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Unavoidable or Machiavellian?

There's a bit of a rush to proclaim Stephen Elop's part in the last few years of the Nokia mobile story as that of a Trojan Horse, planted there to drive Nokia's value down and allow Microsoft to snatch the business up on the cheap.
That's a bizarre conclusion to reach when you consider the risks that Microsoft have acquired with the business. In fact it's probably safe to say that Nokia's poor financial position drove Microsoft to the purchase rather than the other way around.

Nokia sells better than three in four Windows Phones. Nokia was running out of money. Nokia had significant political and procedural problems. The risk to Microsoft was that Nokia failed and pulled out of the phone business, or worse sold it to a rival. Leaving Microsoft's platform ambitions in tatters.

Actual sales of Lumia handsets are growing nicely, so jumping in to take ownership now makes no other sense, unless you consider the disastrous financials at Nokia as the compelling reason to complete.

Was Stephen Elop's role that of a Trojan Horse or was he guilty of incompetence? Neither. Nokia's problems were so deep and entrenched that turning the business around was taking a significantly longer time than anyone expected.

Nokia had been a slave to its Symbian division for too long. The software was outdated and their handsets slow in arriving; turning out to be ill conceived and poorly executed when they finally did. The Maemo/Meego output was technically superior but politically obstructed within the company. The result? Three tablets and two handsets over a period of several years. Samsung churns out that many new products every weekday morning before lunchtime.

And Samsung was the major factor in pushing Nokia to Microsoft. Whilst many question why Android wasn't chosen a review of the state of the market in 2011 clearly demonstrates that Nokia had no other choice. Samsung were rampant on Android and neither Sony-Ericsson nor Motorola were able to compete. For Nokia, adopting a new platform, with limited funds to support development and such strong competition this would have only hastened the end.

Ultimately the gamble with Windows Phone failed, but Microsoft's financial support allowed the company to transition to the new platform and start to grow a market share

Can Microsoft develop the business further? That's the big question. Failures with the Kin, Zune and Surface suggest that customers just don't want Microsoft branded hardware devices. The Xbox is the only notable exception and that doesn't really shout about its origins. A Nokia Lumia is inevitably going to sell more than a Microsoft one.

With mobile devices demonstrably the future of technology Microsoft has to deliver on its $7bn gamble. And that's looking like a mammoth task right now.


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