Microsoft explains why it's buying Nokia, says it needs a 'first-rate' smartphone experience (updated)

Microsoft's outlined its reasoning behind why it's gone deep into smartphones in a lengthy presentation file. Alongside cheering Windows Phone's current growth (No.3!), it's reaffirmed that it'll bring its products and services to rival mobile OSes, still involving itself with "iPhone and Android/Galaxy phones." However, it tempers this point, adding that the Redmond company can't risk "having Google or Apple foreclose app innovation, integration, distribution or economics." Given the strength of the top two, Microsoft is telling it straight, adding that it needs a "first-rate Microsoft phone experience for users" to compete, suggesting that its portfolio of devices isn't quite there yet. The slides also outline the purchase of Nokia's patent collection, one which Microsoft believes is one of the most valuable in the tech sector. MS also thinks that the acquisition will speed up innovation within Windows Phone and protect its future. So, some high hopes for the purchase.

Update: According to slides in the source, Microsoft also has more concrete goals for its Nokia devices acquisition. It'd like to boost its smartphone share to 15 percent by 2018, around four times what it has now, depending on which numbers you believe. Redmond also revealed that it makes less than $10 per handset in its current arrangement with Nokia, and thinks it can make over $40 going forward, while saving $600 million in costs. With all that, Microsoft is projecting $45 billion extra in revenue by 2018, with profits in the $2.3-4.5 billion range. High hopes indeed.

Steve Dent contributed to this report.

Filed under: Cellphones, Mobile, Microsoft, Nokia

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Source: Microsoft(PDF)