Microsoft Results Prove Nadella’s Mobile Strategy Is On Track

by CXOtoday News Desk    Oct 24, 2014

Nokia

 

Ever since Microsoft acquired Nokia for $7.2 billion, there have been many strategies to drive up mobile sales in India.  Microsoft has gained access to Nokia’s (barring NSN) design patents and related Intellectual Property (IP), which are being leveraged to drive innovation around the Asha and Lumia platforms. 

Now, there are talks that Microsoft may soon drop the name of Nokia from its handsets. “We are on the verge of becoming Microsoft Lumia,” Nokia France’s Facebook page announced in French.

That underlines Microsoft CEO Satya Nadella’s strategy to focus on mobile and cloud. While the Cloud has already started yielding results, the biggest challenge for Microsoft is reviving the mobile business, which it is losing to the competition from Samsung and Apple.

“We are innovating faster, engaging more deeply across the industry, and putting our customers at the center of everything we do, all of which positions Microsoft for future growth,” Microsoft chief executive Satya Nadella said in a release.

Microsoft on Thursday reported revenue growth of $23 billion this compared to $18.53 billion from the same period last year, The company attributed it to Xbox consoles and Internet “cloud” services for enterprises.

Now, Microsoft is firm on maintaining a competitive edge in the smartphone market. It has reported that the revenue from phone hardware was over $2.6 billion in the quarter. Without the Nokia, Microsoft would have grown only 11 pc this quarter, says NY Times. 

That shows the need for Microsoft to take the smartphone business seriously. 

 “Microsoft cannot walk away from smartphones, and the hope that other vendors will support Windows Phone is fading fast. So buying Nokia comes at the right time,” said Carolina Milanesi, an analyst at Gartner, told Reuters. 

Nokia’s share in the phone market has slumped in recent quarters. Microsoft says it has sold 9.3 million of its Lumia smartphones in the quarter. It is a 5.6 percent increase from the record 8.8 million handset sales in the same period last year, says the Verge.

Soon after taking charge, Nadella has sent an email to all employees highlighting the company’s goals. He wrote: “At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world.”

Microsoft-Nokia deal was said to be the best at a time when Windows phone were losing market share to Android and iOS devices. 

Given the poor performance of Microsoft’s Windows Phone 8, Nadella was quoted by Firstport as saying his focus was not just on numbers.

“We do not define our success in mobility by just looking at the share of one form factor,” he said, adding: “Any enterprise that wants to bring their own devices, we’ll make sure that they’re secure. Thirdly we have Office 365, which is the ubiquitous productivity suite, on all mobile exit-points. Then we come to our own Windows Phones and Tablets and I’m fairly confident about the progress we’re making with these devices.”

With the recent launch of Windows 10, it seems Microsoft has its mobile strategy on track.