Microsoft buys Nokia's mobile business Microsoft has announced it is buying Nokia's mobile devices and services business. Revealed in a flurry of press releases in the small hours of Tuesday, the deal will see Microsoft “pay EUR 3.79 billion to purchase substantially all of Nokia’s Devices & Services business, and EUR 1.65 billion to license Nokia’s patents, for a …
DUH! Look it up on various tech-sites. Various projects canceled by Nokia, Nokia phone market share shrinking, etc.
This is not really a shock... we kind of forgot about it. Nokia was already working on tablets too, so we will see how that pans out. So do they still remain as "Nokia Phones" or become "Microsoft Phones"??
I see HTC and Samsung (pretty much the only WP makers besides Nokia) dropping WP all together. They don't need MS. They don't need to pay for the privilege. They'll go after MS more so, if any thing. The big difference between Android and WP for other phone makers is that they can do pretty much what they want and not pay for it... compared to WP.
For the most part... as long as MS is in 3rd place, they will be somewhat happy. Blackberry will continue to go down, even thou they do make very good phones.
"The minute MS do anything with their patents against HTC or Samsung I'm quite sure that they'll drop winphones from their product range"
But MS don't need to care anymore. They can make better handsets, and if that fails, simple throw money at the problem until they become market leader...
Microsoft owns the lumia brand. Any current Nokia phones will remain to be called Nokia phones.
Any featurephones can be called Nokia Asha phones.
Any new phones will be called Microsoft Lumia or whatever Microsoft wants to call them. They just can't use Nokia on *new* smartphones.
"Any featurephones can be called Nokia Asha phones."
How much do you want to bet that the entire dumb handset and feature phone business gets offloaded to Lenovo or some Asian combine. I cannot imagine why Steve B. would have any interest in manufacturing these devices. MS is not going to become a phone manufacturer. They just want to be in the Smartphone business where they think they can be like Apple and make a squillion dollars.
Expect 70% of the acquition to be on the block immediately the deal is signed.
There's no need for a conspiracy. Mergers and acquisition talks are only panned to the public if there's a completing reason to do so, usually an attempt to manipulate the final price. Since this has obviously been in negotiation for a long time apparently everyone involved was happy with the price.
Honestly, I can't help but think some of them will launch a lawsuit. I mean in the article is basically says "We won't get a better offer any time soon" and considering how much more Nokia was worth before all this, well...
Not only that but this is kind've "out of the blue" I mean we all know Microsoft was going to buy them, I think Balmer wanted to wait for the value to drop further, but with his departure had to accelerate plans. But that means there was no real bidding etc for their shit. So at the same time I can't help but think some other big company (Samsung / Google etc) may step in and complain that they were never given a shot to bid on Nokia, which would get them the value they deserve.
Because lets face it, as dead as Nokia phones are right now, their patent trove is ripe for the picking. And I can see google wanting those patents to bolster Android. Even moreso if it's a shot in the kneecaps to Microsoft. 5.44 billion euro? Google spent more than double that on motorolla, and I can see them, if they get the opportunity, placing an equally high bid on nokia were they given the chance.
That unit of measure is known as a "By Thursday Lunchtime" in Android speak.
The actual deal won't go through until next year due to competition checks and due diligence etc... There is nothing stopping any other company putting in a hostile takeover bid, they could force a shareholder vote on a sale to a different company for more money. So this does not preclude that from happening.
Yep - this is great for Microsoft - they can make $40 per phone now instead of $10 via Nokia. And be a true one stop shop like Apple.
It's good for Nokia too - they were taking a long time to turn around the mobile business - and while they were forecast to return to profit next quarter thanks to Lumia sales growing at over 30% a quarter, I think they will make more money out of NSN and their mapping and patents divisions...
Haha tin foil hats ahoy!
Now while I would agree that yes it did look suspicious when Elop first moved to Nokia, let's get one fact straight - Nokia was already in the shitter BEFORE Elop came aboard. Remember the disaster that was the N97 and all subsequent touch-screen Symbian mobiles? That was all Nokia's fault. I had the Nokia N97 - Symbian on it was AWFUL.
Nokia only have themselves to blame by producing such rubbish that they made themselves incredibly vulnerable to a takeover, one that is finally completed now.
You really think Nokia could switch to another OS this late in the day?
Nokia can't just stop selling Windows Phones and then wait 12-18 months to start selling phones with Android or some post-Symbian OS. The transition to Windows Phone resulted in a huge loss due to end of line products and waiting for the new ones to pick up sales.
If you really wanted to see Nokia move on from Windows Phone then you're seeing it happen. Nokia could now acquire a small phone start up and get back in the game. Jolla would be an option:
http://www.bbc.co.uk/news/technology-22599877
Of course Nokia is focussing on mapping now and the recent announcement about getting their maps into cars shows were Nokia is heading. They are moving into being more of a technology and infrastructure company than a consumer products company. Lets not forget that Nokia has existed since 1865 when they produced electricity infrastructure products.
"So now we know why Elop was infiltrated into Nokia."
We knew it as soon as the burning platforms memo came out. Just look at the wreckage of companies he's left behind on his CV.
There's hope that what remains of Nokia brings back the people on the liferaft. They've still got the rights to use their patents, shame they have to start from scratch with manufacturing though.
...DROVE NOKIA'S VALUE TO THE GROUND by killing its entire Symbian, MeeGo etc business with ONE STUPID SENTENCE, A YEAR BEFORE ITS FIRST WP phone was due.
Aside of giving one percent chance for a WP breakthrough it was ALWAYS THE BALLMERIAN PLAN, to drive Nokia to the grounf thus dragging down the price and PICKING UP ITS EXCELLENT HARDWARE & DISTRIBUTION for next to nothing.
