Just like Google acquired Motorola, Microsoft has recently purchased mobile phone manufacturer Nokia. Come 2014, Nokia will become a part of Microsoft. This is by far the most significant step Microsoft has taken towards becoming a “Devices & Services” company. The acquisition has put Microsoft in direct competition with Google and Apple.

Focus On Developing Products

With Nokia in the bag, Microsoft now has the resources and facilities to develop its own products. Nokia is a profitable company with a stronghold in a few Asian markets, but Microsoft was clearly aiming for more than the profit it generates. Now, Microsoft can design mobile products from scratch, having complete autonomy over the components it uses. From the operating system to the hardware, they cannot only build the parts, but also distribute their products.

One cannot ignore the fact that Nokia is a full-fledged manufacturing and distribution operation, so Microsoft is definitely going to make optimum use of it. This isn’t much different from what Google did when it purchased Motorola last year. Microsoft has the foundation on which it could become a major player in the mobile market. At present, Microsoft has just over 3% of the market share. Google, on the other hand, is in control of the US market with its Android OS.

Increase in Sales

Microsoft will pose a further challenge to Google as its sales are bound to increase. Even though Windows Phone has been created and developed by Microsoft, the 7 million+ sales of the OS are more or less the result of Nokia’s involvement. Nokia will be a part of Microsoft now and the sales will be added to Microsoft’s numbers. Google has been focusing on the Moto X phone, but its deals with other manufacturers enable it to control a large market share.

On the other hand, Microsoft is unlikely to be able to attract many takers for the Windows Phone OS. In fact, chances are that the license will be restricted to the products the company makes. This could dent the market share Microsoft has been able to gain.

The striking aspect of the Nokia purchase deal is that Microsoft now controls the resources that it needs to change its image and product offering. Of course, it will take some time before the company can complete the transition. But then, no one is expecting an overnight transition. Even Google hasn’t been able to make much headway with Motorola since the purchase was completed. So, it will take time for Microsoft to make the most of the facilities that are now under its control.

For both companies this is all a fight for mobile traffic and mobile internet users whereas the winner takes it all.

Whether or not this kicks off a new rivalry between Microsoft and Google remains to be seen. Only if Microsoft manages to capture a larger market share would Google feel threatened. Well, who knows?