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Microsoft Has Nokia's Hardware but Who Cares?

Microsoft began this trek last year when it announced the Surface tablet, which the company thought would narrow the gap between itself and Apple.

Instead, with Windows 8 having become a relative flop, the gap has only widened. There's no question the failure of both Surface and Windows 8 is the reason why Ballmer is leaving. Disagree if you wish. But I don't believe the next CEO wants to take the helm being behind two 8-balls (Windows and Surface) or Google and Apple -- take your pick.

By buying Nokia, Microsoft believes it can capture 15% to 20% of the smarphone market by 2018. Given that Microsoft currently owns only 3% share, this is a pretty aggressive bet, if you ask me. Also, it assumes that Apple and Google are just going to sit on their hands and let that happen.

Investors, meanwhile, aren't wasting any time casting their opinions. Given that shares of Microsoft have been down by as much as 5% this morning, the market's not buying it -- the same way that the market never bought into Surface or Windows 8.
[Read: <a target="blank" data-add-tracking="true" href=""><em>College Savings Withdrawal Strategies</em></a>]

Microsoft needs to develop a better track record of execution before anyone will care.

Right now, with Nokia coming on board, all Microsoft has done is buy itself a little bit more time as it seeks Ballmer's replacement. But as I've said on more than one occasion, Microsoft could have accomplished the same thing for a lot less by buying BlackBerry (BBRY).

At the time of publication, the author was long AAPL.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a co-founder of where he serves as CEO and editor-in-chief. After 20 years in the IT industry, including 5 years as a high school computer teacher, Saintvilus decided his second act would be as a stock analyst - bringing logic from an investor's point of view. His goal is to remove the complicated aspect of investing and present it to readers in a way that makes sense.

His background in engineering has provided him with strong analytical skills. That, along with 15 years of trading and investing, has given him the tools needed to assess equities and appraise value. Richard is a Warren Buffett disciple who bases investment decisions on the quality of a company's management, growth aspects, return on equity, and price-to-earnings ratio.

His work has been featured on CNBC, Yahoo! Finance, MSN Money, Forbes, Motley Fool and numerous other outlets.

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