Microsoft to buy Nokia's phone business

CNN's Pauline Chiou talks with Mark Newman about Microsoft's plans to buy Nokia's mobile phone business.

Does this marriage between Microsoft and Nokia make sense to you?

I don’t really think so, ’cause from Microsoft’s perspective, Nokia is already using Windows. So it’s unclear what the additional do they get from this deal. I think, you know, they’re buying the handset operating company. They’re not buying the patents. So I don’t really think they’re getting much. From Microsoft’s perspective, they want to develop a competitive ecosystem to compete with Android, Google’s Android and Apple’s iOS. And Nokia was already using Windows, so it’s unclear what additional benefit Microsoft will get from this.

And they’re spending a lot of money, $7billion for this. So if it doesn’t make sense to you, I wonder if there is something else that perhaps we don’t know about. I mean, you mentioned the patent. So they have access to, for then years to their patents. Is there something in those Nokia patents that they could use that will really put them ahead in the smartphone’s race?

Well, it can help them in future potential litigation with Apple, Google and any other player. That’s for sure. But I think the more interesting thing really is Microsoft is making a move to volume the integrate. They are going the way of Google potentially with Google purchase of Motorola Mobility, and the way of Apple with the Apple is really the completely integrate model in terms of the hardware and software, and they think that’s a benefit having both the software and hardware internally. We still saw they already made some attempts in hardware before, with the X-box, the Zune and more recently with the Surface.

This was not a big success, so they need some sort of boost and some sort of help. I want to ask you what impact this will have on the low-end smartphone market. Does it take Nokia out of the game?

That’s an interesting one, because Nokia really have two main platforms. They have Windows for the high end, and have this Asha platform that we’re using for the low end of the market. And so, if possible, we don’t know ’cause we don’t know exactly what the strategy would be of Microsoft, but it’s possible they make deemphasizes or shut down Asha is every possible. And that’s actually good for the rest of the low-end players, which is Samsung, ’cause Samsung is actually very strong in both high end and low end, and the Chinese such as Lenovo, Coolpad, ZTE, Huawei. So I think it could be potentially very beneficial for those players it that is, if Microsoft does deemphasize the low-end platform.

Now, as a result of this big deal, Stephen Elop, who was the CEO of Nokia, on Monday stepped down as a CEO. Now he’s going to be the head of devices at Microsoft. We do know that Steve Ballmer is going to be leaving as the CEO of Microsoft. There is some speculation that Stephen Elop might succeed him. Do you think he has the right DNA to lead Microsoft and to create a new vision for Microsoft?

Yeah, it’s really clear to me. I mean, I think obviously that decision is for board of Microsoft. And from my perspective, you know, I look at Microsoft and I think they’re very good at the enterprise side. And they’ve tried many times on the consumer side, and failed. And so I think the movement to use someone like Stephen Elop focusing more on devices is probably not a good strategy yet. So I would bet to default with that.