Microsoft’s announcement last week that it will buy Nokia’s devices and services division for $5.5 billion caught many in the tech industry unawares. Nokia is by far and wide the largest manufacturer of Windows Phone handsets, and accounts for over 80% of the market share in this category. It was also mentioned during the official announcement that a major factor that fast-tracked the deal was the outright acquisition of the Asha series. When you look at the numbers, Microsoft’s move to buy Nokia’s devices unit makes sense. In the second quarter of 2013, Nokia sold 4.3 million Asha devices, and that was considered a bad quarter for the Asha series.
Asha series under Nokia
The first devices in the Asha series were feature phones that handled basic tasks like calling and texting very well. As the series progressed, so did the features that were included in the mobiles, culminating in the Asha 501. The Asha 501 offered a wide array of features like a touchscreen, Facebook and Twitter integration and a full-fledged web browser. The device was also very well built and came in a variety of colors, which made it more enticing to consumers.
Nokia launched the Asha Touch platform with the Asha 501 that featured a lot of elements from the Series 40 platform. The end-goal for Nokia was to create a thriving ecosystem of content for Asha devices. However, it has not managed to do as the series was largely ignored outside India.
Although the Asha 501 offered an alternative to users wanting to buy a budget device, it could not hold its own against low-cost Android devices like the Galaxy Star from Samsung, which won out in the end.
Microsoft’s outgoing CEO Steve Ballmer has mentioned that Microsoft will try to delineate the division between the Lumia and the Asha series, and that they intend to add more features to the Asha devices. He also mentioned that future Asha mobiles will feature SkyDrive integration along with Office and Xbox. Devices like the Asha 501 give Microsoft access to a more diverse category of customers and a firm foothold in emerging markets.
The Asha 501 price in India is currently Rs. 4,625, while the Lumia 520, which is the most affordable Lumia device, costs Rs. 8,000. Microsoft wants to create a device that falls in the middle, something that costs more than the Asha 501, but less than the Lumia 520. It makes sense as most budget Android devices fall in this segment. If Microsoft were to offer a device that runs on the Windows Phone platform that will be available for Rs. 6,000 to Rs. 7,000, it will solidify its position in the budget segment.