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Which Fading Smartphone Company Is More Valuable To Microsoft, RIM Or Nokia?
colinneagle writes "Nokia and RIM, the two former leaders in the early smartphone market, are now basically at the end stage of their downward spirals. This is an opportunity for Microsoft, which wants to make some inroads in the smartphone market, assuming Microsoft it can play its cards right. The question is which firm is worth more. Both have their values, especially in the patent areas. In terms of just smartphones, Microsoft would probably gain more from RIM, because it could integrate BlackBerry Enterprise Server into its own server products. Nokia, though, is a much older player and probably has a lot more of a patent portfolio. The question then becomes which is an easier purchase. Nokia is a 150-year-old storied company. The Finns may not be too keen to let it go to an American firm. There is the distinct possibility Microsoft acquires both firms and keeps the best of both worlds for hardware. But where does that leave OEM partners like LG, HTC and ZTE?"
This is because RIM is 'corporate' orientated, so its a natural for Microsoft. Nokia, is consumer oriented ( Apple's territory )
But, considering all their handset technology is different, would it be wroth the trouble/money just to get the BES, that wont work with a windows phone anyway?
More likely they will both just fade away and someone like Google will grab the patents just before they go under water forever.
---- Booth was a patriot ----
MS already owns Nokia
Just buy both in a two for one sale!
I dont see MS benefiting for buying either. MS has gotten what it needs from its deal with Nokia. If WP doesnt do well under Nokia, RIM isnt going to help.
"But where does that leave OEM partners like LG, HTC and ZTE?"
The same place where every Microsoft partner ends up.
Why buy at all? Not everyone has to be like Apple.
People think this stuff is easy - but Nokia's having issues and it's 150 years old. RIM knew its market too. Why would Microsoft be any different?
Apple makes it look easy, but it isn't. Look at the corpses strewn behind the iPhone, iPod, and iPad and you'll see some of the best companies of the era. And Apple has just started, or so they'd lie you to think.
Thought this already happened. In any case, Tomi Ahonen has a long, detailed, analysis. Too long for me to read, sorry.
Anand Rangarajan anand@cise.ufl.edu
Anything to avoid creating a good product themselves, amiright?
IF windows 8 tanks?
What is this "IF" word? An acronym for Inevitable Future?
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Just as important for microsoft is their positioning versus these other companies, and whether buying one or the other as a defensive play is worth it. What would be the cost to Microsoft if one of these other companies bought RIM or Nokia instead, particularly the effect on their patent portfolios?
Don't you need to look at the age of the patents involved?
Most of RIMs magic came a long time ago, pre-cellphone days.
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I worked for Nokia when the MS alliance was announced. Elop is ex-MS, he brought in some higher management from MS. The company is already drinking the MS kool-aid internally, the takeover is complete in every way except financially. Nokia shareholders would not object to getting the company out of Finland, it's expensive to hire people there and expensive to fire them. Fortunately for MS a whole lot have already been fired.
Obviously Apple should purchase RIM and graft a RIM keyboard onto the next iPhone. It would be revolutionary....in a sick twisted what-if-Frankenstein-and-Nefertiti-had-a-bastard-child kind of way.
The premise of the article is that by purchasing a smartphone company then Microsoft would gain assets that will help them gain traction in smartphones. This is simply not going to work and a waste of shareholder assets. Microsoft is not gaining traction with their own phone because the ideas they have that work (or worked) for them on the desktop are not desired by customers looking at mobile phones - but they treat the phone very similarly to the desktop (who wants to have Office capabilities on their phone? no-one). Despite Microsoft generating enormous profits they can't get enough new ideas out that customers want. Buying an ailing smartphone company that also does have enough new ideas is hardly going to help them get new ideas that would affect their smartphone market penetration to the tune of their investment.
IMHO Microsoft should be looking at shoring up its desktop rather than fighting Android (Linux!) and Apple on phones. That battle is pretty much lost for them. By focussing on phones Microsoft seem a bit distracted from their core area of desktop - which has allowed Windows 8 to garner very unfavourable reviews. Concentrate on what you are good at Microsoft! By obsessing over growth they are starting to lose focus, making the new desktop experience worse, and rather than maintaining their high profits they are at risk of negative growth - especially if developers decide Anrdoid desktop or OS X are worthwhile targets for their desktop products (as well as smartphone apps), since the people will also follow. Windows 8 is a muddle of ideas and less suited to the existing users than Windows 7 (hint: tablets and desktops shouldn't have the same experience, one is for content consumption and the other for content creation and their needs are different - don't lose sight of this!).
Apple is proving neither is relevant outside of their patent portfolios.
Nokia is using Windows because its own software stack is worthless and it has been having trouble producing a credible handset. The Lumia is nice but is not really competitive.
RIM's software stack is notoriously bad - hence the death march to BB 10. Its hardware is woefully not competitive and its business phone moat seems to be evaporating very quickly as Apple is demonstrating that it is taking security and enterprise deployment and provisioning very seriously (the recent security white paper as a case in point) - convincingly enough that Fortune 500 companies are dumping BB in favor of iPhones.
Given that Microsoft is already in bed with Nokia it is likely cheaper and less risky for MS to bankroll Nokia for a while in the hopes that it lifts off the ground than to buy it outright. RIM on the other hand, offers nothing.
I think the other OEMs make WP7 phones to avoid the patent and licensing threats of MS. Also it hedges their bets in case MS puts out a winner or if Google screws them over.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Starting from scratch isn't easier. As evidenced by the HP and Palm story a few days ago. Without a lot of capital up front, Palm had trouble sourcing parts specifically because of Apple. They had hoped HP's big pockets would help, but new CEO Apotheker was not behind it partially because Palm was purchased by the previous CEO.
