Well, Microsoft’s (MSFT) plan to team up with Nokia to boost its smartphone dominance certainly didn’t pan out.
Sure, Windows Phone is gaining momentum. But with a 3% market share, it’s still a distant third behind the market leaders, Apple (AAPL) and Android.
Hence the company’s plan to purchase most of Nokia’s mobile phone business. According to CEO Steve Ballmer, “For Microsoft, it is a signature event, a signature event in our transformation.”
The goal is to help the company bump up its smartphone business to a 15% market share by 2018. But will it work?
According to Reuters Breakingviews columnist, Rob Cyran, “If they can tie the two businesses closer together, they can design devices faster and make this software work a bit easier, better with the hardware. That’s been Apple’s advantage over the years.”
CLSA Americas analyst, Ed Maguire, is also hopeful: “There’s not a lot of overlap. You’re not talking about a merger of equals here. You’re talking about bringing on board an existing partner.”
That’s not all it will take, though. Profits aren’t all in the devices themselves. They’re in the apps.
So, according to Maguire, Microsoft must amp up its offering of applications to get developers onboard.
“Part of the appeal of a phone is really what you can do with it. It’s the apps,” says Maguire. “Microsoft doesn’t control the third-party developers that create those applications. So part of the rationale for an integrated platform is, if you’re a developer, you get more bang for your buck by developing on a Microsoft platform because you can run apps on different form factors, which is not something you can do with Apple iOS and Mac OS, for instance, which are quite different.”