Microsoft wishes to capitalize on the emerging markets.
Microsoft Corporation since the time it has acquired Nokia Corporation’s smartphone division the previous year, the company has been making several efforts to boost the sales of its smartphones globally. The company has evaluated that it is extremely difficult to capitalize on the developed countries since Apple Inc. and Samsung Group are heavily disrupting the market through their high end products. On the other hand, there is a massive room for growth in emerging markets since these big companies are not much prevalent in these regions.
Microsoft initially bought the smartphone division of Nokia for $7 million. This was the time when the market share of Nokia had declined substantially by 50% to almost 0 due to the increasing popularity of Apple iPhones. Back in those days, Microsoft’s smartphone share was just 4 percent in the industry. At this point MSFT wished tp establish itself in the handset market so that they could penetrate deeper in the hardware segment. However, this initiative by the company was not appreciated by investors, app developers and mobile analysts believed that the path taken by this company was extremely small to actually allocate the resources.
However, despite all the tough time, the software giant has observed in its tenure it is still not willing to give up on its mobile segment and wishes to penetrate deeper into the Indian smartphone market which has immense room for growth and saturation. According to the recent news, Microsoft is all set to phase out the name of Nokia from almost 9,000 outlets and wishes to brand them again as their official Microsoft stores. According to Neil Shah, the analyst at Counterpoint Research spoke to the Wall Street Journal and stated, “Emerging markets are the only savior for Microsoft right now.”
Nokia earlier enjoyed immense popularity in the Indian smartphone market but over the passage of time it actually lost its charm and local giants started to capitalize on the market.
As reported by Rushabh Doshi, Canalys analysts to the Wall Street Journal, “Nokia’s strength in India lay in its vast network of distribution and strong after-sales service network which Microsoft must continue to maintain in order to elicit the brand loyalty that Nokia had in India.”
Micromax, a local smartphone giant has gained momentum in the Indian market by coming up with affordable smartphones that are equipped with top notch specifications. So now it will be extremely engaging to see that the plan of Microsoft to launch high end smartphones is likely to face competition in India since there are several key players present.
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