Microsoft Takes Risks By Buying Nokia

Microsoft Takes Risks By Buying Nokia

Lately the world was witness to a lot of excitement coming from the technology sector which is changing at a rapid pace. After we have become accustomed whit Yahoo’s impressive purchaces, Google acquired Motorola as a hardware partner and now Microsoft is buying Nokia’s devices and services devision, patent licences, design patents and a lot of employees (32000), all for $7.18 billion. As the Windows Phones’ market is dominated by Nokia, Microsoft may have made a smart decision. Giving the troubing performance of both Nokia and Microsoft in the mobile phones’ industry, the two giants joining their forces may lead to an improved performance in the forseeable future.

In a realistic scenario, both companies are expected to underperform for a while, fact reflected by the decline in the price of shares during the last period. If Nokia is hoping for reinvention and Microsoft is planning to increase its profits in the mobile-device market, starting with the first quarter of 2014 when the process of the acquisition will be completed, we may witness even more bold initiatives coming from the old allies (as they had a partnership in 2010). For now, Nokia is considered a less attractive business which doesn’t appeal investors anymore, being left in Microsoft’s hands (which also is betting on a highly riscant card game).

 

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