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The Case That Apple Should Buy Nokia
Hugh Pickens writes "Nokia has seen better days. The Finnish phone maker continues to struggle to gain traction in a marketplace dominated by Apple and Android, and its new flagship device, the Windows-powered Lumia 920, failed to impress investors when it was announced last month, subsequently causing the company's stock to dive. Now Tristan Louis argues that there are four good reasons Apple should dig into its deep pockets and buy Nokia. First Nokia has really powerful mapping technology. Apple Maps isn't very good, and Apple has been feeling the heat from a critical tech press but Nokia has been doing maps 'for a long time now, and they a have access to even more data than Google.' Next, Nokia has a treasure chest of patents and as Apple's recent smackdown of Samsung proves, the future of the mobile space 'will be dictated by the availability and ownership of patents.' Nokia's exhaustive portfolio of patents might be worth as much as $6 billion to $10 billion, a drop in the bucket from Apple's $100 billion war chest. Nokia could also help with TV. If Apple truly wants to dominate the TV arena, it'll have to beam shows and movies to iPhones or iPads in real time, and that's a field Nokia has some expertise in. Finally Microsoft has a lot riding on the release of Windows Phone 8, and Nokia is its primary launch partner. Buying Nokia would 'knock Microsoft on its heels,' says Forbes' Upbin."
Besides, isn't Nokia Microsoft's bitch?
Apple: it must look good, work out of the box, and be very simple so that even a hipster in skinny jeans and Ray-Bans can do it.
Nokia: it must be solid as a rock, work for 10,000 years, and the interface must exist. If it is convenient, that is a bonus, but not important.
These companies are opposites. Merging them together will just get us stylized Nokias that lack the legendary bulletproof Nokia quality.
I foresee trouble in that area.
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I know I am being picayune, but 10% is not a drop in the bucket. Not even in the colloquial sense. Unless it is a teeny tiny bucket that only holds 10 drops.
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
Not in the US, and especially not in the EU.
Too many anti-trust issues.
Nokia's patents may be purchasable, but buying the entire company would be a huge investment for Apple, one which would provide hardly any value outside of the patent portfolio - Nokia's products, philosophy, almost everything are completely orthogonal to Apple's. This is a terrible idea.
Microsoft is *already* on it's heels. Apple is worth far more than Microsoft and appears to have a better strategy going forward. Taking any opportunity to knock Microsoft down makes no business sense and distracts from their mission.
Tristan Louis is an Internet veteran, having worked in the Internet industry since 1993. Throughout the years, Mr. Louis has been known as the founder of Internet.com, a co-founder of Earthweb's developer.com, the interim CTO for Boo.com, and has held many other roles at start-ups during the first dotcom boom.
And this guy is commenting on why Apple should buy Nokia? Really? That's "news" to us? It's basically a list of half baked points. I know how this works, I've seen it in my uncle. He used to play sports in high school and when we watch a Vikings game he is just exasperated at how terrible the coaches are. Why, if he was in that game, he'd know exactly what plays to call and he could probably even be the quarterback and throw this football clear over them mountains.
The piece fails to explain why Apple shouldn't merely license Nokia's map services instead of kicking $10 billion out for it (oh, by the way, 10% of your total liquid assets is not a "drop in the bucket"). It fails to analyze many of the other assets of Nokia (oh, come on, like Apple would continue making Nokia's candy bar phones) and just assumes Apple would like to pay for all that stuff. It doesn't consider all the EU approvals that Apple would need and he ends this list with Apple doing "a double-reverse with a flip" which sounds a lot like the plays my uncle would call in a professional football game.
In short, build your own $100 billion dollar empire and then you can throw it away yourself. Until then, I don't think this shallow "analysis" of two phone makers was ever worth my time. It could at least be comprehensive and delve into the financials of the deal and possible repercussions (like yet another little guy dying and the market becoming more inbred with less options).
My work here is dung.
