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Smartphone prices may change

Microsoft’s recent acquisition of Nokia’s handset business through the takeover of Nokia Oyj  is expected to have a significant impact on the operations of both the companies in India.

Nokia has large footprint in India with aggressive sales and distribution but Microsoft , though small, has more resources particularly in the engineering section. Says Ravi Venkatesan, former Chairman of Microsoft India: “for Nokia, India is the 2nd largest market and 3rd largest in terms of smart phones.”  Asha is one of Nokia’s fast moving low priced smart phones specially designed for the Indian market.

Microsoft is highly focused on the smartphone market and it is expected that it will maintain Nokia’s feature phone hold in India and as the market move is more towards the smartphone segment.

The deal between the two companies is not likely to impact heavily Miscrosoft’s research and innovation facility, but it will on Nokia’s manufacturing facility in Chennai, which predominantly makes the Asha range. People close to the deal claim that this is one of the global acquisitions where the Indian balance sheet heavily influenced Miscrosoft.  Microsoft will push its windows platform on the smartphones.

Some knowledgeable sources claim that sale was not a good deal for Nokia because they feel that its handset business’s  actually valued over 15 billion USD, double of what Microsoft acquired it for.  Nokia is still a valued brand globally and also in India.

But in India , Nokia has steadily lost its dominant market share to Samsung and Micromax which capitalised on the emergence of the smartphone market. Samsung today is the big boy in the cell phone market with 26 per cent market share.  Micromax has cornered nearly 16 per cent of marketshare with its smart phones aggressively priced against Samsung.

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