New Microsoft Graphic Shows Just How Dumb The Nokia Purchase Was
Microsoft Corporation (NASDAQ: MSFT) announced earlier this week a complete overhaul of its handset division, including a $7.6 billion impairment charge related to assets associated with its acquisition of Nokia Devices and Services (NDS) business.
Ballmer: 'We Are Trying To Accelerate Our Phone Market Share'
Microsoft acquired Nokia Corporation (ADR) (NYSE: NOK)’s phone business in September 2013 for $9.4 billion, which included its mobile phone business and smart device business. The relationship between the two companies dated back to February 2011 when they initially announced a strategic partnership.
In a presentation to investors immediately following the acquisition announcement, Microsoft’s ex-CEO Steve Ballmer stated: “We are trying to accelerate our phone market share” and “we want to strengthen the overall opportunity for Microsoft from a devices and services perspective.”
Related Link: Microsoft Is Trying To 'Undo' Steve Ballmer's Mistakes
“With this deal we have a real opportunity to materially drive long-term shareholder value,” Microsoft’s Chief Financial Officer Amy Hood said during the presentation. "With strong execution it is an acquisition that delivers a significant economic return.”
Statista: ‘Microsoft Spent $9.4 Billion On A Sinking Ship’
Unfortunately for Microsoft, it failed to gain any traction in the smartphone market and experienced years of continued declines. At the end of the first quarter of 2015, Windows devices held a 2.5 percent worldwide market share, according to Gartner. In fact, its market share dipped from 2.7 percent in the same quarter a year ago. By comparison, Android was the clear global leader with a 78.9 percent market share.
Statista commented on Microsoft’s restructuring plan, noting that it is “all but an admission of defeat” as the company “still hasn’t managed to gain traction in the smartphone industry.”
The publication further suggested that the acquisition “turned out to be a flop” and the acquisition actually took place at a time when Nokia’s market share was already in “steep” decline.
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