In short, Apple doesn't need Nokia. Nokia has reinvented itself many times since it made shoes and tires, and it's WELL OVERDUE to do that again. The problem is cell phones are effectively all it does, and it's tragically lacking innovation there (FWIW, I worked for Nokia, and made detailed suggestions over ten years ago about more storage, touch screens, and more battery life, and there was repeated immediate dismissal over how impossible it would be). The sad part is Nokia went to Microsoft rather than it's dedicated developers to find that innovation. Microsoft will even help kill Nokia partly because Nokia doesn't seem to know what to do, and mostly because they forgot Balmer doesn't care about Nokia any more than it can work as a stepping stone for Microsoft to "get back on top." Yes, buying Nokia would give Microsoft one less out for Windows, but sadly for Nokia (and to be fair, IMNSHO) Microsoft's overwhelming priority is to do its own work for Windows 8 after getting Nokia to abandoning [small] teams of [highly] devoted Symbian developers as part of the fallout in committing to The Balmer; proof.
Agreed...Apple has absolutely nothing to fear from Microsoft. Microsoft is destroying themselves from the inside. For Apple to buy Nokia, that might cause Microsoft to wake the fuck up and start building their own phones, like Apple does.
If Apple really wants to see Microsoft fail, the best option is to let them continue down the path they are currently on.
I think I agree with the commentor on the Forbes site who put this squarely in the realm of fantasyland. Microsoft has already given Nokia $2 billion and Elop seems committed to Microsoft's camp. Aren't there other Maps providers on the internet that Apple could potentially partner with? Mapquest? Somebody?
Nokia's exhaustive portfolio of patents might be worth as much as $6 billion to $10 billion, a drop in the bucket from Apple's $100 billion war chest.
However, Nokia the company would cost significantly more, perhaps more than Apple would be willing to spend. Currently their assets+equity comes in at about $48 billion and they have an annual revenue of $38 billion. Nokia wouldn't sell their patent portfolio as it'd leave them crippled.
Finally Microsoft has a lot riding on the release of Windows Phone 8, and Nokia is its primary launch partner. Buying Nokia would 'knock Microsoft on its heels,'
If Apple bought Nokia, then Nokia the legal entity would still exist. All their existing contracts would still be valid. So they'd be contractually be obliged to continue with the Windows 8 launch. Further in the future you could block new deals sure, but that wouldn't help at all with the current competition.
I'd rather have microsofts revenue than apples, even if apples is larger. Reason? Apples revenue comes from consumer electronics. That can change overnight if Apple just blows it once with a new release. Microsoft has a huge corporate revenue stream as well as a lot more lock-in from software. To put it another way: microsoft can release vista fiv times over without losing much revenue to e.g. Mac OS. If the iPhone6 is crap and samsung's offering is brilliant then Apple is in trouble. Apple have to deliver continuously, MS not so much.
why-apple-should-buy-nokia-to-fix-their-mapping-disaster
Maps is a disaster. But what about the other iOS6 problems (some here). What about the recent Apple lack of innovation, and the reported lack of staff motivation? As a owner of 2 Macs, 2 iPhones and an iPad, I'm just worrying. During the past year, new devices are mere incremental updates, and nothing revolutionary came from the software dept (OSes and applications). And the general update trend slowed down, compared to 2 years ago. This appears to me as a management problem.
To be fair, Tim Cook has to be vigilant - Apple sells a lot thanks to the nice and innovative ergonomics and design inertia coming from the iPhone 3~4 era. Taking a different direction would definitely mark that new era as the real beginning of the Cook epoch - and at the same time end the Jobs one forever. And who knows what would be the outcome of that.
In my opinion, Tim Cook will keep sticking to the Jobs background for a while - maybe 2 years - while Apple staff will feel more and more the gap between what image Cook wants to show to the world (ie Jobs-like) and the day-to-day internal management. Updates slowness, substantial mistakes and bugs will increase over time, while disheartened (and good) people will leave the company. It will be a hard time for Cook, having to choose between working (hard) to maintain that fading image from the past, or cope with a dramatically different management requirement.
Slashdot, fix the reply notifications... You won't get away with it...
1)Microsoft would almost without question fight any buyout offer for Nokia by Apple tooth and nail and Microsoft has a war chest big enough to buy Nokia themselves. There is no way Apple would be able to buy the company for a reasonable price. Microsoft needs Nokia worse than Apple does right now.
2)Nokia has committed to the Microsoft platform and changing direction at this point would be tremendously costly. In fact it would probably kill the Nokia to try at this point.
3)Nokia does a lot of business with low margin products that are definitely not in Apple's wheelhouse. Apple already makes most of the profit in the cell phone industry. They would have to take on a lot of products in markets that they don't know well that make essentially no profit if they bought Nokia.
4)There would be huge company culture issues. Apple has a very unique company culture and a big acquisition would bring a lot of problems.
