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Why Intel Should Buy Nokia

An opinion piece at ZDNet makes the case that Intel is the best match for struggling handset-maker Nokia, arguing that Intel needs help breaking into the smartphone market and Nokia isn't tied as tightly to Qualcomm/ARM hardware as other vendors. From the article: "Another factor in favor of a union is Nokia and Intel's shared history — albeit not the most successful — of working together in mobile, thanks to their collaboration on the Linux-based MeeGo mobile OS. What's more, Intel has a long relationship with Microsoft, handy given the impending release of Windows Phone 8 and Nokia's new-found commitment to Microsoft's platform. The fact that Intel is currently using Android, as seen with Orange's San Diego smartphone, isn't much of a hindrance; Intel has already said it hasn't written off the idea of using Windows Phone 8 in future, and due to the x86 architecture, Android phones that use Intel's Atom processor won't even run all of the apps on Google Play, suggesting the relationship between Android and Intel isn't all it could be."

19 of 200 comments (clear)

  1. No. by obarthelemy · · Score: 4, Insightful

    Nokia is wedded to MS. Intel needs to be more flexible than that, especially since WinPhone is in freefall, and Nokia isn't even trying at tablets.

    Dell or HP should buy Nokia, it's their last chance to make it in the mobile space.

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    1. Re:No. by Telvin_3d · · Score: 5, Insightful

      Never happen. Nokia's market cap is hovering just under 10B. Dell's is 20B and HP's 35B. So for Dell to buy Nokia they would have to hand over HALF of their entire company to Nokia's current investors. HP is not in a much better ratio. Never, in a million years, could that happen.

      Frankly, there are not many companies big enough to buy Nokia, particularly in the tech sector. Microsoft would be one. Google another and Apple would be about it. Apple would be buying them for the patents and the other two if they plan to go into first party manufacturing and design in a big way.

      Assuming Nokia doesn't pull out of the death spiral the most likely outcome is that no one buys them outright. A big consortium of companies buys all the patents just to get them off the table and the rest of the company dies.

    2. Re:No. by rtfa-troll · · Score: 5, Interesting

      Your analysis seems pretty right but you've missed that breaking up Nokia can finance quite a bit of the cost of a bid.

      As ever; Tommi Ahonen has about the best analysis about this. Beside the three you have named there are companies like LG or ZTE which could get quite a bit out of the "dumbphone" divisions. With Nokia's current strategy, where it's smart phones are barely selling outside Finland and the US, Nokia can't really get future value out of that division. Almost any company that can deliver Android, however, could use the dumbphone distribution network to get its self into the best position in most of the new upcoming smartphone markets.

      One of the key things seems to me that a live buy of Nokia has to happen extremely soon so that Nokia still retains some experties outside the Windows phones and it looks like Steven Elop is trying to make that as difficult as possible.

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    3. Re:No. by rtfa-troll · · Score: 4, Interesting

      [..] Nokia is most likely tied to microsoft contractually with significant fines on breakage, making for a nice poison pill for any microsoft's competitor [..]

      Tommi Ahonen's argument is that these contracts are clearly actions of an agent of Microsoft and so those contracts could be invalidated. I'm not well exactly that would work, but it's definitely true that Microsoft has always been very arrogant in such matters just expecting to get away with things. There are quite a few things in Microsoft's operations which look very clever, but are actually very risky. People like Sendo and Lindows have managed to get a fair bit of money out of them.

      One of the main things, for example, is that Microsoft always involves lawyers in any discussion of contract negotiations. This looks clever since it means that all such discussions are in theory "undiscoverable" and so not usable in courst. However, it also opens up Microsoft's lawyers to conspiracy in things such as destruction of evidence. If a sufficiently aggressive and clever attacker manages to threaten the MS lawyers with something which looks like jail time they will sing like Nightingales.

      Probably someone who was willing to persue a really aggressive litigation strategy against Microsoft could get most of the cost of the Nokia purchase out of them in a legal settlement, free themselves of all sorts of legal restrain and get a very excellent deal on patent liability protection.

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    4. Re:No. by rtfa-troll · · Score: 3, Interesting

      He was actually there when Nokia made all the decisions that got them in the mess they were even before

      Bullshit. Ahonen left Nokia in 2001 which, coincidentally is about the last time that Nokia was showing excellent iPhone like marketing prototypes. The iPhone came out in 2007. The person you are looking for is the person who was CEO during the time the iPhone was developed and up until the point that Elop was installed.

