Microsoft and Nokia must break from the past to succeed in mobile

June 12, 2014  | Subscribers Only

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Microsoft’s purchase of Nokia’s handset unit closed a chapter in mobile history, but also highlights the weaknesses of both businesses in the modern, smartphone driven world. Nokia’s is shipping less than half the number of phones it did a few years ago, while Microsoft has never made the breakthrough it desperately needs in mobile.

The Nokia handsets unit joins a Microsoft in the middle of its largest structural and cultural change under its new CEO. This report examines the strengths and weaknesses of Microsoft’s new unit and if Microsoft can finally become a force in mobile. It also looks at the remaining Nokia business and if a return to handsets is ever on the cards for the fallen giant.

Highlights:

Nokia shipped 250m handsets in 2013, but this was barely over half the number it shipped at its zenith in 2008. It shipped 30.5m smartphones; good enough for only 3% market share.
Since launching Windows Phone in 2010, Microsoft has failed to capture more than 4% of the global smartphone market in any year.
Even if Microsoft can stem the decline in handset shipments and make each shipment a smartphone by 2018; it would still capture only 10% of the global smartphone market.
The global smartphone market will grow to over 1.9bn units in 2018 with low end smartphones making up 1.1bn.

In this report:

Examination of Nokia and Microsoft’s current market positions
The strengths and weaknesses of both Microsoft and its new handset unit
Evaluating the competition in the low end of the smartphone market
The future of Windows Phone with other manufacturers
How the deal fits with Microsoft’s new corporate strategy
What Nokia is left with to reinvent itself again

List of tables and charts:

  • Nokia quarterly handset shipments
  • Nokia market share
  • Global smartphone forecast by segment
  • Comparison of low-cost branded smartphones  (table)
  • Windows Phone releases by manufacturer
  • Smartphone market share by OS forecast
  • Remaining Nokia business units’ revenue

Number of pages: 9

Number of charts and tables: 7

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