Microsoft: The hardware company

Microsoft: The hardware company

Summary: It's official. With the purchase of Nokia's device division, Microsoft is now a serious hardware company.

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For decades, Microsoft was a software company. Now, with the purchase of Nokia's phone division, Microsoft has officially shifted to being a serious hardware company as well.

ElopBallmer
Elop and Ballmer

We've seen this coming for a while. Heck, most people in America already thought that Nokia was a Microsoft company.

After all, Nokia was headed by a former Microsoft executive, Stephen Elop. Under Elop's guidance Nokia became the number one Windows Phone vendor. There are other Windows Phone vendors, but none were as tied to Microsoft's hip as Nokia was.

I think this move has been in the works for some time. Even as Nokia continued its rapid declineits stock lost 85 percent of its value under Elop's rule — Elop stayed true to his Microsoft alliance. In fact, as part of this deal, Elop returned to Microsoft, and some people see Elop as the CEO heir apparent to Steve Ballmer.

Don't ask me how someone who could run a company into the ground the way Elop did can even be retained in any position of authority, never mind being considered as a CEO of a major company, but there it is.

It's been suggested that Microsoft bought Nokia because it had to before the company went under. Indeed, some even think that Nokia forced Microsoft's hand by blackmailing it with the threat that the company would no longer make Windows Phones.

I don't buy these ideas. If you looked carefully, you could see Microsoft moving into hardware as early as 2011. I see the Nokia acquisition as the next natural step in Microsoft's progression from software to hardware and cloud services company.

Of course, Microsoft has been dabbling with hardware for years with some success, in peripherals such as keyboards and mice; and some failures, such as the Kin and the Zune. What's happening now is different.

First with the Surface tablets and now with the Nokia deal, Microsoft has made it clear that it wants to be your hardware provider as well as your number one software source. Can a Microsoft-branded PC or notebook be that far away? I wouldn't bet against it.

The real question isn't whether Microsoft will invest in hardware sales — the question is how much. There's no doubt that it's betting its future on hardware business.

The immediate question: How is this move is going to affect its bottom line and its business partners? As for the first, neither the Surface line nor Nokia's Windows Phone have done well in the marketplace. Microsoft has a long way to go in both tablets and smartphones before it can really contend against Apple and Google's Android allies.

As for its partnerships, I think Microsoft is continuing to burn its bridges with its hardware partners. I think this is a very dangerous course of action.

That said, it may also have been Microsoft's only chance to compete in the post-PC world.

While Microsoft still owns the desktop, it has little significant presence in tablets and smartphones, and its partners weren't helping it any. I can see Microsoft's brain trust deciding back in 2011 that its one real hope to remain a presence in personal computing into the 2020s was to take its hardware fate into its own hands.

Related stories:

Topics: The Microsoft-Nokia Deal, Hardware, Microsoft, Mobility, Nokia, Smartphones, Tablets

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78 comments
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  • Perfect review material

    SJVNs review and retention should be based on this perfectly representative example of his work! Took you all day for this did it?
    greywolf7
    • Burying phones

      took you all day for this did it?

      I think the response could be... not, but that took a long time fixing it for his audience (infestation) of Microsoft fan's boys ... yes


      ----------------------

      ...'was to take its hardware fate into its own hands'.

      Some guy wrote: Two wrongs (Ballmer + Trojan Elop) make a right?

      I think that the result of this marriage will be that they (MS) will have to make an hole bigger than that which MS need to bury all those tablet that didn't sell (now to bury phones).

      ----------------------
      Marco nn
      • Ha ha

        Another guy wrote:

        Ballmer: Destroy Nokia and let buy it for cents (remember that your have Microsoft' shares not Nokia' shares) and we will 'reward' you


        Elop: Done Boss


        accurate!
        ----------------------------
        Marco nn
        • Are you talking to yourself?

          Please stop it.

          It's scaring me.
          ForeverCookie
          • strange and dangerous

            The internet is a strange and dangerous land my son, don't be afraid (or rather yes, otherwise just God knows what might happen to you)
            Marco nn
  • should change company name to Microsoft n' hard

    (or something similar)
    drwong
    • Better yet

      Call it Microware
      (I only ask 10%)
      danbi
    • Microbare

      For this way end up being: Microbare...
      Marco nn
    • New name...

      How about combining the soft and hard into shard, then change the d to a t. Of course if they end up with more $900M write offs, we'll need to replace the prefix with Macro!
      robradina@...
  • Microsoft and the hardware.

    OEM manufactures IMO was one of the reasons for MS to be like this. Lets admit it,most of MS OEMs were/are producing hardwares that cant really compete to Apple's.
    Koymik
    • True

      Apple makes nice hardware and sells the sizzle of it. Windows OEMs were competing on putting out the cheapest hardware and filling it with bloatware in an effort to make some margins.

      The OEMs have forced this on themselves and a few are going to fold in order to correct the situation.
      Emacho
      • And now

        Microsoft will start making nicer hardware than Apple out of good will.

        Nice Fairy Tale.
        danbi
  • Kudos to Microsoft and Nokia

    You currently make the world's very best smartphones as 2 different companies. It almost doesn't seem fair to the competition that you will now be working together in the same company.

    Because I'm a nice guy and I care about apple fanboys getting good products, let's hope this spurs apple into motion. They've been stagnating, not innovating, for so long now, it isn't fair to the loyal apple fanboys who buy apple no matter how bad their products are. That kind of blind loyalty to a corporation really should be rewarded with good products. Maybe the iphone 6 will be good. Just wait another year.
    toddbottom3
    • Re: Kudos to Microsoft and Nokia

      Yep, Toddy. For once we agree. Kudos to Nokia and Microsoft.
      danbi
      • Let it be Microsoft

        Micro=small, soft=weak (not hard). So goodbye OEM manufacture. Now you could only sell MS PC, Notebook, Netbook, Slate, Phone etc.
        me_myself&someone_else
      • agree

        totally agree with toddy and danbi....

        let the apple fanboys squeal all they like... maybe Apple will get going and be innovative... hang on ... i just saw a little piggy flying in the sky....
        zubo
  • Who to blame?

    Microsoft decided to be a hardware company, do you know why?
    Because of the OEM's with no visions who know nothing than just pressuring microsoft and saying all the time in the media that windows 8 is a failure and windows 8 is bad we will go chrome os or android or any other open source thing! (just to look like a ridiculous communist like jivara or something)
    Microsoft says to them, OK, as u like go to chrome OS and i will make my own windows 8 machines, see who will buy your open sourced machines!!
    FadyNabilNashed
    • Re: Because of the OEM's with no visions

      But of course! Those companies who were for decades making personal computers had no clue. Only omnipotent Microsoft, who has never made computers, know all about computers ---- in their pipe dreams.

      Go Microsoft, go!
      danbi
      • Most of them really don't

        They just throw a group of parts together and call it a day. It's why Macs are good, Apple actually gives more than 5 seconds of thought to what they use.
        Michael Alan Goff
    • Jivara

      Maybe you mean Ernesto "Che" Guevara, a Marxist well regarded by many.

      Hardware (mobile) is where profit seems to be, for that and some more reasons this was a good move of Microsoft - but they need to make a strong presence in mobile devices, or it will become just wasted money.
      AleMartin