      Apart from that; Ahonen's speciality is the mobile phone market, not technical side, so you can expect him to see what is wrong with that side more than the technical side of the company; his emphasis on "channel, channel, channel" misses the bad effect that insisting on delivering many models with slight variations had, but at the same time it's completely reasonable for an established player. Apple had to work incredibly hard to get around Nokia's channel dominance and the fact that Symbian was still selling many more phones than the iPhone until Elop's brainfart / memo just shows how right that strategy was.

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  2. Re:powered by Maemo by moderators_are_w*nke · · Score: 3, Informative

    Maemo / Meego is dead at Nokia. They all either got sacked or quit and formed Jolla mobile.

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  3. Why Intel should buy RIM and Qt by MtHuurne · · Score: 3, Interesting

    Since we're speculating wildly, what about this scenario: Intel buying RIM and Qt. Nokia isn't using Qt anymore for new development and is looking for a buyer. RIM is switching to Qt and Intel has Qt experience from MeeGo. RIM is looking for a niche market rather than compete head-on with iOS and Android (see the recent interview with the CEO), so an Intel-owned RIM would be less of a direct competitor to Apple and Android manufacturers, which would increase the chances of them adopting Intel CPU's in the future. After all, getting into the mobile market would not be a goal in itself, just a way to sell more CPU's.

  4. Finding a buyer for Nokia by symbolset · · Score: 3, Insightful

    Nobody is going to buy Nokia. Intel isn't a good fit. They're trimming the company down to where it can fit in a filing cabinet managed by a couple paralegals.

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  5. Re:There comes a time to make that final trip... by Anonymous Coward · · Score: 5, Insightful

    Nokia culture inside Nokia is practically dead. Nokia's old culture was based on Finnish post-war determination, risk taking and fundamental honesty. There were values such as respect for the individual which represented the understanding that each employee had a stake in and responsibility for the company. These values were already under attack long before even Elop joined. "Respect for the individual" had been changed into just "respect" which is a completely meaningless empty feel good phrase. Elop has brought in Microsoft culture to senior management and run around destroying every area of the business which showed individual initiative.

    With Nokia culture dead there is very little to bring the company back to a sane position. The very idea of working so much with a company as immoral and corrupt as Microsoft would have been rejected by the old Nokia, and that is probably part of the reason why the best pepople have been leaving Nokia so quickly since Elop arrived. The place to look for the true Nokia is inside the companies already spun off years ago and within the groups which have been leaving Nokia in disgust recently.

    For the strength that made Nokia survive before to allow it to continue again, there would have to be a very strong move from the board to completely get rid of the current Microsoft culture. That probably has to happen within six months to have a chance since Elop is putting so many of his own placement into the management. I really don't see that much chance of that being done.

  6. Trolltech QT must survive by EmperorOfCanada · · Score: 4, Interesting

    All I care about is that QT ends up surviving and being independent again. As for Nokia they can rot back in the 90s where they seem to be stuck.

    If Nokia had had half a brain they would have made QT for iPhone and then Android so that people could port their iPhone apps quickly to Android, Windows, Mac, Linux, Window Mobile, and oh yes the Nokia phones. Nokia would have then become the center of the app universe while their own app library would have grown somewhat. I reluctantly learned Objective-C and have little desire to relearn Java so that I can port my iPhone apps to android. So with a C++ code once and tweak a bunch of times portability I would have been very happy.

    My worry is that they will pull the rug on QT and then sell the carcass off to some group one step away from being a patent troll.

    1. Re:Trolltech QT must survive by fnj · · Score: 3, Informative

      Rest easy. Qt is GPL. Nobody can put a GPL'ed project back in the box. Anybody can fork a GPL project.

  7. Re:powered by Maemo by UpnAtom · · Score: 3, Insightful

    Intel dumped MeeGo at the same time they started Tizen with Samsung.

    Jolla are the folks who designed the awesome N9. For merely keeping MeeGo going we should be throwing money at them but I hope they can sort the business end of it too.

  8. Re:Mobile losers club? by Anachragnome · · Score: 3, Informative

    "Why would 3 failures of the mobile market want to get together?"

    Epic fail?

  9. Microsoft Should Buy Nokia by RudyHartmann · · Score: 4, Insightful

    Nokia has been a huge supporter of Windows for mobile phones. Microsoft has tried harder than anybody has without making any progress with their own phones. Remember the "Kin"? If Microsoft intends to continue trying, they'll have to keep Nokia's patent portfolio away from the other mobile phone manufacturers. Microsoft needs to buy Nokia for this very purpose.

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    1. Re:Microsoft Should Buy Nokia by symbolset · · Score: 3, Insightful

      Why buy the cow when the milk is free? They already have everything they want from Nokia.

