$7.2B smartphone business sale seen as a win for Nokia, major gamble for Microsoft

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Comments

  • Reply 21 of 59

    Quote:

    Originally Posted by iRon man View Post



    Don't forget Nokia has been a huge worldwide brand, and previous dominator of the low price market.



    The name is instantly known to most people, the only problem is that it is known as a big name from the past.



    It's hard to think of buying a business in decline as a smart move.



    Then you have the problem of such a well known brand taking over Nokia... If MS took over the Apple brand would people assume nothing would change?



    I think most people will think MS is going kill any desirability left in Nokia.



    But... Time will tell, huge restructuring etc and a fresh face for CEO?




    If Microsoft really wanted to fix things then replacing Ballmer a long time ago with damn near anybody would have been a smarter move then this deal.  jmho

  • Reply 21 of 59
    Steve felt it was his duty to f*** up one last time before let it go!

    What exactly did he spend $7.2B for???
  • Reply 23 of 59
    jungmarkjungmark Posts: 6,918member
    Let's hope this isn't the next [of] Kin deal.
  • Reply 24 of 59
    Don't think for a moment though that this isn't a company decision, and not just solely Balmers.

    It's not like they'd let a guy on his way out make spontaneous purchases a few billion...

    Maybe they thought if they didn't someone else would jump in there and buy Nokia first?
  • Reply 25 of 59
    gazoobeegazoobee Posts: 3,754member

    Quote:

    Originally Posted by PhilBoogie View Post





    Indeed. Or, "the blind leading the blind".



    This is certainly a victory for Nokia whilst MS ususally gets confused with the tech they purchase, if they need to integrate it. Personally I see fail written all over, but strangely I hope to be proven wrong. The WP8 interface at least is different, though I don't like the cut off text and the live tiles don't do anything for me.



    Nokia used to have pretty easy to use menus, but those were dumb phones. Did they have anything smart in their smartphones? Easy to use menus and all that?


     


    I'm glad Nokia is coming out of it alright.  They made horrible phones IMO, but they are a grand old company that has been around for many decades.  It's nice to see them transform once again but still survive. 

  • Reply 26 of 59
    gazoobeegazoobee Posts: 3,754member

    Quote:

    Originally Posted by island hermit View Post




    I think Microsoft's Board is rudderless. They've hit some choppy seas and nobody knows what to do. Panic has set in.



     


    The "rudder" is supposed to be Bill Gates, but if you ignore his glowing autobiography, his tech "vision" has been completely wrong more times than Balmers.  I think this shows that while they got rid of Balmer, they are still executing on his general plan to consolidate everything under one roof, double-down on following Apple into the hardware market, and ignore the many sensible suggestions that they should get out of the consumer sphere altogether.  


     


    All good news for Apple.  Microsoft cannot possibly execute this plan, but it will be three to five years before they realise it and start paring things away or changing course.  


     


    They will have to buy a PC manufacturer next, to continue on this path (to oblivion). 

  • Reply 27 of 59
    maestro64maestro64 Posts: 5,035member


    When Elop left M$ to go to Nokia I said he was sent there to help M$ buy them, here we are 2 yrs later and Elop is now coming back to M$ with probably a big bonus for the sale of Nokia. At least M$ did not over pay as Google did for Motorola. M$ now have access to all the Nortel mobile communication patents as well and now all of the Nokia ones. 


     


    Google thought they had a strong position in the patent wars with the Motorola treasure trove, but the courts many them radio active. Now Apple and M$ have a stock pile of patents to defend against Google.

  • Reply 28 of 59
    mstonemstone Posts: 11,510member


    "Designed by Microsoft in Finland" just doesn't have the same ring to it as Apple's slogan.

  • Reply 29 of 59
    freerange wrote: »
    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...

