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Microsoft-Nokia deal: Growth markets may see onslaught of new, cheap smartphones

Sep 04 2013, 08:19 IST
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a foothold in emerging mkts is one of the reasons why Microsoft is buying Nokia. a foothold in emerging mkts is one of the reasons why Microsoft is buying Nokia.
SummaryNew combined entity faces an uphill task of matching up to Apple, Samsung, Karbonn and Micromax.

one needs to see how the feature phone segment is being strategised after this deal. “In India Nokia is the market leader because of its strong presence in the feature phone segment and if this deal is an indication of strategic shift towards smartphones, then the market statistics are going to drastically change.”

Earlier there were talks that Microsoft was talking to many local players in various countries to bring cheaper Windows phones. With this deal, the other device manufacturers will be wary of Microsoft, say industry analysts.

Kawoosa said that since Android being a free source software, it will still offer a cheaper option to Microsoft-Nokia phones. “As long as Microsoft is able to get many other device manufacturers on board to have a wide range of Windows based phones available, things are going to remain the same,” he said.

Anshul Gupta, principal research analyst, Gartner, told FE that both the companies have been working together for the last two-and-half-years and customers can now expect faster upgrade of devices than before. Nokia has significant presence in India with a handset manufacturing unit in Chennai set up in 2006.

It is one of the largest by the Finnish mobile phone maker and employs more than 38,000 people producing 800 million phones.

For Nokia, India is one of the largest market and the manufacturing unit in Chennai plays an integral part in the company’s global strategy. To date, Nokia has invested $285 million in its manufacturing operations in Chennai. Nokia’s facility at the SEZ, Sriperembudur, near Chennai, had reported physical exports of R12,136.54 crore from 2006-2007 to 2011-2012.

Talking to FE, M Shanmugam, general secretary, Labour Progressive Front at the Chennai factory said, “When compared to competitors like Samsung, Nokia is not aggressive when it comes products front. Microsoft should look at converting this facility to a multi-product manufacturing facility.”

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