone, and the iPad, the sad answer is about as much as HP buying Palm did.

We'll have ongoing coverage of everything related to the Microsoft/Nokia sale at our sibling site, Windows Phone Central.

Have something to say about this story? Leave a comment! Need help with something else? Ask in our forums!

Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

What Microsoft buying Nokia means for Apple


Less competition, if anything. Microsoft's other would-be Windows Phone hardware partners will leave the sinking ship for Android. They're all second-class citizens to Nokia now.

HTC might completely exit the mobile handset market because they'll get little attention from Microsoft. And because Samsung has killed off all other Android handset makers with their multi-billion dollar marketing budget.

Of course, none of that will affect Apple much. They're already making and selling as many iPhones as they can. And they'll continue to do so. And yes, consumers will love it.

Probably the biggest implication of this deal I can think of is that Microsoft will hold off on Office for iOS for another year. If the Nokia Windows phones are still only a small segment of the market and the shareholders are pushing Microsoft for another cash cow after that, then we might see them finally release it.

It's not always about Apple...anymore. They are not a major factor when it comes to making these types of decisions. Are they a consideration? Maybe. But the reason for making these types of moves? No. You don't spend billions to compete with a phone that's released every two years with minor changes. Apple is like the Tiger Woods of golf, no longer feared.

It's about the current enemy of Microsoft: Google, and now Motolora, with a healthy dose of Samsung thrown in. Those entities factor into making decisions that will make or break your company.

I should add too that trying to do what Apple does is futile. There's no company that can do what Apple does and still be successful like they are. Even with their shrinking market share, they will sell a ton of iPhones in a couple weeks.

Microsoft said a while back it wanted to become a devices company. Who knew they'd do it by purchasing a devices company? That shows they don't have any confidence in their own internal development, and rightfully so. The existing partnership with Nokia should've been enough.

For as much as Ballmer says he hates Apple, he wants to be them an awful lot. Microsoft should focus on going its own way rather than emulating a business model it doesn't even seem to fully understand or appreciate.

Spot on Rene. Another sad fumble in the dark, can only lead to the continued decline and ultimate irrelevance of Microsoft. Shame and shame on the board of Microsoft.

You know the snark factor is turned up way high on all the other sites AC and Imore included. I get that everyone wants to take their shot at this. Once though you all settle down this becomes a much bigger problem for everyone. Nokia as a company was failing no doubt about it Very much like RIM. Now with it's future assured I fear what we will see from them will kinda blow the doors off of everyone. M$ is saying WE ARE SERIOUS about WP8.

Laugh all you like 2014 is going to be a very interesting time in the mobile space. Positions are GOING to shift. So they all better be on their toes.

No snarking intended! The world would be a better place with a focussed and proactive Microsoft. I'm not a gamer so I can't comment on the world of Xbox but Office is the only thing holding their position and they are making a pigs-ear of Office 365....... I truly hope you are right but I stand by my view that we are witnessing their continuing decline and I only fear it will accelerate with this further distraction from their core strengths. It is common problem with once great companies (and people)!

None of us have the the capacity to look into the future and determine if a decision made today will payoff. To say "So, in short, while you can never rule out any company as talented and wealthy as Microsoft, when it comes to how it will affect Apple, the iPhone, and the iPad, the sad answer is about as much as HP buying Palm did" comes across a little arrogant. Apple should consider this event as a serious move and make sure that they counter move w/ whatever they feel will continue to provide them a competitive edge. I have no doubt that Apple regrets its complacency when Android was still just a fledgling OS.

This juvenile talk is as if there is some war going on between Microsoft and Apple. We all need great products from whosoever can produce them (that includes Samsung and Google). Great products come from great people and companies focussed on a clear vision and not distracted by pettiness towards competitors. Microsoft has strengths, it's failing is that it doesn't act like it knows what they are, or has anybody at the helm that's going to figure it out soon.

As much as we want to believe this. The sad fact is people are still just as juvenile as they were when they were that age. They just hide it better. It's because these people have such big egos that we see these products. We all want to be on top, that's just human nature. Saying that though there is a danger of falling into the trap of pettiness you mentioned. I just hope they keep their eye on the ball.

I love apple just as much as the next person but this article is ridiculous. Look at it for what it is. get out of the iPhone bubble. This is a major incident in the computing world. WP8 has been gaining found through out the world minus North America.

It means very little to be honest. As Rene alludes to, MS has to figure out what it wants to be first. Apple like, or some weird model of being a hardware maker while being committed to other competitors. The latter makes no sense.