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  10. Re:beat by Dragon+Bait · · Score: 4, Funny

    I think microsoft should beat the shit of nokia and burn them alive. enough with the crap. getting angry for waiting a decent windows phone available on all countries.

    Waiting for a decent windows phone? Isn't that a little like waiting for the first openly gay, married, catholic Pope?

  11. Cites for power consumption/performance by tlambert · · Score: 3, Informative

    This takes going through a bit of a chain of events, but it's pretty clear that it was Intel's management of the people and the engineering constraints under which they operated, rather than the inability of the engineers themselves not being up to the task:

    StrongARM was sold by DEC to Intel:
    PP3: http://en.wikipedia.org/wiki/StrongARM#History

    Former StrongARM engineers quit Intel for SiByte:
    PP4: http://en.wikipedia.org/wiki/StrongARM#History

    Broadcom acquires SiByte December 2000:
    Row 17: http://en.wikipedia.org/wiki/Broadcom#Acquisitions

    Founder of SiByte leaves Broadcomm to found P.A. Semi:
    PP6: http://en.wikipedia.org/wiki/Daniel_W._Dobberpuhl

    P.A. Semi makes fast, power efficient Power Architecture processors (PWRficient):
    PP1: http://en.wikipedia.org/wiki/P.A._Semi#History

    P.A. Semi acquired by Apple in April 2008:
    PP1: http://en.wikipedia.org/wiki/P.A._Semi#Acquisition_by_Apple

    P.A. Semi team at Apple tasked with creation of fast, power efficient ARM processors:
    PP2: http://en.wikipedia.org/wiki/P.A._Semi#Acquisition_by_Apple ...as I said: before, it's probably be a match made in hell for both companies. Intel demonstrably does not currently have the necessary management skills to deal with the problem of power consumption/performance ratio, and has little incentive to actually chase that market down, since it would cannibalize their high end performance market, given that electrical power costs continue to Enron upward.

    It might be possible for Intel to incorporate a wholly owned subsidiary to try and keep things at arms length, but it's pretty clear that the tablet market and smart phone market are driving adoption of low power consumption/performance ratio processors pretty strongly, and things like the Motorola Atrix and ASUS Transformer are starting to target the desktop market, as well.

    It's only a matter of time before Broadcom documents the GPU in the chip used in the Raspberry Pi, or someone else does something similar, and the desktop stranglehold on GPU accelerated graphics will be blown away to the point that Intel putting under-powered GPUs in their low end chips to avoid caniibalizing the market for their high end chips will completely blow them out of the low end of the market altogether.

    The only reason Intel might be able to make some (short term) inroads into the smart phone market would be carrier subsidy of the handset price. This is something that's not happening in the tablet space, and so they won't get the same foothold there. As the tablet market continues to heat up with a slope much steeper than the smart phone adoption rate of anyone other than the earlier iPhone models, they aren't going to be able to rely on subsidy.

    Intel could perhaps launch a "game changer" by cutting out the cellular service providers entirely, and killing the monthly billing that permits the handset subsidy in the first place (a quick way would be to deploy mesh networking with last-hop access to WiFi to undercut 3G/4G), but that is unlike Intel to be that forward thinking (e.g. you can still boot DOS 1.0 on their most recent processors, and that's limited their technology vector considerably). And doing so would vastly undercut the market for carrier subsidized handsets, which is precisely Nokia's market.

    And then we are back to it being a match made in hell for both companies.

  12. Nokia should buy Nokia by Anonymous Coward · · Score: 5, Insightful

    Seriously, Nokia is a handset maker, they have free choice of everything, processors, software the lot. Their problems began when they tied their own hands behind their backs, hired Elop and restricted themselves to making only Microsoft phones.

    Samsung on the other hand, made Android, Bada, Microsoft, everything under the sun, and found what worked in what markets.

    So I don't see how tying themselves to Intel and using the LESS popular CPU with the not so great power consumption would somehow be a good thing.

    At this point they need to eject Elop, get a pragmatic COMPETENT boss in place, and start making phones that sell instead of phones they already know don't sell.

    Elop is the problem here, not Nokia.

    1. Re:Nokia should buy Nokia by rtfa-troll · · Score: 3, Insightful

      You are right I guess; even now switching back to a "produce everything we can sell" strategy could save Nokia. The problem is that you clearly have to get rid of Elop to achieve this; the primary thing which is killing Nokia is things he has said, so everthing he ever did needs to be completely repudiated. Probably this needs a complete change of the board of directors and that can't be done without a buy out. The real question is: "why are the big shareholder's sleeping on the job?".

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