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Microsoft to buy Nokia's cell phone business for $7.2B, will license patents and services - Page 3

post #81 of 109
Quote:
Originally Posted by drblank View Post

Apple has always kept most of their acquisitions pretty small and to companies that are TYPICALLY not publicly traded and they usually go for companies that have technology that is key for future business whether it's s/w and/or h/w based.  They do this for a variety of reasons.  It doesn't cost much to buy a company for tens or hundreds of millions, they are kept under the radar of the SEC and competitors.   Buying these big stock deals is not only pricey, but they sometimes don't offer much other than a big headache and it can sometimes take 10 to 40 years to fully recoup the money.  If you look at the P/E ratio and how much cash on hand/long term/short term cash, the time it takes to recoup the money isn't worth it.  Let me give you an example.


Let's say a company had a P/E ratio of 35 and Apple paid $10 Billion, and the company had $1 Billion in cash.  So, it actually costs Apple $9 Bil of actual cash, but it might take 30 years or so since the company they are buying is already sold very high in relationship the amount they bring in on a yearly basis.

 

Apple has to look at the business in what they are buying, what they need to keep, etc.

 

Why would Apple need Nokia?  For patents?  If Microsoft buys the company and the associated patents, then Apple may already have access to them due to their agreement with MS.  Nokia has some mfg/assembly capabilities.  Well, to switch Nokia production lines over to Apple would take a while, while it's probably easier and faster to add production in China with Foxconn, Pegatron, etc.  so that's not a reason.   So, what's left over? to continue selling and supporting existing Nokia products for several years?  Apple doesn't want that headache.  What other reason could there be?  To prevent someone else buying the company?  No profit in that. 

 

There are only a handful of publicly companies that I could see a potential buyout for Apple that would make sense.  But there are still too many roadblocks in the process.

 

I think it's better for the most part to stick with smaller technology companies where they can gobble up and actually use the technology and people to create future products.

 

It's really hard to resurrect a large failing company.  HP failed with Palm, Dell's failing with Wyse.  I think it would be pretty close to impossible to resurrect Blackberry at this point.  I honestly don't know what they have in terms of patents that actually worth buying.

 

 

Apple put a bid in on Palm. It was rumored Apple's plan was to run it as an independent subsidiary and allow it to continue selling phones. It would have been brilliant if it worked out because it would have allowed Apple to push the Palm OS on carriers in the US that Apple was not allowed to sell the iPhone because of its five year deal with AT&T. This likely would have put a big hurt on Android back when Palm OS was far superior. 

post #82 of 109
Quote:
Originally Posted by Tallest Skil View Post

It'll work out great for them! Now they can avoid failures like the Zune, where they controlled the hardware… and… the software… Well, at least they won't screw up like they did with the Kin, where they controlled the soft… ware and the hardware… But seriously now, really, they can't screw up like they did with the Surface, where Microsoft was critical in the design of the software… and… the… hard… Look, but… what about the Xbox! There Microsoft only had control over the… 

Geez, Redmond, get it together.

Then I guess making the hardware and software is not the magical formula everyone makes it out to be.
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post #83 of 109
Quote:
Originally Posted by Cash907 View Post

Sounds good to me. The latest Lumia is a great phone. If I didn't want to re-buy all the apps I've purchased for iOS, I'd strongly look at switching instead of picking up a 5S next week. The camera alone is like night and day compared to everything else out on the market right now.

Fanboys can poo poo all they want, but strong competition is a great thing for consumers, so I hope good things come of this.

Be wary.  I recently bought a Nokia 720 - lovely looking phone - to use as a GPS device, and for that it is fantastic.  I think Nokia's Here maps is the best mobile GPS and maps solution available because it's data is very comprehensive and up to date and because it doesn't require a data connection - you can download the maps and associated data - points of interest etc - to the phone.  Much better than either Google or Apple's solutions.