Ballmer's last revenge, NOKIA! :D
This incompetent, clueless, fat bald clown with anger issues never knew how to play any part of this mobile game, as a real beancounter at heart with no clue about technology he only knows one solution for everything: acquisition... and boy, the chair-throwing gorilla is one helluva guy at that, burning through so much money without ANYTHING to show I'd be actually surprised Nokia would be still around in 2-3 years.
Good bye, NOKIA and thanks for all the great phones beginning with my first GSM phone, a mighty 2110 around 1994-95.
I thought the Greeks had sailed home without bothering to loot the smoking ruins of Troy.
I expected this news six months ago, but thought its time had passed. Elop has done such a thorough job of burning Nokia and Ballmer poisoned carrier relations so badly that I expected Microsoft to leave Elop on his burning platform.
The Greeks were totally incompetent. They wrecked a competing commercial society, and then suffered a variety of misfortunes. Timeo danaos et dona ferentes? Just "Fear the Greeks" would have been enough.
On this reading, Elop is going to have to be very careful on his way from Finland to Redmond. He needs to watch out for the Sirens (dodgy websites?), women who turn men into pigs (Yahoo boss?), and one eyed giants with a lot of sheep (Apple?). And when he gets back, he's going to have to terminate the contractors at Redmond and a lot of the staff. When he gets there he'll find product development being carried out all day and then cancelled at night.
Homeric parallels. Perhaps cancelling Meego was bashing Astyanyx's brains out. But, on this reading, Jolla is eventually going to grow into a mighty empire, return, and Microsoft will end up as their slaves and entertainers. Best not to push it too far.
Before the event? Plenty of people wont have seen it coming. After the event everyone will have and always did. Human nature.
Though you have to admit, many around here have been expecting something like this ever since Nokia (Elop) mothballed their in-house software development efforts, and some even before that.
Now paid analysts, I'm sure all of them will have always known this would come, starting today.
Didn't he arrive as part of a deal that saw Nokia get a cool billion from m$
Up to a point, Lord Copper ...
Elop got the job at Nokia and then helped to make that deal with his old bosses in Redmond. That may always have been part of the plan, but the deal was made after Elop got the job.
Of course, a Gigabuck was cheap for access to Nokia's patent portfolio. Forcing Nokia to use MS's phone OS was just adding injury to insult.
"Nokia hired Elop, there is no possible way Nokia could be forced to hire someone they didn't want."
Elop *was* forced on Nokia, if rumours are to be believed. The chairman of the board, wunderkind Jorma Ollila, had already picked another candidate, but at the last minute, a team of American investors started throwing their weight around, insisting that a non-European be picked. Be that as it may, the biggest shareholder value destruction in history followed, with Elop presiding.
http://www.electronista.com/articles/11/01/26/nokia.may.have.picked.elop.as.ceo.under.pressure/
The big question is, will Elop preside over an even bigger value destruction as the next CEO of Microsoft?
" Jun 20, 2013 ... Acquisition talks between Microsoft and Nokia recently broke down with no plans to revive them." - www.informationweek.com/ mobility/ smart-phones/ microsoft-doesnt-buy-nokia-good-news/ 240157016
And now the deal is done less than 2 months later... I guess Lenovo's talks with Nokia spooked them into it.
Anyone who, unlike Elop, has actually clue about enterprise technologies, MSFT's core business.
Elop is largely a consumer-oriented beancounter, with little to show on his resume (sans sinking Nokia's value by half in less than a couple of day period by opening his dumb mouth a year early, wasting at least 2 years of revenues.)
Actually, Elop has quite an impressive resume - Pre Nokia jobs:
Elop was a director of consulting for Lotus Development Corporation - Went from #1 to aquistion by IBM.
CIO for Boston Chicken in 1992, which filed for Chapter 11 bankruptcy in 1998.
In the same year, he joined Macromedia where he held several senior positions, including CEO from January 2005 for three months before their acquisition by Adobe Systems.
Then president of worldwide field operations at Adobe, tendering his resignation in June 2006 and leaving in December.
After that he was the COO of Juniper Networks for exactly one year from January 2007-2008.
From January 2008 to September 2010, Elop worked for Microsoft as the head of the Business Division, responsible for the Microsoft Office and Microsoft Dynamics line of products, and as a member of the company's senior leadership team. It was during this time that Microsoft's Business Division released Office 2010, with ribbons being implemented throughout Microsoft Office.
So, every company where he's worked longer than a year has either ended up bankrupt or swallowed by another company, with the exception of Microsoft, where he oversaw the end to end implementation of the Ribbon into Office.
Now that he's back at Microsoft, the question is, will he be there longer than a year this time, and if so, just how badly Microsoft will fare this time.
...as more and more companies (Lenovo, LG, Sony etc) will see it as the first shot of the Big Mobile Market Consolidation War of 2013-2014...
...I can totally see a Lenovo-led takeover attempt of RIM, backed up by plenty of Thinkpad-like security insurances & safety switched (FWIW I would love to see a Sony one but I see little chance for that.)
No hardware manufacturer will buy RIM for the hardware when they're already making their own (and in most cases better). What everyone wants from RIM is the patent portfolio and to some extent software.
On this basis, while the odds have gone down, Microsoft are still probably in the running. I'd agree Lenovo are favourites though - it sounds like they lost Nokia, but are probably still in the market.
But it doesn't make up for MS just sitting on win phone 8. So how is hardware being in-house going to change that? It is the OS team that need 5b worth of electric cattle prodding sticks poked at them.
I just wonder where Nokia would be if they had released that latest phone with an Android model alongside the wp8 one.
Probably still a long way down from where they'd be had they continued to polish Symbian and develop Meego to migrate to (smoothly).
I'm not going to say I already own my last Nokia phone, because I might buy a spare N8 (or E7) or even get an N808. (This should help the affordability).
"Given that most stock exchanges have rules against insider dealling, and given that Elop still owned a massive slug of M$, what are the chances this deal will get investigated? maybe blocked?"
