Microsoft's big Nokia deal may be too little, too late

Obviously, Microsoft’s US$7.2 billion acquisition of Nokia is an important deal, but it may be more about the past than the emerging challenges of the future.

For Steve Ballmer’s Microsoft, the deal is a bold but possibly too-little-too-late effort to transform its business for the mobile era that has largely passed it by.

At Nokia, it means the end of an era. What the Finns built in the past 150 years is being sold off after only three years of controversial restructuring, led by CEO Stephen Elop, a former Microsoft executive who will now return to the fold.

To Google’s Android platform, the Microsoft-Nokia deal is “much ado about nothing”. Before the deal, Windows Phone, through alliances, had 3.75 per cent of the smartphone market. After the deal, the share will remain the same, but Microsoft will have direct control. Google’s Android will still hold 80 per cent of the market.

The industry, however, is migrating to Asia. Pioneered by Guglielmo Marconi, wireless telegraphy created the first customers and business models in the industry, particularly in the maritime sector. Over time, it was superseded by AM and FM communications, which provided a military advantage to US defence forces in the second world war and a competitive edge to electronics giants, such as Motorola.

The cellular concept was discovered as early as 1947 at Bell Labs, but commercialisation followed only in the 1980s with analogue cellular networks. These services appealed primarily to car drivers and corporate markets.