 

Now I had thought to evaluate the 720 for use as a phone, but I have concerns over data privacy so won't use it for that.  WP8 requires you to set up a Live/Hotmail account with Microsoft to which the phone is registered.  It will then sync all your contacts to this account by uploading them.  There is no opt-out from this.  I find that unacceptable.

 

WP8 has a host of what to me are flaws, which I won't go into.  Samsung's Bada OS is better thw WP8.

 

As a GPS device though, it is superb.  It gets a lock in seconds and will even get a lock indoors to some extent.

Quote:
Originally Posted by drblank View Post

Since Apple and Microsoft have a patent agreement, then Apple can use Nokia technology patents, right?

 

I would imagine that agreement is for Patents Microsoft owns and is very unlikely to include patents they licence from other sources.

 

post #84 of 109
Quote:
Originally Posted by cnocbui View Post

Be wary.  I recently bought a Nokia 720 - lovely looking phone - to use as a GPS device, and for that it is fantastic.  I think Nokia's Here maps is the best mobile GPS and maps solution available because it's data is very comprehensive and up to date and because it doesn't require a data connection - you can download the maps and associated data - points of interest etc - to the phone.  Much better than either Google or Apple's solutions.

Now I had thought to evaluate the 720 for use as a phone, but I have concerns over data privacy so won't use it for that.  WP8 requires you to set up a Live/Hotmail account with Microsoft to which the phone is registered.  It will then sync all your contacts to this account by uploading them.  There is no opt-out from this.  I find that unacceptable.
Thats not strictly true. The only requirment to have a microsoft account on the phone is if you want to use the app store. If you dont associate one then you can just have your contacts on the phone and not sync'd anywhere.

It also does not sync every contact you have with your Microsoft account. The contacts list will display contacts from microsoft, google, twitter, facebook etc, and when you create a new conact it asks you which service you want to store it in. Data from one isnt ever copied to the other.
post #85 of 109
Quote:
Originally Posted by Rogifan View Post

So basically Elop was a Trojan horse and he's now back at Microsoft, most likely to replace Ballmer.

 

Maybe.  I think the good news here (for Apple) is that this move is a continuance of Balmer's latest strategy and it would have had to be approved by the board.  So to me, it seems like they have fired Balmer, but are perhaps continuing with his stupid ideas.  So it's less likely that a new CEO will differentiate the company strategy wise and change it to something that might be a winning strategy.  

post #86 of 109
What Id most like to know now is what will happen to Nokias apps and the apis they've made for windows phone. Is Microsoft now taking over these or does Nokia keep them. I'd guess all the here ones stay with Nokia but will they get the same effort as they are real features of the lumia phones.

And what about all the imaging apps and Nokia music. I cant see Nokia music lasting if MS now has it but the apis for 3rd party apps were good.

Also in guessing the lumia tablet is now dead. There's no real point MS making Lumia tablets and Surface tablets which is a shame.
post #87 of 109
After seeing the news regarding "Microsoft acquiring Nokia mobile division" I looked up MSFT's actual press release. This is one of the most moronic deals I have ever seen in the tech space, and having worked for the #2 and #3 law firms in Silicon Valley I have seen a lot of deals.

MSFT actually acquired nothing more than the employees and factories for the phone division, not the name, which they will need to license from Nokia, and "Nokia will continue to own and manage the brand". MSFT will also only license the Nokia HERE mapping program under a four year deal, and Nokia related patents for 10 years and, very importantly, on a non-exclusive basis. They did not acquire some of the most valuable assets - mapping and the services businesses. Thus MSFT has acquired the money losing operations, which includes 10's of thousands of employees and uncompetitive manufacturing facilities based on geographic location, and left Nokia with the profitable services, patent licensing, and the potential for advertising and licensing for the mapping business. BRILLIANT!!!! This should work out well for them, in a Kin and Surface sort of way...
post #88 of 109
Quote:
Originally Posted by simtub View Post

Microsoft is now going to have a huge arsenal of Patents. Wonder how the landscape will change from here on.
This is a deal done by morons - they only have a 10 year NON-exclusive license on the patents, which Nokia will continue to own.
post #89 of 109
Quote:
Originally Posted by timgriff84 View Post


Thats not strictly true. The only requirment to have a microsoft account on the phone is if you want to use the app store. If you dont associate one then you can just have your contacts on the phone and not sync'd anywhere.

