Nokia acquired by Microsoft(blogs.technet.com)
blogs.technet.com
Nokia acquired by Microsoft
http://blogs.technet.com/b/microsoft_blog/archive/2013/09/02/the-next-chapter-an-open-letter-from-steve-ballmer-and-stephen-elop.aspx
553 comments
There was some credible speculation back then that Google bought up Mototorola because its CEO threatened patent warfare with other Android manufacturers, something Google really did not want happening.
Along similar lines, I speculate that Microsoft snapped up Nokia because they threatened starting an Android line of phones.
I think there's a significant business lesson in here somewhere... Something along the lines off "partner with a giant, then become dangerous to it"
Funnily enough, MS also gets a nice patent bonus along with its purchase as Google did with Motorola. However, I think Nokia's patent portfolio is much, much more powerful than Motorola's. This is for three reasons, two publicly evident and one anecdotal:
1) Apple admitted defeat in its patent fight with Nokia, something it hasn't done with anybody else;
2) Nokia has multiple patent lawsuits ongoing, and none of them involve standards essential patents, the one thing most likely to invoke the ire of the antitrust gods;
3) A previous boss of mine knew the head of Nokia R&D in America, and he regaled me with stories of smartphone apps they had working in their labs way back in 2006 that made me go "how the hell do they do that?" Unfortunately, any two-bit app developer can do those things today on any modern smartphone platform using publicly documented API. But I am still curious about what goodies they have hidden away in their labs today.
Along similar lines, I speculate that Microsoft snapped up Nokia because they threatened starting an Android line of phones.
I think there's a significant business lesson in here somewhere... Something along the lines off "partner with a giant, then become dangerous to it"
Funnily enough, MS also gets a nice patent bonus along with its purchase as Google did with Motorola. However, I think Nokia's patent portfolio is much, much more powerful than Motorola's. This is for three reasons, two publicly evident and one anecdotal:
1) Apple admitted defeat in its patent fight with Nokia, something it hasn't done with anybody else;
2) Nokia has multiple patent lawsuits ongoing, and none of them involve standards essential patents, the one thing most likely to invoke the ire of the antitrust gods;
3) A previous boss of mine knew the head of Nokia R&D in America, and he regaled me with stories of smartphone apps they had working in their labs way back in 2006 that made me go "how the hell do they do that?" Unfortunately, any two-bit app developer can do those things today on any modern smartphone platform using publicly documented API. But I am still curious about what goodies they have hidden away in their labs today.
One thing which I haven't seen anyone mention yet. Nokia, like Skype, was a non-US company, which means Microsoft could use cash which is trapped in Europe.
So you have to take the purchase price and discount it by as much as the US Corporate tax rate (which Microsoft would have to pay if the money was going to be repatriated back to the States, as would be needed if that cash was going to be used to pay dividends or to purchase a company based in the US).
So you have to take the purchase price and discount it by as much as the US Corporate tax rate (which Microsoft would have to pay if the money was going to be repatriated back to the States, as would be needed if that cash was going to be used to pay dividends or to purchase a company based in the US).
Here's my take. Nokia's downfall has literally been the biggest business failure in the history of the planet - see communities-dominate.blogs.com for backstory. (As I mentioned in a previous post; I'm largely summarizing things Tomi proves with hard data.)
My interpretation of this is that the increasingly untenable position of Stephen Elop began to incriminate the whole board, as any toppling of Elop would invite all sorts of questions as to why he wasn't booted yonks ago. The only way that Microsoft had of avoiding another black eye for Windows was to buy Nokia to appease investors (seriously, how many black eyes can one platform get? Is it a potato?)
Consider: Had the headline read, "Microsoft deal destroys World's Leading Manufacturer of Mobile" (which incidentally is the actual, ink-on-paper market position held by Nokia circa Elop's hire, shows Tomi) and it could have destabilized the larger Windows ecosystem too.
If this claim seems histrionic, recall that the ENTIRE PC INDUSTRY is like a tenth the size of mobile. Yes, I love my PC too, but most consumers seem much happier with other devices for a wide range of use cases. Therefore, getting Windows on those devices mattered. Windows Phone mattered. Windows RT mattered. Intel is on its back leg, and ARM is about to make its final assault on the server closet, where Windows Server is melting away faster than ice on a VAX.