Well that kind of depends on whether Elop used his inside knowledge of the impending deal to trade in shares of either company to his advantage - you know - the actual definition of insider trading?
I mean, seriously, if you are going to accuse somebody of something at least take to trouble to go and find out what it is you are accusing them of!
Insider trading is NOT when one company buys another and some of the people involved in making the deal happen own shares in both entities, insider trading is buying or selling shares based on inside knowledge not available in the public domain.
"So, it must've come as a complete shock - SHOCK, I TELL YOU! that Flop didn't know what the chair-tossing gorilla was up to?"
OH MY GOD!
Of COURSE Elop knew what was going on you bloody idiot he's the fucking CEO of Nokia - however it's only insider trading if he's bought or sold shares based on that knowledge. US and Finnish authorities will check for suspicious trading activity as a matter of course with a deal this size; but the OP claiming that it's insider trading because Elop owns shares in MS is showing about as much understanding of insider trading as you're showing ability in reading comprehension.
"So it would only be insider trading if he HAD bought shares in the company he was sent to destroy"
It would only be insider trading if he'd made trades (buy or sell) in either company's (MS or Nokia) shares based on his insider (not available in the public domain) knowledge.
It's obviously not insider trading.
However it does come over as sending in your own person to destroy the value of a company so you can buy it cheap.
Presumably in Finland, either this is a legitimate business practice, or the authorities will be taking a good look at the situation.
This does not show commitment. It shows desperation.
If I jump out of a burning plane with a parachute, it is through desperation to stay alive, not through a new-found commitment to parachutes.
People forget that is not Microsoft's first ownership of a phone biz. In Feb 2008 they bought Danger for $500M. That gave MS the Kin phone which they strangled a few minutes after birth. Kin does however live on in the new MS fascination with tile UIs.
Buying up Nokia is no more a commitment tpo making phones than buying Danger was. If Nokia phones go tits-up that still leaves MS with a healthy bunch of patents to roll into their real only real and profitable mobile cash cow: extortion of licensing fees from Android
"There, fixed it for you. They're just waiting for the price to come down a bit more"
Stupid comment and an attempt to shift ground. MS haven't bought the patents - a very important difference that you cannot recover from by attempting to convince that they're just waiting for the price to come down. Why would Nokia sell them for less or only to MS. If you think MS are holding out for a reduced price then they've a funny way of doing that by giving Nokia a billion or so for use of them right now and several billion overall.
Here's a car analogy - you have a car that I want. I'd like to induce you to sell it. I attempt to convince you to offload it by (a) giving you lots of money so you have less need to sell it and (b) paying you lots and lots of money to be allowed to use it even though you still own it.
Stupid argument made because the initial post was an error and you're trying to disguise that.
I'm sure that in there is that in the event that the counterparty (Nokia) fails, Microsoft gets the IP outright. Just in case. Industry standard terms and all that. They did that with Sendo. Shocker: Sendo failed, and they got the IP. So how is Microsoft going to kill Nokia and get the patents by default?
This part is easy: Microsoft secretly owns Nokia. Nokia's chairman would have never hired Elop at all - he wanted an internal Finn, but he was told by the US shareholders he would be fired and his pick replaced if he did not comply. These controlling investors padded his pocket for a little while longer. In this game even the once-mighty $100B Nokia is a little fish.
After the deal is closed the remaining NSN Nokia will just find that their opportunities are closed. Forever. For no reason whatsoever. And they will fail and the patents will revert to Microsoft in the bankruptcy. And that unforseeable outcome will just be a complete coincidence. The owners who signed the devil's deal will of course long since divested, and maybe recoup with some short options.
Let us see if Microsoft can make anything in the mobile space. So far it has unimpressed. I was a loyal follower of Nokia phones (They just worked, really really well) until 2 years ago. But I jumped and will probably not go back. I'm expecting tight integration now between a Microsoft phone and a Microsoft desktop, which, given Microsoft Windows 8, would seem to spell doom. Sad really. I was always impressed by Nokia hardware, software, not so much, less now too :-)
El Reg, as generous as they are, don't give enough space in these comments to convey the fullness of the beauty of this evolution. To appreciate it requires a tranquil heart, full awareness of what has gone before, the ability to translate that past and these actions as inevitably into a conclusion as the night follows the day.
I'll not post more spoilers here. If you know me I've ruined the show already.
from the joint company statement .. “This element provides Microsoft with the opportunity to extend its service offerings to a far wider group around the world while allowing Nokia's mobile phones to serve as an on-ramp to Windows Phone,”
More likely Windows Phone will be Nokia's off-ramp from the mobile phone business
I mean, back then every sane person said that Elop would be the end of Nokia.
It won't do much for Microsoft's success, in fact having their own phones means that other manufacturers are less likely to also choose Windows Phone. Plus since Microsoft will be looking of a way to get rid of feature phones eating into the Windows Phone market, they will try to get rid of that, too.
The only thing which might be useful for Microsoft in the short run are Nokia's patents.
I would not call it stupid. In the crisis, Nokia had two options:
(1) Try building better (-selling) phones. That is risky, who knows if the company still has what it takes to beat the market.
(2) Sell the valuable brand name and IP.
Option (2) is much less risky, especially if a large corporate sponsor already shows that he is willing to pay good money for the brand and IP. The deciding shareholders clearly chose the less risky path and decided that the value is in the brand and IP, not in some innate ability of the company to create and sell great products. I expect that MS will squeeze the last drop of value out of the brand name and IP portfolio, it won't look nice but it's SOP.
well, option (1) building a better phone had been in development for more than 5 years. Nokia engineering had developed shedloads of drivers and IP against texus instruments OMAP chipsets, they owned QT, they had a theme that scaled desktop apps down to a small screen size very well. It was linux kernel based and it did already exist. All they had to do was stop elop from only allowing them to sell it to the wrong markets, then calling it a failure and tossing all that R&D in the bin. The N900 before it was well received http://en.wikipedia.org/wiki/Nokia_N900 though possibly a little late but they were on the right track could have sold android along side it as another option, and had a certain amount of compatibility and shared development investment between both OS as they used a linux kernel.