    Maybe this arrangement has Microsoft play the part of the "bad guy" so those thousands of workers will be fired in a year or less. Shifts the blame and the liability to Microsoft. They have no long-term ties to those workers.
  • Reply 30 of 59
    How is it that Apple was able to create a game-changing smartphone from scratch, and Microsoft with all it's touted talent has to buy a ready-made solution? Maybe Apple really IS "Different," and it's not just hype.
  • Reply 31 of 59
    when dinosaurs mate...
  • Reply 32 of 59


    OMG! I have to admit I was surprised by this! So the new Phones will no longer carry the Nokia brand? Will they just be called Microsoft phones? Strange how Microsoft has chosen to follow the Apple route and become a Software AND Hardware company in this business segment... Designed by Microsoft in Redmond"? LOL...





    So with Apple, Google and Microsoft all offering complete solutions... what will Samsung, LG, HTC and Sony do? Will they release their own OSs? Will they simply fork Android and linger on Google until "big brother" decides otherwise? It'll sure be interesting to see how it all unfolds in the coming months-years...

  • Reply 33 of 59


    Microsoft got patents to things like pureview.  It also now has the patent agreement nokia had with qualcom. Microsoft also got any Patents that nokia shared with qualcom. The Microsoft PDF states they got over 8500 patents with the purchase. This purchase also gives Microsoft an option to have a perpetual license to nokias patents that they did not sell to Microsoft.


     


    So it does benefit Microsoft for the patents alone.

  • Reply 34 of 59


    Consumers don't care about Windows Phone *already*, with all of Nokia's and MS' combined effort. 


     


    What's going to change that will make this redundant platform (in light of Android and iOS) relevant?


     


    Who cares for or wants a Windows Phone when you've already got iOS at the Premium end, and Android serving all other price-points?

  • Reply 35 of 59
    richlrichl Posts: 2,213member

    Quote:

    Originally Posted by murman View Post


    This is supposed to change what? Nokia already makes Windows phones, so Nokia will lose Symbian completely for the Asha line? Fire Ballmer now b**ches.



     


    Nokia's Asha line doesn't use Symbian, it uses Nokia OS. Symbian died with the Nokia 808 Pureview.

  • Reply 36 of 59
    This could be a loser deal for MSFT for many reasons, however I don't see why not having use of the Nokia brandname would be one of them. They could brand future phones from this acquisition by Microsoft, or something else by Microsoft, can't they? Microsoft, for all its failures still remains a strong brand.
  • Reply 37 of 59
    jragostajragosta Posts: 10,473member
    rajaram wrote: »
    This could be a loser deal for MSFT for many reasons, however I don't see why not having use of the Nokia brandname would be one of them. They could brand future phones from this acquisition by Microsoft, or something else by Microsoft, can't they? Microsoft, for all its failures still remains a strong brand.

    For the latest on what happens when a software company spends billions of dollars buying a hardware company, let's return to the Google - Motorola Mobility saga:

    http://www.fosspatents.com/2013/09/german-appeals-court-lifts-googles.html
    German appeals court lifts Google's bogus patent injunction over push email against Apple's iCloud
    Google wasted a ton of money on Motorola's patents. As of today, it has zero -- I repeat, zero -- enforceable patent injunctions in place against Apple and Microsoft, after almost three years of litigation. By contrast, Apple and Microsoft have scored a number of real wins against Motorola Mobility.
  • Reply 38 of 59
    MarvinMarvin Posts: 14,739moderator
    As part of the deal, Microsoft will be able to use the Nokia brand in a limited capacity on the company's "feature phone" platforms. Nokia will be unable to license its brand for use with mobile devices for a 30-month period after closing, and will not be able to use the brand on its own products until the end of 2016.

    The sale of its handset division to Microsoft, as well as the buyout of the Nokia Siemens Network, has now transformed Nokia into an network infrastructure focused business, Um said. Microsoft, meanwhile, has inherited a business "fraught with peril given competitive forces and its limited product acceptance."