And yet I don't think people realize exactly how vulnerable Microsoft is. The one good thing Ballmer did is notice. Way too late, though. It seems strange to me that there are others who are even less clueful than Ballmer. If your business depends in ANY WAY on Microsoft -- and it probably does -- plan accordingly.
My interpretation of this is that the increasingly untenable position of Stephen Elop began to incriminate the whole board, as any toppling of Elop would invite all sorts of questions as to why he wasn't booted yonks ago. The only way that Microsoft had of avoiding another black eye for Windows was to buy Nokia to appease investors (seriously, how many black eyes can one platform get? Is it a potato?)
Consider: Had the headline read, "Microsoft deal destroys World's Leading Manufacturer of Mobile" (which incidentally is the actual, ink-on-paper market position held by Nokia circa Elop's hire, shows Tomi) and it could have destabilized the larger Windows ecosystem too.
If this claim seems histrionic, recall that the ENTIRE PC INDUSTRY is like a tenth the size of mobile. Yes, I love my PC too, but most consumers seem much happier with other devices for a wide range of use cases. Therefore, getting Windows on those devices mattered. Windows Phone mattered. Windows RT mattered. Intel is on its back leg, and ARM is about to make its final assault on the server closet, where Windows Server is melting away faster than ice on a VAX.
And yet I don't think people realize exactly how vulnerable Microsoft is. The one good thing Ballmer did is notice. Way too late, though. It seems strange to me that there are others who are even less clueful than Ballmer. If your business depends in ANY WAY on Microsoft -- and it probably does -- plan accordingly.
So Elop was in fact a Trojan Horse?
Wonder what this does to the already strained MSFT vendor relationships. You could now almost guarantee vendors will start to completely dump Windows on ARM and possibly even look for alternatives to Windows x86.
Wonder what this does to the already strained MSFT vendor relationships. You could now almost guarantee vendors will start to completely dump Windows on ARM and possibly even look for alternatives to Windows x86.
To me, this is borderline criminal behaviour and shows once more that Microsoft is incapable of playing fair.
Installing a trojan horse as Nokias CEO, who then proceeds to destroy any value left in that company so that Microsoft can pick it up for a cheap price.
I'd be amazed if Elop is promoted to MS's CEO position for such deceitful behaviour
Installing a trojan horse as Nokias CEO, who then proceeds to destroy any value left in that company so that Microsoft can pick it up for a cheap price.
I'd be amazed if Elop is promoted to MS's CEO position for such deceitful behaviour
~$7 Billion for the device & services business and Nokia's patents. Seems like a good price now, but one you wouldn't have ever predicted before 2007 & the launch of the iPhone.
In 2003 Nokia was worth $245 billion[1]
[1] http://techcrunch.com/2010/06/22/the-sad-tale-of-nokias-sink...
In 2003 Nokia was worth $245 billion[1]
[1] http://techcrunch.com/2010/06/22/the-sad-tale-of-nokias-sink...
Well, at least Qt got warp-core ejected before all of this. God only knows what would have happened in this transaction.
MS paid less for Nokia handset business than for Skype.
Oh how the mighty have fallen.
Goodbye to the Nokia brand, soon only to be mentioned in rose-tinted lookbacks. Mobile phones, built like a brick, running for days.
Oh how the mighty have fallen.
Goodbye to the Nokia brand, soon only to be mentioned in rose-tinted lookbacks. Mobile phones, built like a brick, running for days.
So Microsoft just handed the entire Asian manufacturers’ bunch to the Android ecosystem. Not that they’re not already there but it would be hard for any manufacturer now to invest on Windows when they would think that MS is already giving the edge to Nokia.
Also this comes like an acceptance from MS that they can’t penetrate the smartphone market. So they prefer to invest heavily on devices they own. Which is a first in their 30+ years of building software. Could this mean a similar approach in tablets?
The price though is a bargain. It’s significant less than what Google paid to buy Motorola and Nokia is in a pretty much better state than Motorola in many aspects.
Also this comes like an acceptance from MS that they can’t penetrate the smartphone market. So they prefer to invest heavily on devices they own. Which is a first in their 30+ years of building software. Could this mean a similar approach in tablets?
The price though is a bargain. It’s significant less than what Google paid to buy Motorola and Nokia is in a pretty much better state than Motorola in many aspects.
What a tragic end to the sad story of Nokia.
