As I mentioned on Twitter this morning, I'm still forming my opinion on the Microsoft/Nokia deal, but I can think of one good reason why Microsoft did this: when it comes to mobile their options are to win or to die.
Everybody already knows that mobile is the future of computing. For a company like Microsoft, not being a major player in mobile means an inevitable slide into irrelevance. As good as Windows Phone might be, its ecosystem is still small compared with those of iOS and Android, and no matter how you slice it, the rise of Apple, Google, and Samsung (among others) in mobile has created an existential challenge for Redmond.
If buying Nokia's handset business would give them even a slightly better chance of overcoming this challenge, well, that's certainly not so hard to understand. Especially because if it doesn't work out, it won't matter because Microsoft will be dead.
Or at least the Microsoft that we've known will be dead. I don't think it's overstating things to say that as mobile becomes synonymous with computing, being the company that defined computing for a good 15 years, not having significant marketshare in handsets and tablets is a big problem, as sooner or later sales of Microsoft's twin franchises of Windows and Office will erode to a point where the company collapses. I'm sure there are probably plenty of ways that Microsoft could survive without being a dominant player in mobile. But for the company to abandon its mobile pursuits would mean retreating and becoming some sort of IBM-like enterprise services business. If all this doesn't work out that may be where Microsoft ends up, but for the time being it's hard to imagine them not charging forward with mobile.
Now it's clear that buying Nokia's handset business doesn't automatically solve their problems -- the reason they could afford to make this purchase is because Nokia hadn't yet been successful at selling Windows Phones -- but it does give Microsoft greater control over its destiny when it comes to mobile (there is speculation that Nokia was threatening to switch to Android), not to mention a bigger slice of the revenue from each handset sale.
Will it work? I don't know. But unless a radical course correction is forthcoming -- and I don't see any evidence that is being seriously considered -- when it comes to mobile and buying Nokia's handset business, Microsoft has nothing to lose that it wasn't already going to lose.