India jewel in crown of Microsoft's Nokia buy

NEW DELHI: India could be a jewel in the crown in Microsoft's $7.2-billion buyout of Nokia's devices and services business as Finnish company's relatively healthier operations here and underlying growth potential will make it one of the most-promising market for the US tech giant. While Nokia has been struggling globally, pulled down by the smartphone onslaught of Android and Apple's iPhone, the company is a strong number two in India, though its share has been shrinking. Nokia till recently was the leader in the burgeoning Indian mobile phone market and has a 13.2% market share now in the second quarter of this year. Samsung, which snatched leadership from Nokia, has a 13.8% market share, according to IDC. Experts feel that an encouraging response to the Windows-run Lumia (it has a 5.4% share since its launch in December 2011) and a good share in the low-priced feature phone market (with the Asha series) makes India an attractive market for Microsoft when it attempts to rebuild the brand. India plays a big role in Nokia's global operations at present. It is the second-biggest phone market for the company globally, behind China, and is among the very few markets which are profitable. Notwithstanding the run-in with the government over tax matters, where Nokia is understood to have expressed its frustration to the authorities, the company has a robust manufacturing presence in India where it makes phones not only for the domestic market but also ships them to around 150 countries. Nokia's factory in Chennai is the largest manufacturing base for the company globally, and by February this year, the unit has rolled out 800 million units. The company has invested $285 million in the facility. The response to Lumia, where Microsoft and Nokia have both staked their future, has been encouraging, though the device has failed to be a blockbuster. India has emerged among the top three markets for the Lumia range globally and with the increase in offerings, the device may capture more numbers. "The performance of the Lumia is not bad, considering that it is a relatively new device and runs on the Windows platform, which is not as popular as Android," said Manasi Yadav, senior market analyst with IDC India.