It was a long time coming now, but I'm still gobsmacked.
Looking back it's as if Elop and whoever his puppeteer is did all they could to undermine this company.
Sold to Microsoft for bits. Even Motorola sold for twice as much.
Nokia would have made money from Android. The market is massive and still growing.
There is no bright future with Microsoft. People don't buy or recommend Windows phone, not at a rate that matters they don't.
What a sad day. Farewell, Nokia.
It was a long time coming now, but I'm still gobsmacked.
Looking back it's as if Elop and whoever his puppeteer is did all they could to undermine this company.
Sold to Microsoft for bits. Even Motorola sold for twice as much.
Nokia would have made money from Android. The market is massive and still growing.
There is no bright future with Microsoft. People don't buy or recommend Windows phone, not at a rate that matters they don't.
What a sad day. Farewell, Nokia.
That kills my hopes for a Nokia Android phone.
Also, Elop seems like the least interesting character to succeed Ballmer. What does he bring to the table? What has he done? Guy looks like a careerist.
http://en.wikipedia.org/wiki/Stephen_Elop#Career
Also, Elop seems like the least interesting character to succeed Ballmer. What does he bring to the table? What has he done? Guy looks like a careerist.
http://en.wikipedia.org/wiki/Stephen_Elop#Career
Well, this makes all the speculation about Elop succeeding Ballmer that much more interesting.
The acquisition does NOT include:
- HERE Maps
- Nokia NSN (Nokia Siemens Networks, its "network infrastructure")
- Advanced Technologies (I couldn't find any info on what this means, given the name)The old fat couple in the room had a dance and microsoft just ran out of things to say, so in order to avoid an awkward moment (high end sales are abysmal) he proposed. nokia looked around, didn't want to die alone, and like any scared middle aged woman, said yes.
The combined company makes a lot of sense and will be well-positioned to compete in mobile, blah blah.
I'm sad, because Nokia stood for something: something I generally liked even though I didn't own one. As did Microsoft: something I disliked mildly, but that needed to exist.
Now those two brands can't stand for two separate things any more. The combined company will stand for maximizing shareholder value through leveraging synergies, or something.
Meanwhile, the iPhone has lost most of its personality, and Ubuntu phone isn't shipping (and it'll be a watery product anyway).
Can someone please start a smartphone company to make a phone I care about?
I'm sad, because Nokia stood for something: something I generally liked even though I didn't own one. As did Microsoft: something I disliked mildly, but that needed to exist.
Now those two brands can't stand for two separate things any more. The combined company will stand for maximizing shareholder value through leveraging synergies, or something.
Meanwhile, the iPhone has lost most of its personality, and Ubuntu phone isn't shipping (and it'll be a watery product anyway).
Can someone please start a smartphone company to make a phone I care about?
As a Nokia employee, I can't yet comment on whether this is ultimately good or bad for us and what our dreams were.
I can say that it is a very emotional time for us Nokia employees, and I can only imagine it is even more so for those of us who are also Finns.
I can say that it is a very emotional time for us Nokia employees, and I can only imagine it is even more so for those of us who are also Finns.
Do we imagine Elop tanked Nokia on purpose to cheapen the cost of this acquisition (and shutter the patents under one roof)?
Ballmer trumps his critics. Well done - Sir.
There is a lot of potential to eat from both iPhone and Android cakes. Android needs a beefy h/w, c'mon guys let's admit it. Windows is way faster even on the low-end lumias. Also don't forget MS Office - the sleeping giant on windows phones.
History likes to repeat itself. First Jobs wouldn't licence MacOS, and Billy rode the wave he created. Then google got the second wave. Why? The same reason, he wouldn't license iOS.
From a user perspective iOS is the best, but the new Lumias makes me think of Apollo as no less great. No matter what google does, lumia will eat big from Android's share. But I waiting to see how big a bite it's gonna be on the apple.
In the enterprise world Office on Phones is gonna pay a big role. This is death toll for blackberry, sorry to say that.
C'mon Cook, partner on. Let others make "cheap" apples. License iOS before it's too late.
There is a lot of potential to eat from both iPhone and Android cakes. Android needs a beefy h/w, c'mon guys let's admit it. Windows is way faster even on the low-end lumias. Also don't forget MS Office - the sleeping giant on windows phones.
