A Suspicious Angle to Microsoft’s Acquisition of Nokia

Not long after Microsoft and Nokia did a deal for Nokia to back Windows Mobile and Microsoft exec Stephen Elop moved over to become its CEO, I mentioned to some of my colleagues that I thought this was a set up. In fact, I wrote a Techpinions piece on Aug 15th, 2011 that literally said Microsoft WOULD buy Nokia in time.

If you look back at this period in which Nokia was Microsoft’s major Windows Mobile vendor and Elop got serious experience being a CEO of a multi-national company, one has to wonder if there was not some type of grand plan put in place between Ballmer and Elop from the beginning. Surely Ballmer knew even then that his days might be numbered and that while Elop was a natural successor to him then, he needed responsibility as a CEO before he would be seriously considered as a successor.

I have known Ballmer since 1985 and over the years have watched as he has aged and the pressure of running Microsoft was catching up with him. During this time his kids have all grown up and I am sure he looks back on the missed times he had with them during their most formative stages of life. Regardless of his performance at Microsoft, I have felt for a couple of years that he was ready to step down and allow someone else to try and bring Microsoft into the post PC era.

While it is true that Elop’s tenure cannot in itself be considered a success, let’s be honest. He was handed a highly wounded Nokia from the beginning and he gets street cred for just keeping them alive and competitive given the beating they were taking from Apple, Google and Samsung. And Nokia became the #1 vendor of Windows Mobile phones and, as research stats have shown, Microsoft actually gained ground in a lot of international markets where Nokia already had a large place in those parts of the world.

While Microsoft and Nokia have no chance of rising above Apple, Google and Samsung in terms of units sold, together they can clearly become the third option in a smart phone market that is still in its early stages of growing and will sell at least 1 billion units per year for the foreseeable future. And even at #3 there is a lot of money to be made if they execute well and aggressively at a competitive level.

If you read many of the news stories about the Microsoft/Nokia deal, most of them suggest that Stephen Elop is now considered the #1 candidate to replace Ballmer as CEO of Microsoft. At the moment, he will be running Microsoft’s recently announced device division and will focus on helping Balmer in the short term achieve Microsoft’s One Vision goal of being a hardware, software and services company.

I believe that this will be a short-term role. I doubt that Ballmer will stay the full year and would not be surprised if Elop is in place as the new CEO by Dec 1, 2014.

But the neatness of Microsoft now buying Nokia to anchor their device division, at a discount no less, seems to me to be less happenstance and rather part of a grand scheme hatched a couple of years back. And if Elop does become the new Microsoft CEO, it would come full circle and be looked at as one of the more interesting premeditated corporate purchases of all time.