So much quality work wasted to either devalue the company for microsoft and to sell win phone OS when nobody else would. This whole thing would have been like watching a train crash for the nokia engineers who understood what it could have been.
By the time it came outthe N900 was steamrollered by the iHype inspired "Touch only" units and a technology not really useabel on a tablet pc (resistive has wear and tear problems, does not allow stuff like "Gorilla" glas).
Only the last 2-3 years have seen a limited revival (Note-series) of pen based phones. And those use the far superior inductive technology that allows a sturdy glass cover with little to no wear.
Add limited software and a choice of language that was a lot less common the the pseudo-Java in the Androids as well as a more limited tool chain compared to the Eclipse plugins for Android.
Surprising that MS paid so much. If they had waited it would have been cheaper.
Not the end of Nokia, but only of the phones. MS will mess this up as well as the last phone maker they bought.
Or ...
Maybe not if Elop is the next MS CEO now that Balmar has resigned.
Or maybe that would kill MS.
I suspect there was a hidden Dutch auction going on. (Or at least in effect).
They didn't want to let someone else get the benefits of their failure make Windows on Nokia a success. (And scrap NoWin while they are at it.)
For Microsoft the whole deal wasn't NoWin, it was Win-WIn.
Possible outcomes:
1. Nokia make a success of the Window Mobile - obviously they'd be happy with that one.
2. Nokia lose most of their Symbian Market to Android, but pick up a little at the expense of the other WinPho manufacturers. A huge win for Microsoft, they get android royalties, where previously they would have none, and their friends at the NSA would be happy that a couple of operating systems not made by a company bound by the patriot act are no more.
3. They get Nokia's phone business cheap.
I can't see any bad outcome for Microsoft, unless they made a mistake with the legality of the situation.
So they moved from one (two) Burning Platforms to another (WinPho8) which has torched the company value and led them to this.
The investors that have stuck by Nokia will no doubt be big funds that will be waiting to cash in their chips for a profit. Now they'll be looking to cut their losses and take whatever Redmond offers - OR they'll reject it, kick Elop out and turn the ship in a different direction.
Maybe Carl Icahn could step in and help rescue Nokia??????
I give them two years tops, and they'll all need a "Jolla".
>none are the future i.e. attractive to kids.
XBOX? There might be some potential for kids here, if it's integrated into Winpho phones and tablets. The kid wants something that can stream gampeplay from the XBONE, and mummy and daddy believed him when he said it runs Office 'for my schoolwork'.
This is interesting "EUR 1.65 billion to license Nokia’s patents," and (from the press release) "Nokia will retain its patent portfolio and will grant Microsoft a 10-year license to its patents at the time of the closing. Microsoft will grant Nokia reciprocal rights to use Microsoft patents in its HERE services. In addition, Nokia will grant Microsoft an option to extend this mutual patent agreement in perpetuity."
MSFT is not buying the patents, just the right to use them (one assumes) without further charge for 10 years. Nokia will still get income from the same patents if used by another manufacturer. This is interesting to me as I would assume the bulk of Nokia's value is now within its patent portfolio, and not its phone design business.
Also as Nokia will remain in some form the branding of the phones leaves someone in Redmond with a headache. Nokia is a good brand in the mobile arena, Windows not so much. Two Nokias will be confusing, so the name may not be used. How will handsets be branded? Lumina (very weak brand)? Windows? (almost toxic brand in the mobile market)?
I'm a little puzzled about the business that will be left behind - and wonder if that will eventually be assimilated (embrace, extend, extinguish) too.
Nokia bought out Siemens from Nokia Siemens Networks, NSN.
Phones are not the only thing Nokia does.
They don't make paper, wellie boots, Satellite TV gear or TVs any more though. Probably they wish they had kept the paper (lots of trees in Finland) and Wellies (lots of fashion wellies now).
Nokia is a good brand in the mobile arena...
...but only in the rest of the world
It means virtually nothing in the US, which is the only market which seems to matter to Ballmer & Elop. MS could quite conceivably drop the Nokia name on phones quite quickly. This would be a very bad move for the 'rest of the world' market.
That which Jorma (Olilla) created, Elop stole*".
Sad day for Finland. Sold the Crown Jewel for a pocketful of promises.
Older subscribers/hacks will understand my friends reaction: "Seems JPZR was right after all!"
*OK, vie--> vieda: take, steal, purloin, made away with....
Been a bad week for end users of MS products, imo. Firstly we lose Ballmer (everything from XP onwards came out under his tenure), secondly he's replaced by a Value Act representative (and it's probably the reason he left) who will be continuously pushing MS toward immediate returns over good long-term strategy. And now we find that WP will be tied to a single hardware provider. Well it isn't, but with MS having their own line its a strong disincentive to other OEMs to compete using WP. They'll just stick with Android (or Tizen).
I was enjoying liking MS for the first time in years. Now it looks like I'm being forcibly returned to the old days.
Nice to see the conspiracy theorists are as unbalanced as usual.
Does anyone really believe that Microsoft thought Windows Phone was so shit, that they poured millions in to developing it, put Elop into Nokia in order to peddle an OS that they knew would bring down the value of the company, just so they could buy said failing company, therefore taking on all the risk, and make it to do more of the same that caused it to lose all it's value in the first place?
This is akin to sending someone to shoot a bull only to pay them billions for the carcass so you can watch it decompose. It just doesn't make sense, even Ballmer isn't that far gone.