History likes to repeat itself. First Jobs wouldn't licence MacOS, and Billy rode the wave he created. Then google got the second wave. Why? The same reason, he wouldn't license iOS.
From a user perspective iOS is the best, but the new Lumias makes me think of Apollo as no less great. No matter what google does, lumia will eat big from Android's share. But I waiting to see how big a bite it's gonna be on the apple.
In the enterprise world Office on Phones is gonna pay a big role. This is death toll for blackberry, sorry to say that.
C'mon Cook, partner on. Let others make "cheap" apples. License iOS before it's too late.
<quote>Two turkeys don't make an eagle</quote>
Wow. Some call Tomi.
For copious, copious background on the MS/Nokia debacle, 'burning platform' to present: communities-dominate.blogs.com
(Not affiliated, just an avid fan of this mobile industry analyst-become-blogger who does his own stats. Some of the charts are chilling.)
For copious, copious background on the MS/Nokia debacle, 'burning platform' to present: communities-dominate.blogs.com
(Not affiliated, just an avid fan of this mobile industry analyst-become-blogger who does his own stats. Some of the charts are chilling.)
msft is buying "Nokia’s Devices & Services". nokia does other things as well, for example, nokia-siemens-network (NSN) is a significant player in the EPC (enhanced-packet-core) market as well...
It is a sad day. I have been joking with friends that we should have a funeral in sunnyvale. Probably, though, that would be in poor taste.
On the upside for nokia shareholders, well, when nokia switched to windows phone, it was widely reported that "Microsoft bought Nokia for zero dollars" - now, at least, the Nokia shareholders are getting paid for it.
On the upside for nokia shareholders, well, when nokia switched to windows phone, it was widely reported that "Microsoft bought Nokia for zero dollars" - now, at least, the Nokia shareholders are getting paid for it.
It was expected all along since Elop ditched Meego which was key to Nokia's success. It won't help Microsoft though, but expect a lot of damage from this. Nokia already attacked VP8 codec with their patents. Now Microsoft will use all Nokia's patents to bring patent trolling to new heights.
Microsoft is becoming more and more of an integrated software and hardware company than a purely software one. Maybe it's time to change the name to something without the "soft".
That was more or less expected...
But I think it is really sad too. I really enjoyed the pre-Microsoft Nokia, I had account in their dev forums, and loved their SDKs, community, Sybian, whatnot.
To me, when they suddenly dropped Sybian while they were still ahead AND expanding in some markets (like Brazil, Russia...) and switched to MS, it was really sad, and I felt like they dropped the ball.
Their Lumia phones DO pull some interesting hardware sometimes, but it was never the same.
Now with MS outright buying them, not only the ball is dropped, but kicked way out of the stadium.
But I think it is really sad too. I really enjoyed the pre-Microsoft Nokia, I had account in their dev forums, and loved their SDKs, community, Sybian, whatnot.
To me, when they suddenly dropped Sybian while they were still ahead AND expanding in some markets (like Brazil, Russia...) and switched to MS, it was really sad, and I felt like they dropped the ball.
Their Lumia phones DO pull some interesting hardware sometimes, but it was never the same.
Now with MS outright buying them, not only the ball is dropped, but kicked way out of the stadium.
Seems like it could be a great move, but it raises some questions. Given Microsoft's perspective, they know they need to increase Windows Phone share. The iPhone is on its way to become a niche device, so I doubt they would look to Apple and try to turn Microsoft+Nokia into the one-stop-shop for Windows Phone devices like I've seen speculated in many places. That's too big of a gamble. Instead, I think they'd model after Android, which now has 80% of the market, and continue strong on the OEM route, with Nokia-based devices just acting as a leader. The way I see it, this aligns much better with what's worked historically for Microsoft and what shareholders expect, especially given the Surface blunder. At least I hope so.
The problem is that Samsung, HTC and LG are all focused on Android, and Microsoft needs to change that. Can the Nokia buy help with that? I wonder. What would stop Microsoft from using Nokia's patents aggressively (rather than defensively) to "motivate" the other phone manufacturers to produce, market and license more Windows Phone devices, or face additional lawsuits against their majority-Android lines? Nokia alone didn't have the incentive to push to increase WP share outside their lines before, and Microsoft appears to already have a strong patent portfolio for mobile (source: http://en.wikipedia.org/wiki/Smartphone_wars). If so, this deal could be especially sweet for Microsoft, and also could benefit Nokia too, since it would retain premium WP status when a true third ecosystem develops. Thoughts?