    I don't suppose it matters much that Microsoft is venturing into hardware given that other OS makers compete with hardware vendors. Right now, Nokia is selling 7.4m smart phones per quarter vs Apple at 31m. They sell 53.7m dumbphones too. After Nokia's 32,000 staff join Microsoft, they can make moves to stop selling dumbphones and migrate dumphone users to Windows smartphones. If they all migrate, that could give Microsoft over double Apple's quarterly unit share (Nokia is the 2nd largest phone manufacturer in the world, Samsung 1st when dumbphones are included). The Nokia average selling prices are low though: $157 for a smartphone and $26 for a dumbphone and currently they lose money on them. Not only that, Nokia's YoY smartphone sales actually fell significantly from 10.2m to 7.4m.

    Microsoft's strategy is outlined here:

    http://www.microsoft.com/en-us/news/download/press/2013/StrategicRationale.pdf

    They are using offshore cash for the acquisition so they say shareholders aren't impacted. Their current gross margin on Windows Phone OS royalties is <$10 per unit, with hardware, they plan to get that over $40 per unit. They note that operating income breaks even when they hit 50m smart devices.

    They estimate that the smartphone market in 2018 will have 1.7 billion units and if they have a 15% share, they'll make ~$45b revenue per year and with 5% operating margins, that's $2.3b (per year in 2018 compared to Apple's 2012 net annual income of ~$40b).

    They are acquiring over 8500 design patents, the Lumia and Ash brands and a 10-year license to make Nokia-branded feature phones. They are licensing all 30,000 utility patents on a better deal than previously. They note that all together, they will have the most cost-effective patent arrangement for smart devices. The idea here I guess being that they can get their costs lower than competing devices.

    Maybe it will work out for them. You know what they say, companies that make crappy software should make their own crappy hardware too.
  • Reply 39 of 59

    Quote:

    Originally Posted by Suddenly Newton View Post



    That is exactly Microsoft's strategy: stubbornly fight against an entrenched market leader until they fold. Their plan is to relentlessly execute on Ballmer's "devices and services" strategy until (they hope) their competition stumbles. What other hope do they have? Microsoft has the reserves to fight a losing war, whereas a Nokia, Palm, and BlackBerry don't. It was inevitable that MS would buy one of them, and obvious which one.


    That's the difference. This time, they do not have the reserves to fight Apple.


     


    But frankly, Apple is out of their reach since 98, they will never touch the premium segment again. What about the rest?


     


    Microsoft also does not have the reserves to fight Google and Samsung. Even if they have the money, Google has the brain. Proof? Use a sub 800 windows computer. Use a sub 400 android device. Use Google's vs Microsoft's services.


     


    Google already won that war.

  • Reply 40 of 59
    I had a glimmer of hope for Microsoft's next CEO before this move by Ballmer, but now, not sure. It will take them years to find direction for the company. This move takes them one step back. Balmier is trying to recreate his last success, Xbox, in the cellphone world. But this market is different, ur not simply competing against Nintendo and Sony, ur competing against 100 models. This was the only obvious move he had left, but not a good one. I can't imagine any companies creating more windows phones anymore, or trying their best anyway. Microsoft is finally seen for what they always were, a company that copies to make quick cash. They were never anything more. Android beat them to the punch this time, so there's no place for them. I hope they learned more than just to copy quicker next time.


    Consider this timeline:

    20 months • January 2008 to September 2010, Elop worked for Microsoft as the head of the Business [Office] Division,

    --- months • September 2010, it was announced that Elop would take Nokia's CEO position

      6 months • February 2011 -- leak of Elop "burning platform" memo to press
                        February 2011 -- Elop officially announced the new strategy for Nokia, which included the discontinuation
                        of both of their in-house mobile operating systems, shifting its smartphone strategy to Microsoft's Windows Phone.


    It appears to me, that if Elop gets control of MS (with Gates backing) -- he will attempt to take drastic action in less than a year.

    I have never met Bill Gates (and don't know if he is shrewd enough) -- but this could have been the plan all along:

    1) Cut Nokia Phone down to size (lean and mean)

    2) Groom Elop for potential MS CEO

    3) Acquire Nokia/Elop
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