It also does not sync every contact you have with your Microsoft account. The contacts list will display contacts from microsoft, google, twitter, facebook etc, and when you create a new conact it asks you which service you want to store it in. Data from one isnt ever copied to the other.


So you are safe so long as you don't ever want to put apps on it?

post #90 of 109
Quote:
Originally Posted by RichL View Post

Nokia has a Windows RT tablet in development. It was shown off last week and looks very similar to the Lumia range of phones.

WHY?

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post #91 of 109
Quote:
Originally Posted by EricTheHalfBee View Post

Sounds like a great idea to me. Now MS can be in control of the hardware and software (you know, like Apple does).

Oh, you mean like Zune, Kim and Surface? Duh!!!!
post #92 of 109
Google, take note. This is how you buy a dead dinosour of a company; $5 billion not 12!
post #93 of 109
Quote:
Originally Posted by BARCODE View Post

Google, take note. This is how you buy a dead dinosour of a company; $5 billion not 12!

Net Google cost was $7B+ deducting the cash MM had on hand and less the sold off set-top business. While Google bought the IP too, MS is just getting a license to it yet paying the same $7B+. Neither deal looks all that great to me but Google's appears to be the better of the two IMO.
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post #94 of 109
Quote:
Originally Posted by Gatorguy View Post


Microsoft doesn't get ownership of even the phone-related patents if I understand correctly. They are non-exclusively licensed to MS for a 10-year term, but ownership remains with Nokia.

The 10 year deal is giving Microsoft naming rights to use the name Nokia.  That's just for the naming rights, so Microsoft can spit out mobile devices with the name Nokia on it.  That's got nothing to do with the "technology" patents is how I read it.

post #95 of 109
Quote:
Originally Posted by BARCODE View Post

Google, take note. This is how you buy a dead dinosour of a company; $5 billion not 12!

Actually, it's $7.2 and there is about $7 Billion in cash that they will get access to, so it's going to actually cost LESS than $7.2 Billion, the only problem is how much of the company is losing every year.

post #96 of 109
Quote:
Originally Posted by drblank View Post

The 10 year deal is giving Microsoft naming rights to use the name Nokia.  That's just for the naming rights, so Microsoft can spit out mobile devices with the name Nokia on it.  That's got nothing to do with the "technology" patents is how I read it.

Then "you're reading it wrong". 1wink.gif

The patents will still be owned by Nokia. Microsft only gets a license to them, and not even an exclusive one.

EDIT: You're claiming there's $7B cash coming from Nokia with the sale of the mobile division???
I'm shocked if so, seriously doubting that's the case. Do you have a citation showing Microsft getting $7B in cash from Nokia in the deal? When Google bought Motorola Mobility they bought the entire company (it had already been spun off from Motorola some time before that). In this case MS is simply buying a division of Nokia which I wouldn't think had it's own cash accounts.
Edited by Gatorguy - 9/3/13 at 10:08am
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post #97 of 109
Originally Posted by NasserAE View Post
So this won't happen in 300 years?!

 

I've always hated when future movies shoehorn in product placement like that. The one instance of it I don't mind is Pan Am in 2001, as that's less product placement and more a statement on the future of how space travel would operate. 

 

But just like Pan Am in 2001, Nokia won't live to see Kirk wreck an old car.

 

Originally Posted by dasanman69 View Post
Then I guess making the hardware and software is not the magical formula everyone makes it out to be.

 

There is absolutely nothing that could have caused you to come to that conclusion.

Originally posted by Marvin

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post #98 of 109
Quote:
Originally Posted by cnocbui View Post

I think Nokia's Here maps is the best mobile GPS and maps solution available because it's data is very comprehensive and up to date and because it doesn't require a data connection - you can download the maps and associated data - points of interest etc - to the phone.  Much better than either Google or Apple's solutions.