Having said that, I think Microsoft buying Nokia is a big mistake. I wouldn't be surprised if HTC and Samsung ditch their WinPhos in fairly short order, and good luck getting any other manufacturers to make WinPhos if they're going to be competing directly against Microsoft.
Shame really as I was seriously considering a WinPho for my next phone, you'll be hard pressed to find better hardware in a phone than the Lumias and the OS seems to do everything I want from a phone.
When Elop wrote his burning platforms memo, people here started speculating about MS buying Nokia on the cheap, the conspiracy theory made so much sense the Elop even denied being a Trojan horse in public.
So, if it actually wasn't a conspiracy that means the average Register commentard is more insightful than Ballmer.
Yep, no wonder he is leaving.
> This is akin to sending someone to shoot a bull only to pay them billions for the carcass so you can watch it decompose. It just doesn't make sense, even Ballmer isn't that far gone.
It makes perfect sense if your competitors really wanted the bull.
This is a win / win for Microsoft; either Windows phone is successful in it's own right, or they buy the burning wreckage of Nokia and use their patent portfolio to skim license fees off everyone else's phone business.
Why? MS has money and Nokia doesn't. Nokia have just received a boost of several billions. Nokia already weren't making the OS themselves so they're not being replaced by MS employees. This ought to be a good thing for Nokia employee prospects.
You're just mindlessly associating this with corporate take-overs by companies that either want to sell off constituent parts or compete in the same space as the purchased company. Neither of those are MS's motivation here.
Money or not, in a take over you don't keep employees who are literally redundant just because you feel it's morally right to keep them employed twiddling their thumbs. I can't see those 32,000 being that important to operations. All that's left of Nokia now anyway is hardware manufacture and that can be outsourced to China.
"Money or not, in a take over you don't keep employees who are literally redundant just because you feel it's morally right to keep them employed twiddling their thumbs. I can't see those 32,000 being that important to operations. All that's left of Nokia now anyway is hardware manufacture and that can be outsourced to China."
Firstly, the 32,000 figure is made-up. It's just what someone reeled off to make their point. Secondly, I don't think you know at all how this has broken down. "All that is left is the hardware manufacture"? That's a big part of what MS have bought - their smartphones division. The software was already written by MS with a small number of very busy people doing some low-level firmware and another bunch writing apps. Neither are being made redundant or should be.
Now if Nokia's division was purchased by Google, they'd have a problem because Google is actually a competitor in the fields Nokia operates in. But MS are not. You're confusing things with takeovers where a company buys out a competitor or a corporate raider who wants to break a company up to sell off the valuable bits. MS are buying the smartphone division because they don't have their own and they want one. Very different.
"You're just mindlessly associating this with corporate take-overs by companies that either want to sell off constituent parts or compete in the same space as the purchased company. Neither of those are MS's motivation here."
Errr. Tell me, do you really think MS wants to be in the the cut-throat low margin business of selling dumbphones and Asha feature phones to people who cannot afford the WP smartphones, and supporting the massive design, manufacturing and logistics infrastructure that is required for these and other devices?
Expect a lot of asset stripping, sooner rather than later.
This was the only likely scenario once Elop tied Nokia to the MS mast and cut away the lifeboats. It was always going to be we sail together and we sink together.
In many ways Nokia has fulfilled their side of the bargain by generating some hardware which is as good as any phone out there. What has held them back is the OS, which despite having some good features is always lagging behind the iphone and android, and seems incapable of introducing the needed changes at the rate required in a consumer device.
In a perfect world, Nokia would take over responsibility of the MS mobile division and it would be left alone to force the changes that the engineers of Nokia know are required. However what is more likely is that Microsoft will smother the innovative culture in Nokia to make it more like itself, so that we will get a company more concerned about how Office runs on the phone than offering the best consumer experience. I also can't wait to see how the trolls of Helsinki react to their first stack ranking session.
What is confusing about this is the timing. Is this Ballmer's last hurrah or Elop's last desperate grab for power. If your CEO had just announced he would be leaving so would not be taking long term responsibility for such a decision, as a board wouldn't you say Whoa, maybe we will get the next guy in to look at this? Lets face it with Baller's acquisition track record it may be more profitable to take the billions of dollars, pile it the middle of Oulu and set fire to it....
It wasn't so much the OS, which when running on a phone isn't bad... it's just not great, is ugly as sin (my opinion) and has a few too many annoying lacking features that other phone os users take for granted. Some things it does quite well.
However it was more the pathetic attempt at marketing. Both Apple and Samsung sell the "experience" (Apple are better at this IMHO). Nokia adverts, on the other hand, are "here's Microsoft Windows Phone", as in selling the Operating System. However the Operating System and company behind it arguably have a reputation of irritating the crap out of everybody that comes near them.
Agreed... I was thinking about the transfer to Nokia of the crippling stack ranking that MS (as in the top execs) love, that kills all business efficiency, innovation and real competence in favour of perpetual brown nosing and continual political bitch fighting within departments and teams. Even ten years ago it was an industry in joke that Microsoft would create a team of 200 to develop a competing product that was developed by 5 people in another organisation.
"Does anyone really believe that Microsoft thought Windows Phone was so shit, that they poured millions in to developing it, put Elop into Nokia in order to peddle an OS that they knew would bring down the value of the company"
No. It was a win-win strategy. If Nokia - WinPhones succeeded MS wins. If they don't Microsoft get Nokia at a knock down price and wins.
I got my thinking cap on.
Now, Finland has a reputation for strange competitions. For example, Mud Football, 'phone throwing, Wife-carrying, International Air Guitar to list but a few.
How about a turd-polishing competition?
Unfortunately, the Americans are waaay ahead of this, with their €5.4 billion attempt to put a nice new sheen on Nokia....