The problem is that Samsung, HTC and LG are all focused on Android, and Microsoft needs to change that. Can the Nokia buy help with that? I wonder. What would stop Microsoft from using Nokia's patents aggressively (rather than defensively) to "motivate" the other phone manufacturers to produce, market and license more Windows Phone devices, or face additional lawsuits against their majority-Android lines? Nokia alone didn't have the incentive to push to increase WP share outside their lines before, and Microsoft appears to already have a strong patent portfolio for mobile (source: http://en.wikipedia.org/wiki/Smartphone_wars). If so, this deal could be especially sweet for Microsoft, and also could benefit Nokia too, since it would retain premium WP status when a true third ecosystem develops. Thoughts?
To everyone speculating about what this means for the possibility of Elop succeeding Ballmer: this means that Elop is succeeding Ballmer. End of story.
edit: I would love to know why this is getting downvoted.
edit2: fair enough.
Two key facts:
1. Microsoft needs a new CEO.
They have a limited pool to choose from. The following are seemingly reasonable candidates:
- Mark Zuckerberg (never going to happen, he wouldn't agree to it)
- Steve Sinofsky (that ship has sailed)
- Tony Bates (seems like a reasonable choice; relative outsider, smart, has a tech background)
- Another member of Steve's SLT (some would be better than others. I think a sizable portion of the company would revolt if KT was chosen).
- Sheryl Sandberg (doubt it, since I think she's gunning for the US Senate)
- Carly Fiorina (MS's board would never agree to it)
- Stephen Elop (reasonably obvious choice: insider, devices experience, has CEO experience, but there's that pesky Nokia thing)
2. Microsoft has a new, relatively large, soon-to-be-on-the-board activist share holder in ValueAct. ValueAct will have a significant amount of authority over yea'ing or nay'ing acquisitions and over who the new CEO will be.
I can't imagine there's any way Elop would agree to working under someone else again. He also seems like a not-unreasonable choice for CEO of Microsoft, outside of the fact that he hasn't exactly made Nokia back into a rip-roaring success, and doesn't represent much of a change from business as usual at Microsoft.
edit: I would love to know why this is getting downvoted.
edit2: fair enough.
Two key facts:
1. Microsoft needs a new CEO.
They have a limited pool to choose from. The following are seemingly reasonable candidates:
- Mark Zuckerberg (never going to happen, he wouldn't agree to it)
- Steve Sinofsky (that ship has sailed)
- Tony Bates (seems like a reasonable choice; relative outsider, smart, has a tech background)
- Another member of Steve's SLT (some would be better than others. I think a sizable portion of the company would revolt if KT was chosen).
- Sheryl Sandberg (doubt it, since I think she's gunning for the US Senate)
- Carly Fiorina (MS's board would never agree to it)
- Stephen Elop (reasonably obvious choice: insider, devices experience, has CEO experience, but there's that pesky Nokia thing)
2. Microsoft has a new, relatively large, soon-to-be-on-the-board activist share holder in ValueAct. ValueAct will have a significant amount of authority over yea'ing or nay'ing acquisitions and over who the new CEO will be.
I can't imagine there's any way Elop would agree to working under someone else again. He also seems like a not-unreasonable choice for CEO of Microsoft, outside of the fact that he hasn't exactly made Nokia back into a rip-roaring success, and doesn't represent much of a change from business as usual at Microsoft.
Nokia Solutions and Networks still makes plenty for money so they aren't dead quite yet. I think this makes sense for Microsoft seeing as how the redesign of Windows phone hasn't made back the money they put into it. It's becoming unprofitable for windows phones to be made so they are ensuring they have hardware.
Among many other things, with this, MS can now compete with Google Maps. Although they already had a partnership with Nokia, having them with a tighter team integration is a different story. I am sure both MS and Google will do drastic innovations with this renewed competition.
Anecdotally, I'm very impressed with some of the new Lumias. I got a 620 to replace my stolen iPhone, and for $200 unlocked its phenomenal phone. The build quality makes a flagship Samsung feel like cheap plastic crap. And Windows Phone flies despite the modest specs. I was disappointed in the 920 I had earlier, but at this price point the shoe is on the other foot.
I hope this is portends a Microsoft phone...