Haven't tried Here on a phone, but their website is way ahead of Google's Maps IMO. The satellite imagery is vastly newer for the parts that I've been viewing, for one thing. I really hope MS won't screw things up here.

iOS downloads large chunks of the map while you're browsing. So when you view a route you're about to take while still on the hotel WiFi and hop into the car and disabled international roaming the Maps app still works. You don't have to download it yourself.
Quote:
Originally Posted by drblank View Post

Actually, it's $7.2

$7.18B (link) but now I'm splitting hairs, or as the Dutch say, fucking ants.
post #99 of 109
Quote:
Originally Posted by Tallest Skil View Post

There is absolutely nothing that could have caused you to come to that conclusion.

Nothing but the multitude of comments extolling the virtues of making both hardware and software versus using software created by a 3rd party.
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post #100 of 109
Originally Posted by dasanman69 View Post
Nothing but the multitude of comments extolling the virtues of making both hardware and software versus using software created by a 3rd party.

 

Here is the information as you know it: Apple controls hardware and software successfully. Microsoft controls hardware and software unsuccessfully.

 

From this, you have determined: Controlling hardware and software is not successful.

 

Come off it.

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Originally posted by Marvin

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post #101 of 109
Quote:
Originally Posted by Gatorguy View Post


Then "you're reading it wrong". 1wink.gif

The patents will still be owned by Nokia. Microsft only gets a license to them, and not even an exclusive one.

EDIT: You're claiming there's $7B cash coming from Nokia with the sale of the mobile division???
I'm shocked if so, seriously doubting that's the case. Do you have a citation showing Microsft getting $7B in cash from Nokia in the deal? When Google bought Motorola Mobility they bought the entire company (it had already been spun off from Motorola some time before that). In this case MS is simply buying a division of Nokia which I wouldn't think had it's own cash accounts.

NO, I didn't say it did, but I'm sure a certain amount would.  That's usually what happens, I'm sure the amount of cash that's affiliated with the Mobility unit STAYS with the mobility unit if they are operated separately.  That's usually how things happen.  Obviously, the information is not exactly how I would say is complete, detailed and specific enough to assume either way.  which might be lending to why there is different understanding.  But it was VERY clear that around $2 Billion was associated specifically with the use of the name Nokia on products for a period of 10 years.  The $5+ Billion was associated with buying the assets (cash is part of that, as are patents are typically part of what is called an ASSET) along with personnel, buildings, etc. of the mobility unit.

 

The mobility unit not having it's own cash accounts?  Really? Well, how do they pay for things?  With a IOU, they sell their products for CASH, they pay for things for CASH, they store the profits (CASH) in bank accounts and invest CASH in various bonds and securities.

Every business has cash accounts associated with it.

 

No, Google didn't buy the entire company, they bought the Mobility division which has their own P&L, which is essentially doing the same thing.  The various specifics I don't know only from what I've read, which is very superficial, but having a finance degree, which I don't know if you have one, and have spent time looking at annual reports and financial statements of companies since I was a little kid back in 1969, I think I have a little better understanding of how companies operate.

 

Microsoft would be out of their freaking minds to spend $7.2 Billion on just employees of a company.  In order to sell a product, they have to have access to licensing of not only trademarks, but patents, etc. Othewise, it would be completely worthless to them. And Nokia does have cash associated with that division so that money WOULD be transferring ownership.


Edited by drblank - 9/3/13 at 10:41am
post #102 of 109
Quote:
Originally Posted by Tallest Skil View Post

Here is the information as you know it: Apple controls hardware and software successfully. Microsoft controls hardware and software unsuccessfully.

From this, you have determined: Controlling hardware and software is not successful.

Come off it.

I just said that it wasn't a magical formula that would automatically work, never did I say it wasn't successful but the truth is that more companies that make both are failing a lot more than companies that are successful with it.
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post #103 of 109
Quote:
Originally Posted by drblank View Post

NO, I didn't say it did, but I'm sure a certain amount would.  That's usually what happens, I'm sure the amount of cash that's affiliated with the Mobility unit STAYS with the mobility unit if they are operated separately.

