James Moore: Stand by for some fun as Microsoft strives to get its house in order with Nokia deal


Outlook A cynic might see the real prize for Microsoft with its $7.2bn (£4.6bn) takeover of Nokia's mobile business as the return of Stephen Elop, who could provide a tidy solution to the question of who should replace Steve Ballmer as CEO.

But Microsoft needs this to be about more than getting its man (if Mr Elop is indeed its man). Because even if $7bn is relatively small change for the company, it really wouldn't do to be spending that much just on a transfer fee, even if the Canadian Mr Elop is the business equivalent of Real Madrid's €100m man Gareth Bale.

He could be seen that way if he can make this deal work. Microsoft has been trying to become Microhard, a maker of the gadgets that run its operating system, for some time now.

So far, its efforts have proved decidedly mixed. The XBox is a winner. But remember the Zune – an attempt rival to the iPod? You probably don't.

Then there are the warehouses stocked with unsold Surface units. Microsoft's clumsily named tablet has seen some take-up among students at the cheaper end of the scale because they use it as a lightweight laptop.

But the top-spec model is on offer – buy now and you'll save 80 quid. When was the last time Apple started slashing prices like that to shift unsold product?

Nokia's mobile business may be a shadow of what it once was, but its Lumia devices at least have their fans. What Microsoft needs to do is to develop a coherent strategy around a suite of products, under a brand people like. It might help if it stopped trying to compare its offerings to what others do (look, we're better than them) in favour of selling them on their own merits (look, our product's fab, you have to own one).

Of course, if it can restore Nokia's fortunes under the Microsoft brand, the question then is how will Samsung, HTC (which has troubles of its own) and the other makers of Windows phones view the development? That said, if Microsoft can make Microhard, or Microphone, Microgadget or whatever, into a force, it might not have to worry too much about that.

This promises to be fun to watch, and you can bet that this one-time one-trick pony, (endlessly updating Windows) will suffer a few embarrassing falls before we'll be able to assess whether it has won this race.

In the meantime, poor old Nokia, eh? The Finnish titan's exiting stage left with its tail between its legs. Back to the paper plant? Not necessarily.

While Microsoft has many questions to answer, what remains of Nokia is intriguing. While it's true that $7bn is a small fraction of what its mobile business was once worth, it is now in a potentially interesting situation, with what could be a very nice infrastructure business combined with a cash pile that could be used to go out and bolster it. Finland's a chilly place in winter, but the thought of the fees that could generate will be keeping its bankers very warm indeed.

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