- Bring full range of MS assets to Winphone and properly integrate (Outlook, office, skydrive, Xbox etc)
- Make app store free for developers for the next 2 years (important to define the period to give certainty)
- Make available free / v low cost developer tools that make it easy to port code from Android / iOS
- Partner programme where they pay key developers for apps on winphone
- Bribe, sorry, incentivise key networks to carry winphones
Will cost a few $bn, but they have the cash and just spunked $5bn on Nokia so they can't pull back now!
-Elop is probably being returned to the fold so he can be speed groomed for Ballmer's chair over the next 12 months
-This is probably the best deal Nokia's shareholders can get based on Nokia's CURRENT situation (Chunk of cash, bailed out of the failing phone side and retaining other parts of the business)
-Google must be absolutely fuming (Software missteps aside, Nokia have always been regarded as the #1 phone hardware manufacturer, and with their shenanigans MS have picked them up for half the price Google paid for Motorola?)
Nokia now have a stack of cash, and have finally disposed of what remains of the large and unwieldy NMP structure that was holding them back, and if I read the details right, will be able to start selling phones again in just a few short years, or perhaps they've already got another sector in mind.
And for whoever inherits Ballmer's broken chair, this must surely be MSFTs last chance to crack the moibile market, so they'd better have some kick ass strategy or a plan B.
I for one, look forward to Nokia do next.
I would suppose they have agreed to not making any phones in the future. As for only licensing Nokia’s patents I suppose that just makes the transaction look a bit better. In a way I hope this is good news for NSN. As for Jorma Ollila I think he is being overrated a lot, I am sure he needed help navigating the Symbian menus.
Nokia bet the farm on Windows Phone not because it made any rational sense but because Microsoft presented them with a large hat full of money.
From that point on their fortunes were tied to the OS and as it's become clear, those fortunes have been pretty lousy. So now they're being sold on a platter to Microsoft who are clearly more interested in the patents and the company that they're attached to.
I wouldn't be surprised if this prompts yet another massive patent battle. It might also spell doom for Windows Phone since I doubt it will encourage other manufactures like HTC, LG and Samsung who have their toe dipped in the market to compete with Nokia who were already the preferred partner.
"This deal allows Nokia to buy up a startup company and start producing Linux based phones again. They are free from the Microsoft shackles."
Dead end there. A novelty niche market perhaps, selling a few hundred a year to obsessed Linux fans, nothing more. Operators wouldn't touch them, so no market.
Nokia would be far better off bringing Nokian back into the fold and go back to making tyres.
That's revenues - not profits. Given that it was profitable on 28 billion euro in 2010 I'd guess we're talking annual losses of $5Billion now.
MS wanted the longterm patenting agreements with Qualcomm - I guess they know they wont make any money out of selling phones but hope to easily get their money back by screwing little android producers and harassing the bigger ones in the US courts.
Or they could have just lost it completely and are clutching at any straw to make it look like they are in the game still.
"So, how much would this have cost M$ before Elop ran them into the ground?"
Nokia were in dire straits before their initial partnership with MS. You think they just accepted MS's massive cash injection and conditions for the lulz? Nokia have actually recovered somewhat under Elop with growing phone sales. Your timelines are all out of whack.
"Elop killed any potential for long term independant growth. Completely gutted R&D"
Nokia had barely any money before the cash injection by MS. They had to sell of their own head quarters! And you think Elop is responsible for shutting down some thriving R&D division? Facts are against you.
And an Appeal to Authority argument has never been as flawed as just now, when you use opinions of posters on these forums as your authority! You may have noticed just the teensiest bit of bias around these parts.
Then again, you may not. ;)
Just because we're baised doesn't mean we were wrong. Nokia's biggest hope of selling high end smart phones at the moment is the 1020. The research needed to make that possible started what was it, six or seven years ago and first saw the light of day in the 808. It has the wow factor needed to shift expensive products in a competitive market place. Where is the next big innovation going to come from? You can't compete at the top end of the market without it and Nokia just don't have it any more and that's where most of the money is made. The slow pace of development for Windows 8 phones in general doesn't bode well.
BTW were did all those patients that Microsoft just licenced just come from?
Nokia were basically without a phone they could sell for over a year after Elop told the world our phones are crap, don't buy them and then took his sweet time in getting the new improved models out (I know it takes a while to develop a new range but why didn't he wait till he crossed that bridge before he burned it?). They could have started selling tin cans and string and their figures would have gotten a dead cat bounce.
I have this suspicion that somehow Microsoft got the news about the N9 (from people at Intel? Some Symbian jealous VP at Nokia?), which was the new future for Nokia. Without Nokia burning their Symbian base and dismantling the MeeGo efforts, where would be Microsoft? Samsung just releasing windows phones for the sake of not being bullied by Redmond, HTC idem ibidem...so, here we are now. But you know what? If even with Elop at the reigns of Nokia, Microsoft its not capable of releasing new updates with the "wow" factor of windows phone, its not buying Nokia they will do it. Developers know how Microsoft drops support for their own technologies very easily and often. A pint of Jollia bartender!
If a bunch of ex-Nokia peeps jump ship and start a company building Android (or some other OS; but it absolutely must have an emulator capable of running either Android or iPhone apps, and I know which one is easier) mobiles specifically not for sale in the USA (this is not difficult in practice, as they just have to make them GSM-only and therefore incompatible with US networks) then they won't need to pay bogus royalties to Microsoft for patents which don't apply outside the USA.
The new startup probably won't ever reclaim the crown Nokia once held, when that tune was the most-recognised piece of music on the planet; but with some of Nokia's expertise on board, a decent OS (and therefore, app collection) and immunity from extortion, they could still do well.
If Nokia wanted to blow Microsoft a final raspberry, there's also still time for them to turn over all of their remaining IP to the Public Domain while the ink is drying.
Surely, this means Elop is going to be the new MS CEO?
Because what I can see happening is any sane CEO going "right, let's ditch all the loss making businesses. Now."