No, Google didn't buy the entire company, they bought the Mobility division which has their own P&L, which is essentially doing the same thing.

Really you did:
"Actually, it's $7.2 and there is about $7 Billion in cash that they will get access to, so it's going to actually cost LESS than $7.2 Billion"
was your quote.

There's zero indication that any Nokia-held cash will be included in the asset transfer. That wouldn't even make sense.

...and yes, when Google bought Motorola Mobility they bought "the entire company" which included plant, equipment, IP and any other assets along with outstanding obligations. It wasn't just a division of Motorola. Nokia simply sold off a division of their company, Nokia devices and services (and apparently not even 100% of that based on the wording), and not a separately operated subsidiary.

Know what's even stranger? Nokia can even start building and selling smartphones again in 30 months if it wishes to.
"Upon the closing of the transaction, Nokia would be restricted from licensing the Nokia brand for use in connection with mobile device sales for 30 months and from using the Nokia brand on Nokia’s own mobile devices until December 31, 2015." So what the heck is MS getting for their $7B? Rental of the Nokia name, Nokia-owned plant and equipment involved in producing smart-devices and a non-exclusive license to Nokia IP.

EDIT: Here's the Nokia press release which may help you understand what Microsoft is paying for
http://press.nokia.com/2013/09/03/nokia-to-sell-devices-services-business-to-microsoft-in-eur-5-44-billion-all-cash-transaction/
Edited by Gatorguy - 9/3/13 at 12:56pm
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post #104 of 109
Quote:
Originally Posted by dreyfus2 View Post

Well, they have quite some debt, too. And the latest ER's cash/equivalent positions do not reflect the 50% of NSN acquisition from Siemens yet (which reduces cash and increases debts), as it only becomes effective in the current quarter.

What I am not really clear about right now is in how far Nokia's share holders could boycott this deal, as the remainder of Nokia is really worth nothing.

IMHO it's really a pretty good deal for Nokia. In reality they aren't even selling off the phone business entirely. They're renting it out. They've only told MS they'll be granted an exclusive to the Nokia name for phone marketing for 30 months. After that Nokia is free to build Nokia-branded phones (and tablets) again OR even license the brand to someone else in addition to MS if I'm understanding the agreement.

Microsoft doesn't get any Nokia IP, just a 10-year license, it doesn't get ownership of the Nokia name for phones, just an exclusive "rental" period, and it gives up a cross-license to Nokia of all applicable MS patents.

... oh and pays Nokia over $7B US in bonds that Nokia can cash in as needed while disgorging a division that's become a drag on Nokia earnings. That's supposed to be a bad deal for Nokia? Seems more like winning a game of brinkmanship to me.
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post #105 of 109
So Nokia is failing too, wow Microsoft is doomed.
post #106 of 109
Microsoft is the undeniably the dirtiest company on earth. How could anyone send an executive to fix and acquire that company either part or full?
post #107 of 109
Quote:
Originally Posted by dillio View Post
 

This is what I call a "big, bold move", the kind Apple has not yet made. I wonder what someone had in mind when they used those words.

 

I guess it depends on your definition.  I would consider releasing the first iPhone a big, bold move.  I'm a tech nerd so of course I was drooling when I first saw it, but there were no guarantees that it would be a successful product at that time.  The smart phones and tablets that existed before the first iPhone weren't exactly beacons of hope for guaranteed success.

post #108 of 109

@jodyfanning

 
I didn't know Germany is such a big deal, yes the universe perhaps.
post #109 of 109
In case anyone is confused by Nokia keeping all the patents rather than selling them to MS along with the phone business, Nokia has signaled a more aggressive licensing policy that may include existing licensees.

http://arstechnica.com/tech-policy/2013/09/nokia-confirms-patent-attacks-may-continue-after-microsoft-purchase/
Edited by Gatorguy - 9/4/13 at 3:56am
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