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Ballmer: Nokia deal is a good thing for our hardware partners

Microsoft's CEO says that he's spoken to several device makers who are "enthusiastic" to hear of Microsoft's plans to acquire Nokia's phone business.

Microsoft plans to pocket Nokia's Windows Phone operations.
Josh Miller/CNET

You might think Windows Phone makers would be peeved to find out they're now competing against the very company that provides them software. Microsoft CEO Steve Ballmer has a different take.

In a conference call Tuesday with analysts and journalists, Ballmer said that he believes his company's $7.2 billion acquisition of Nokia's phone business "grows the OEM opportunity," adding that he's already spoken with OEMs -- an industry term for device makers -- who have shared their enthusiasm about the deal.

"I've talked to a number of OEMs who are more enthusiastic today than yesterday about their investment in Windows Phone," Ballmer said during the conference call.

Ballmer's comments during the call echoed those he made with an interview Tuesday with Bloomberg Television's Tom Keene.

"Nokia counts for well over 80 percent of Windows Phone volumes today, so I think we are in a position to accelerate through this acquisition. Certainly acceleration in Windows Phone is only good for Windows PCs and tablets and our partners in the PCs and tablets business seem to be quite enthusiastic because what is good for phone should be good for tablets and PC," Ballmer told Keene


Whether those partners actually feel as positively as Ballmer claims, however, isn't yet clear. For months now, a smattering of device makers have been licensing Windows Phone from Microsoft and competing against each other. With the Nokia acquisition, which is scheduled to close in the first quarter of next year, those same hardware makers are effectively competing against Microsoft -- the company providing the operating system.

The move follows Google's decision to acquire Motorola Mobility and get into the hardware business. Google has gone out of its way to separate Motorola from its software business and so far, Android phone makers haven't seemed to care about that close alliance. Microsoft is ostensibly betting on the same reaction.

Microsoft also discussed its hopes to see a return on its investment in Nokia. The company says that it needs to sell 50 million smart devices through the Nokia division for its operating income to break even. During the last quarter, Nokia sold just 7.5 million Windows Phone handsets, indicating Microsoft has a ways to go to meet that milestone.

Beyond that, Microsoft touched on its justification for the deal, noting that while its investment might be huge, it believes that through improved marketing effectiveness and the companies working together rather than in parallel, it should be able to show more value to customers.

This story has been updated throughout the morning.