The Future of Microsoft’s Recent Acquisition of Nokia’s Handest Business
Like a lot of people, we’ve been closely following the news of Microsoft’s acquisition of Nokia’s mobile handset business. But while many have talked about the loss of value that saw the once mighty Nokia acquired for less than what Microsoft paid for Skype, what interests us is the potential value the deal could create if the combined company decided to focus on cross platform services such as HTML5 and MMS, rather than focusing on closed proprietary ecosystems like Apple and Google have done. Today it’s anyone’s guess whether they will embrace cross platform solutions but we see some compelling cases for doing so:
- Offering a better deal to developers: by building carrier-billed mobile payments into HTML5 services developers can monetize on any handset by adding a two-click checkout to their app. Carrier billing offers a far more attractive revenue split for developers than the main app stores, as well as 3x higher conversions than credit cards, giving HTML5 a significant differentiator for developers versus iOS and Android
- Giving advertisers a unique medium for reaching everyone with great content: If Microsoft and Nokia embrace MMS, placing this widely used app at the center of their device experience, they will attract marketers who want to reach consumers on a widely used medium that trumps app use (only 43% of smartphone owners use apps whereas 90% of all phone users text message)
- Engaging more consumers on the mobile web: one example would be for Microsoft to bring its Xbox gaming franchises to the mobile browser, enabling 50M+ Xbox Live Subscribers to play seamlessly across both platforms. This would drive loyalty and would allow Microsoft to create unique cross-platform ad & mobile payment opportunities for brands
History has shown us that cross-platform technologies succeed. Text messaging, the most widely used app of all and a service that Nokia pioneered, is the best example of this. If Microsoft and Nokia choose to again drive forward cross platform technologies such as HTML5 and MMS they could ignite a new mobile ecosystem driven around the idea of openness and ubiquity.