Making an acquisition like this during a CEO-transition phase makes zero business sense... unless you already have your new CEO ready, and the direction for the next five years pre-agreed and mapped out.
My question is whether the MS shareholders will like this deal. And if they don't, are there enough of them upset about it to actually do anything about it?
"There's nothing left of Nokia after what they have bought however. Stripped assets, throw the remains on the tip. They've still got what they wanted."
Stop talking about what you know nothing about. Nokia has a market cap of 19bn and MS have just bought a division of Nokia for 5bn. Unless you think that MS some how pulled off the sale of the century or that the remaining 14bn in market value is just stupendously inflated stock (Nokia - inflated, yeah right!), then you're of necessity wrong. Nokia have telecoms networks, routing equipment, services, store chains (just not in the USA) and has a number of subsidiaries.
You do not know what you're talking about, so stop, read, instead of chasing recommends on websites.
A market cap that has dropped from $40bn in the last 2 years (and was over $200bn back in 2000) and yes what does the remainder represent without Devices and Services? A division that includes all the feature phones.
Yes, MS have got a sale of the century. They have a mobile brand, access to patents and manufacturing business for next to nothing relatively. What remains (some $12bn if you like, if you're talking US$ when quoting $19bn, so $19bn - $7bn for the purchase, not 5) is perhaps the true value, or maybe inflated. I think the latter still a little, but anyway. We'll see what the market thinks of the company when it has no mobile phone business, smart or otherwise.
When you think of Nokia in the future when it comes to other than mobile phones, who are they? Little more than a mom & pop outfit dabbling in this and that with no special qualities.
Blah blah blah....trojan horse.....blah blah blah....told you so.....blah blah blah.....<insert Ballmer-related insult here, something to do with bald, chair throwing, etc>....blah blah blah....
Although it will earn me a massive wave of downvotes, the sad truth is that Nokia was steadily heading for Shit-City before Microsoft came along. Despite the overweening and somewhat cultish fondness a vocal minority of people seem to have around Symbian, it was a dying platform that needed the plug pulled. The last Nokia phones with it on were crap.
Anyone who didn't see the Microsoft acquisition of Nokia looming from the outset is dangerously naive, and I have a bridge I'd like to sell you.
the actual numbers IIRC are more like 1% of the malware market is aimed at WP (same as iOS also on 1%), Older Nokia phones get around 19% of the malware pie with unfortunately the Android Phone diorama attracting in the high 70+%'s - BEWARE!
last time I updated my WP it took until 2 am!!!! discover/download/install/wait-restart/rebuild-about seven times in a row (M$ kept promising that each new d/l contained all previous WP d/l's but it sure didn't seem that way)
Still, WP phones have almost the correct security/performance/price point at present - but they must be more heavily attacked than iOS based as how there isn't the market penetration of Apple?... maybe you have better figures?
I love my N9
To this day it's a brilliant, feature complete smartphone.
Elop killed it. His MSFT masters did not want a superb linux based smartphone completing with their WinPho offerings. Side by side, there's no comparison. And Elop killed it without having a WP handset for some time.
So while Nokia had problems they were 1000 times worse after Elop had his way.
And look, he's welcomed back to Redmond. They'll have a 'mission accomplished' banner above the door.
Sorry no. This is not true.
(Posting ANON for a reason.)
The battle was lost because of a lack of apps when competing with "We've got an App for that' which is available across the platforms sold, not just the phone.
The problem with the older Nokia phones was that they never understood how the rest of the world organized their data and the apps were a pain in the ass to deal with.
Microsoft tossed a shit load of money at them so they couldn't refuse.
Had Nokia been able to turn things around... maybe. But they couldn't.
One thing for certain... you're going to see changes in Nokia.
Does that mean we'll get HERE maps and associated services on non-Windows Phone platforms? While HERE's places of interest and traffic info can be a bit spotty, the fully offline navigation abilities still leave the competition in the dust. I still get quarterly map updates for my old Nokia N8 maps and the entire country fits into about 104MB.
"Does that mean we'll get HERE maps and associated services on non-Windows Phone platforms?"
Potentially. But keep in mind that Google compete with that with their own maps so they'll do everything they can to keep it off Android. And as we've seen, they can play quite dirty when they want.
Still, it's quite possible that Nokia will release a HERE maps app for Android. If only for the lulz in seeing Google contorting to stop them. ;)
Apple have invested quite a bit in their own mapping system, but there's no reason they can't licence some of the HERE data / technology. It's clearly better than their own and one of their main motivations was not to be dependent on their chief competitor (Google) for a vital service. Nokia will no longer be a competitor (or far, far, far less so), so I could see that happening. Not saying it would, saying it could.
And then there's Tizen. I see Samsung making a big push with Tizen in the next few years. It would make excellent sense for them to licence HERE maps.
So in summary: we don't know, but there are reasons why we might see Nokia HERE services on other phones. It's certainly in Nokia's interest, has little downside and MS don't really care that much and can't stop them if they did.
I thought the partnership approach was quite strong, with the software guys doing the software and the hardware guys doing the hardware. I never felt Nokia had the Android option - they would have been just another HTC - so the Windows Phone route was clever. But then Microsoft didn't do their end of the bargain, massively hindering Nokia's turnaround. Still, the partnership could have worked.
Now it looks a lot like Nokia's mobile business is entering the final fuck-up stage. RIP
Okay!
In a perfect world this could turn out to spell great success for Nokia.
They still have their patents. MSFT is simply taking over the smart-phone divisions. (As far as I've understood it)
Nokia can spend all that money to (re)develop an OS, produce a wonderfully awesome phone. Hardware like a Lumia but without Winpho. Winpho will die since only MSFT will be producing phones using it. In a few years Nokia can smile and wave at Elop - as he leaves his chair as MSFT to "pursue other endeavours".
Presumably the powers that will remain at Nokia aren't daft, and if everyone here at El Reg saw this deal coming years ago, then perhaps they did too.