MS is still going the wrong way with windows, office, and xbox. It's hard then to take their attempt to become relevant in mobile seriously. It may be safe to say that these phone and tablet efforts have only hurt their core businesses while causing the company to veer off track.

Chill down guys. Let's wait and see how Microsoft and Nokia fare through their troubled waters. Then, we pass on our own verdicts. This is really an interesting turnaround. :)

Stockholders and analysts don't agree with you Rene.

Windows Phone is not the failure you claim, at least not yet. They are making steady gains in marketshare and sales while the ecosystem continues to develop nicely.

Microsoft still doesn't have the mindshare of Apple in the mobile consumer world, but they have a much more diverse and complete portfolio of products and services. It's a solid long-term strategy. Apple's strategy, on the other hand, still seems to be centered on selling a very limited selection of hardware at high profit margins. And as we speak Samsung is preparing to release Tizen, which they hope will be a unifying OS for all their "smart" products. You can bet Apple has taken notice, they would be fools not to.

What Microsoft buying Nokia means for Apple?

It means Microsoft just wasted another $7.2B and that much poorer!

On the same note, here what I would do if I were S.B.! I would shutdown the whole me too me too smartphone business and use the cash and resources and try to come up with some new and original stuff.

Yep .... LOL

Yep. And Apple's should definately shut down their "me-too" computer business, which their phone business is quickly starting to emulate.

Surface was a hint and Nokia is the confirmation of what Microsoft has learned: the future of computing is integrated ecosystems. Partnerships were the past. For mobile, Microsoft will not be doing partnerships. For PCs, we'll see; but if I were HP and Lenovo, I'd be looking at diversification.

Microsoft's strategy under Steve Ballmer has been to copy whatever moves Apple makes:

Apple has a success with the iPod, Microsoft brings out their version called Zune... which fails.

Apple has a success with the iPhone, Microsoft brings out their version called Kin... which fails.

Apple has a success with the iOS, Microsoft brings out their version called Windows Phone... which fails.

Apple has a success with the Apple Stores, Microsoft brings out their version called Microsoft Stores... which fails.

Apple has a success with the iPad, Microsoft brings out their version called Surface... which fails.

Etc., etc., etc.

The problem is that Microsoft and Apple are two entirely different companies. Microsoft might as well be trying to copy a car company, or utility company.

What Microsoft should be following is IBM, which sold off its failing consumer divisions, and focused on its strong business software and hardware lines.

i wouldnt call windows phone a failure its actually picking up market share in multiple countries minue the united states because of the mentality it has. but id say that windows 8 windows phone 8 xbox one and windows RT are all very good products that should speak to certain demographics. i think it just comes down to the fact that everyone knows microsoft is the company that everyone loves to hate. i think personally that this was a good move and the right decision for both companies and i think that until we see the outcome of this purchase for microsoft and the license deals with nokia we shouldnt really speculate.

Yeah, sure, it's all about copying Apple. That explains Xbox, Azure, Bing, Windows 8, Lync, etc, etc, etc. Microsoft's revenue almost tripled under Ballmer.

Ballmer wasn't a great CEO by many measures, but I'm pretty sure it's a good thing he didn't consider your advice.

Many of us didn't predict this happening, we expected it to happen and it was only a matter of time before it took place.

I'd say, wonder how long before makers like Samsung, HTC etc all drop Windows Phone as an operating system for hand sets and look elsewhere for a secondary OS to vend. Why keep compete with Nokia when they have the backing of Microsoft and...

...Microsoft are now able to work on future generations of Windows Phone to be more centric with Nokia designed phones.

You may say, But... Google own Motorola! If you look, Motorola have to compete just as well as any other maker. In fact they don't make the Google Nexus handset. They don't show favoritism towards Motorola. Microsoft, I am sorry to say, will not! They want someone to be the designer and maker of devices specifically for Windows Phone 8 that they can control the hardware specification. Just like Apple but Apple make their own handsets they don't sell their operating system to various handset makers though, as I predict that will change and they may want to have total control over handset design and specification. They may feel that it is the only way to compete with iOS and Android and the miriad of other newer OS's that are starting to emerge!

Samsung will drop Windows Phone anyway, they are barely supporting it now. Eventually they will drop (or attempt to drop) Android as well in favor of their own Tizen OS. HTC will probably fail regardless. Microsoft needed to do this to ensure their hardware would get built.

One thing Apple and Samsung should be concerned about is that Microsoft can match and exceed their marketing budgets, however, they didn't have the marketing talent Nokia had, now they do. Samsungs monster marketing budget has played a huge role in the success of the Galaxy line. Apple, does a lot, but in my opinion, theirs is typically smart and well executed. Plus, they have products that the general consumer actually love and can easily use.