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TMCNet:  Microsoft-Nokia deal: Smartphones to get cheaper [Hardware] [Times of India]

[January 25, 2014]

Microsoft-Nokia deal: Smartphones to get cheaper [Hardware] [Times of India]

(Times of India Via Acquire Media NewsEdge) NEW DELHI: Mobile phone users could look forward to a sharp fall in smartphone prices post Microsoft's acquisition of Nokia's devices business, as the larger scale could allow the combined company to reduce the price of its entry-level smartdevices and help attract users of the cheaper feature phones.


In an interview to ET, Microsoft India's group director for operator channel, Sharlin Thayil, said the company hoped to bring down all barriers to the smartphone segment, which may also lead to a relook at the future of feature-phones as part of the combined company's product portfolio.

"As time progresses, as scale goes up, price points come down. We'll keep evaluating that," Thayil said. He said Microsoft wants more and more consumers to convert to smartphones from feature-phones so that they are able to use the apps that the company offers on the Windows-powered devices.

Microsoft, which bought Nokia's devices biz, plans to bring down all barriers to smartphone segment; Gionee hopes to become a household brand in 2-3 years. Currently, Nokia's entry-level Lumia smartphone is priced around Rs 8,000-Rs 8,500, while its popular Asha series phone -- which it considers a quasi-smartphone but the industry considers a feature-phone -- comes for around Rs 5,000. Thayil said that issues such as phasing out the Asha series phone or replacing its operating system (OS) with Microsoft's OS were under review.

The Asha series portfolio has been the bread and butter for Nokia as it addressed the crucial gap between basic handsets and the smartphones, even delivering data services on a 2G network. Nokia's India head P Balaji had last month said the company's current focus on the feature-phone segment -- which still comprises over 90% of handset sales in the country --is aimed at converting these users into a Lumia smartphone user two years down the line.

"Asha has its own franchise and people love it. It is meeting the needs of a certain segment of people," Thayil said, adding, however, that as 3G networks expand, more feature-phone users will upgrade to smartphones.

According to IDC, India will ship around 60 million smartphones this year and another 110 million next year.

Thayil said both Microsoft and Nokia were working closely together on developing handsets, customer requirements and market strategies. Microsoft had on September 2 said it would buy Finland-based Nokia's phone business and license its patents for over $7 billion. They expect the deal to close in the current quarter.

With Nokia almost in the company's portfolio, Microsoft is now trying to transform itself from a software company to a devices and services one.

"We are in the process of strengthening our OS. Developing a common OS, what's on the PC gets adapted to our mobile phone," Thayil said. So, for example, it now hopes to deliver an uninterrupted experience to its users who could switch from one screen to the other without any obstruction or time lag. For example, when a user starts watching a game at home, and leaves home to go out somewhere, he or she can carry the game along and continue to play it, and once back home, can move it back to the bigger screen.

(c) 2014 Bennett, Coleman & Company Limited

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