Well, there's spam egg sausage and spam, that's not got much spam in it.
MS is trying to avoid a future where the move to mobile leaves them behind if they focus only on desktop. The problem for MS is that despite a ten year head start on tablets and phones, they are behind the likes of Apple and Android. Instead of forging a separate effort in mobile, MS has decided to forcibly capture a large number of future mobile developers by pushing them to design for Metro by making Win 8 default to Metro.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Microsoft needs to focus on raising its shareprice right now. If Gates & Balmer didn't own a majority stake, Balmer would be canned already.
The stock price has not moved in a decade and investors are getting impatient. They need to save cash, cut expenses, and invest wisely in what will bring back more capital and liquid assets. An expensive several billion buyout will lower the value of the company and hurts its shareprice more.
I do not see the value?
Worse, the other handset makers like HTC will shit their pants that they are supporting a competitor now and will cut Windows Phone sales and focus solely on Andriod. Ala OS/2 syndrome. All OEMs prefered OS/2 over Windows/DOS but they would be supporting IBM and a competitor if they did so they touted the NT and Windows 9x platform instead.
http://saveie6.com/
Google needs a big patent portfolio to beat down Apple and Microsoft; they should buy both Nokia and RIM. Microsoft has done a great job depressing the Nokia stock price. And if Google buys them, they can really kick Windows 8 Phone down, given that Microsoft has bet on Nokia. Oh, and they can fire Elop too.
why is it that every failing company that gets in the news, a bunch of wacks jump up with hands in the air, saying, "Ooh! Ooh! I know who should buy this outfit!"
answer: NOBODY buys them. they're FAILING. they are CRAP. you are BURNING YOUR MONEY.
patents are cheaper in chapter-7.
if this is supposed to be a new economy, how come they still want my old fashioned money?
What are you talking about? Windows Phones are business phones. Windows 8 will be used by 95% of all businesses, just like Windows 7/XP, etc.
I don't respond to AC's.
RIM is practically a national asset of Canada. In its glory days, it would have been inconceivable to consider selling RIM to a foreign interest -much less an uncouth and arrogant American one. Now that RIM is crippled and tumbling down the stairs of doom, it is no longer inconceivable, but there still would be extensive conditions on the sale, such as retaining so many employees in Waterloo, or having the Canadian government own a big share of the company, etc.
There is virtually no scenario under which MSFT could buy the whole thing outright and do with it whatever they want. Which is exactly what MSFT would want. They don't need or want the handsets or the fab lines or warehouses full of handsets. They want the IP. Canada Inc. is not going to allow that stripmining sale and MSFT knows it, or else they would have bought the place years ago.
The only way for a clean IP sale would be if RIM collapses completely, and the government stays out of it (unlikely; they will probably prop it up and meddle) and the bits and parts go up for public sale to highest bidder. In that case, MSFT can come rolling in with a pile of cash and just outbid everybody -of course everybody else will know that's going on and drive the bids higher. But it could be done. MSFT knows this and they don't want to get caught in the bidding mess.
I expect to be wrong but I just don't see a way for MSFT to do the acquisition they way they theoretically would want to do. Who could? Some sort of white knight Canadian company or a group of companies with cash could buy RIM and that would bypass all the nationalism problems. No idea who that could be or if their investors would scream. Buying RIM is an invitation to lose a lot of money AND the buyer still has to gut the company. Nobody is going to buy RIM and still want to make the products. They have no value and buying the company is not in any way going to change the fact that BlackBerry is dying.
Nokia has similar problems in Finland, but they haven't made a lot or friends lately. The nationalism is probably a lot lower now. The layoffs have been bitter and unpleasant. MSFT might have a better shot at either a joint venture or outright buy . But there is a LOT of Nokia that has nothing to do with the things MSFT wants. What would happen to all those other parts of the company? Does MSFT gobble up the IP and close the doors? It's not going to be easy.
Meanwhile, MSFT is in danger of spending too much time and money on these companies. It will distract them from their key mission and it could be argued that they have enough problems already staying on mission. A botched RIM or Nokia buy could infect MSFT itself similar to how AOL and Time Warner looked good on paper and was a disaster in action. Sprint and Nextel. Compaq and HP. SBC and ATT and all the others that got gobbled up by the "new" ATT.
Sometimes the sum of parts is a negative number.
Sig for hire.
Android is simply too lasses faire and requires too much learning for your non-geek and simply doesn't "work" yet.
Citation needed. My wife seems to be able to operate her Android without any trouble. Why is being laissez-faire a problem? And what particulary "doesn't work"? Market share is a hard thing to measure, but by at least some metrics, Android is outcompeting iOS fairly substatially.
Just because you're paranoid doesn't mean there isn't an invisible demon about to eat your face
The majority of smartphone owners would disagree...
Android works for Joe Random just like Windows. He has no idea what the system can do, but has some friend that knows how to set it up, and then, he is perfectly capable of using it. By the way, it is funny that you acuse Android of being lasser faire, as that was the single characteristic that made Windows win.
Rethinking email
Nokia is still on the lead in emerging markets where people primarily want to be able to communicate(SMS and phone calls). They profit by volume and not by margin (the majority of the smartphone world).
Its death would be ignoring that value from developing companies, particularly when we are beginning to see an influx of low cost Android smartphones, debatably started by Huawei with its Ideos.
There's fortune at the bottom of the pyramid
I really am not talking about emerging markets -- the E-series devices have been corporate workhorses outside of the USA for a long, long time, and they do a lot more than RIM ever did.
I want to play Free Market with a drowning Libertarian.