Microsoft’s acquisition of Nokia’s mobile handset business could be a game changer for the two companies in the Indian mobile phone market.
While Microsoft can leverage Nokia’s strengths in the feature phone and entry-level categories, Nokia can get access to Microsoft’s high-value enterprise customers.
Benoy C. S., Director, ICT Practice at Frost & Sullivan, said, “With a couple of new and good product launches similar to Lumia, Microsoft should be able to create the much-needed momentum in Windows mobile ecosystem. Moreover, we just started witnessing the gradual transition from feature phones to smartphones in countries like India. With Nokia, Microsoft can effectively penetrate into the high volume entry level segment in India.”
Currently, Nokia has a 5.9 per cent share in the smartphone segment, but has a 27 per cent share in the overall phone market primarily driven by feature phones and entry-level devices. Microsoft can leverage Nokia’s strength and try to make sure that those users, when they upgrade to smartphones, choose Windows phone models.
Microsoft’s deeper involvement can also help Nokia offer its Windows Phone handsets at more competitive prices in emerging markets like India.
Larger footprint
Analysts at Juniper Research said, “Microsoft will get a larger footprint in the emerging markets with Asha, as Nokia has committed substantial investment to this range. This means the customer would perceive a switch from Asha to Lumia to be a whole scale upgrade in their entire ecosystem rather than just a smartphone.”
Anshul Gupta, Principal Research Analyst, Gartner, said the Nokia deal will bring Microsoft a step closer to consumers and bring devices and services they want. “Currently, there is a duopoly in the market with Google’s Android and Apple. There is space for a strong third ecosystem. With this deal Microsoft has the opportunity to be that third option with Windows 8,” said Gupta.
However, not all are convinced about Microsoft’s gameplan. It won’t be a cakewalk competing with the aggressive Samsung and Indian phone brands such as Micromax.
Ian Fogg, head of mobile analysis at IHS Electronics & Media, said, “The new company has a long road ahead to establish Windows Phone as a viable competitor to Android and Apple's iPhone. In the second quarter of 2013, Nokia shipped just 7.4 million Windows Phones compared with 31.2 million iPhones and 185 million Android smartphones.”