Enough wishful thinking for one comment. Harsh reality may soon bite again, but not until my fantasy-bubble coat is worn down.
I wonder what happens to the non-Windows Phone parts of Nokia - their lower end phones? Admittedly WP is increasingly moving into the low end, but it still can't replace a £20 phone yet, plus some prefer the traditional phones with long battery life and physical keypads.
I hope Nokia's own online store (which still serves the massive Symbian and S40 userbase) won't be dismantled quite yet...
Will the Nokia branding remain? I hope so - MS would be foolish to drop it.
It will also be interesting to see if Nokia's software (Maps etc) which have been added to the Lumia phones will be made part of the standard WP package, and offered to other manufacturers.
"It's certainly not an easy problem to solve when the two other ecosystem players are so dominant."
There's only one dominant smartphone platform that I'm aware of (there used to be two, but Nokia ditched Symbian a couple of years ago). What's the other one? One dominant with nearly 80% share, and then two or three minor ones. Seriously - I find it funny that Apple always gets counted as "dominant" at 15%, and the line is conveniently always drawn below Apple. Consider that WP's share is comparable to Mac OS's 6% share on PCs, yet people still count Mac OS as one of the two "dominant" platforms. Talking of goalpost moving:
"Surface has flopped."
One million sales is a runaway success for Apple, but several million is a flop for MS? Sorry - whatever you think of the Surface, it isn't a flop. It isn't a runaway success either (just as Apple's releases aren't). Yet more goalpost-moving to favour Apple every time. I don't care about the Surface, but let's not twist the facts inconsistently to suit an agenda.
Unless it's okay for me to go around calling the iphone a flop based on its early sales.
Still, I suppose we should be glad the author isn't labelleling the 100 million selling Windows 8 a flop, as some claimed it was...
X Box is also another example of a good selling product, so it isn't just Windows and Office.
Just so you understand why you are considered a fool...
A) The dumb phone market is dying, period. In the USA - you get get a smart phone for $80... so the only uptake of WP8 in Europe are the bottom end models.
B) In terms of total OS system in use, Android and Apple are now dominate. Apple is a major player, period... Samsung sells more phones, but Apple makes far more money. Also, Samsung makes money off of iPhones.
C) ""Surface has flopped." One million sales is a runaway success for Apple, but several million is a flop for MS? " LOL, you're funny. Over the course of a year - MS has SHIPPED about 1.7 million Surface Pro/RT tablets with losses, and thats before reducing the prices by $150 on the RTs. MS has lost about $2 billion on the Surface when you include the loss of sales and money spent on marketing that DID NOT generate sales. The only people who bought the Surfaces were fan boys, for the most part.
In the time frame that MS sold/shipped 1.7 Million Surface units, Apple sold about 30 million iPads...! Apple sold 3 million iPads in 3 days when the Surface went on sale.... ugh. Surface = fail.
"Unless it's okay for me to go around calling the iphone a flop based on its early sales."
Again, Apple sells more iPhones in a day than Nokia sells Luminas in month. When Apple sold 37million high end iPhones, Only about 7million $1~100 Luminas we sold in 2013... mostly entry level models. In the USA, Lumina 925 is a $100, the 920 a $50 phone... meanwhile the Samsung, HTC and iPhones remain as $200+ phones. That makes the WP platform not as good as it sounds.
Xbox360 did very well... the XBone is another story already. People will buy it... but many more of us will be buying the PS4.
That's the same cash which can't be repatriated back to the US without a MASSIVE U.S. tax liability.
C'mon you labor/labour-voting lefties, let's hear it "tax avoidance!, tax avoidance!".
C'mon Peggy Hodge, make yourself look even more stupid that after your Vodafone comments!
I love how everybody seems to think that this is one big conspiracy rather than a company that made a number of miss-steps despite once being a leader in the market being eaten by a partner.
Nokia are just Palm all over again, it's not like this story is without precedent.
Choppers coming to take away the nutters (hopefully).
`It cannot be said that Nokia‘s decision to sell its handset unit to Microsoft is a surprise. But what definitely are surprises are the timing and the price'
http://www.forbes.com/sites/terokuittinen/2013/09/02/nokia-sells-handset-business-to-microsoft-at-a-shockingly-low-price/
How much did Nokia pay for Navteq?
;-)
That's Nokia HERE today.
If you don't think Map Technology is important... then you haven't been paying attention to Apple. ;-)
When your CEO has to publicly apologize for poor quality maps... Kinda a big thing.
Posted ANON for some good reasons. ;-)
Maybe you're right.
The Nokia BoD's bet on Elop and the wonderous WP, where they literally bet the farm on it, has failed and they are cutting their losses and ditching Elop and the burning wreckage that remains in his aftermath.
Nokia has wisely kept ownership of patents, done cross licensing deals with MS, kept their valuable trade name, kept NSN and the valuable maps division, etc. etc. In fact, to me this deal looks like the board firing Elop and telling him to take the shit pile he created from what was once a glorious global force in mobile phones with him back to MS from whence he came.
I could be wrong, but this is not quite the outcome I expected, and it might actually save Nokia as a corporation and give it some breathing space to regroup and refocus on new opportunities.
It is sad none the less, as a lot of engineers in Nokia were fired during Elop's mad WP binge - some of them my friends. And it is without doubt somewhat sad to see Nokia's mobile phones division be consumed by a company legendary for destroying everything they touch.
I cannot see an upside in this deal for MS, I think the two clowns might have made some serious miscalculations. I don't expect anything not smartphone related to be in MS's hands within 18 months, MS is not going to get into the low end business, it's too hard and the MS "bully boy" business model will not really work there. Also, the network operators hate Ballmer with a passion, and MS just as much. Does he really think he can buy their good graces by buying Nokia? This can only end bad for MS.
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