5) If Nokia goes under, Apple can probably buy assets it needs without the extra baggage of the rest of a troubled company
6)Apple's problems with their Maps is a fixable problem without involving Nokia. Yeah, they dropped the ball but they have the resources to make it work so long as they don't screw a lot of other things up at the same time.
Let's say Apple buy Nokia for those reasons (Maps, patents and Fuck Microsoft). Apple now has to fire 95% of the company (they only keep the IP lawyers and the mapheads). Nokia has 122,000 employees, many of them in Europe were they cannot be fired easily. That's 116,000 pink slips. A $100000 redundancy payment per person seems about right ("Apple is loaded"). That's about $12 billions. Combine that with Nokia's market cap (about $10bn) and the price rises to $22bn. I guess Apple could technically afford it, but the damage to their image could cost them even more.
Nobox: Only simple products.
Actually HTC is making the "signature" WP8 devices, not Nokia.
If you don't know where you are going, you will wind up somewhere else.
I'd rather have microsofts revenue than apples, even if apples is larger. Reason? Apples revenue comes from consumer electronics. That can change overnight if Apple just blows it once with a new release. Microsoft has a huge corporate revenue stream as well as a lot more lock-in from software. To put it another way: microsoft can release vista fiv times over without losing much revenue to e.g. Mac OS. If the iPhone6 is crap and samsung's offering is brilliant then Apple is in trouble. Apple have to deliver continuously, MS not so much.
Worse, Apple's value is entirely coupled to the close association of a narrow set of consumer hardware to a walled garden set of media. Loss of market in either will start to very quickly erode the other because they, effectively, have all their eggs in one big basket. Microsoft has several *thousand* products. (Half of which, I'd hazard a guess, virtually no one outside of a fairly narrow space has ever even heard of.)
As someone with a fairly large investment in both companies, I think you're absolutely right. Apple is a high yield, high risk stock. Microsoft's stock is rock stable in price specifically because investors know its not going anywhere. Its a long term investment that pays good dividends and is a safe place to put it. Apple's stock is best to day-trade, because it rides 10% swings constantly. Microsoft's value doesn't concern me at all... it'll slowly rise, it'll slowly fall but its too diversified to do either quickly. Apple's a constant game of worry -- hoping it doesn't implode before some particular block of stock in my portfolio ticks over to a long-term cap gain rather than short term, and wondering if its best to take the short term cap gain hit and get out before it implodes.
Consumers, to your point, are fickle. Sony was the Apple of the 90's, and it didn't last. Apple likely won't either... and their "innovation" (or complete lack thereof) since Jobs' death should (and does) significantly worry investors.
Actually HTC is making the "signature" WP8 devices, not Nokia.
You should know better than to bring facts to a Slashdot Microsoft-bashing!
Not really. Apple has a large portfolio of software patents on functional elements of the smart phone and UI, but most of these will eventually be proved worthless because of prior art, obviousness or lack of originality. They also have design patents covering the look and feel, but I suspect most of these will eventually be either invalidated or narrowed to the point where they are worthless.
The core IP that makes a smartphone a smartphone is held by companies such as Motorolla, Bell Labs, Nokia, Eriksson, Samsung and others. Fortunately, as these patents are required for interoperability and standards purposes they must be licensed under FRAND terms, but in the end, these portfolios will prove far more important than the UI, Mobile OS or look and feel patents.
If you aren't part of the solution, then there is good money to be made prolonging the problem
What a crappy post. Nokia would be an extremely poor fit for Apple culturally, technologically, logistically, and managerially. Chalk me up with the other posters who suspect the author of wanting to cash out their Nokia stock.
1. the level of detail isn't as nice
I find it nicer, I think the maps are more readable. The detail is generally there if you zoom in a bit more. Also if you change the map font to "small" the map will show more details on screen.
2. the GIS database appears to have a higher rate of error
I know this is true for some, but I have not found this to be the case in my area. I have been using Apple Maps steadily for navigation since the later betas, and it's been working pretty well for things you actually look for day to day - hotels, restaurants, so on. The Apple Maps turn-by-turn also works really well, even when you are going through areas with zero data access (as long as you load up the instructions before you lose data).
5. satellite data isn't as complete as google maps
Varies by region. Again where I live, Apple's satellite data is more recent.
3. the 3D fly over is a gimmic and not new.
It totally replaces Street View for the only thing I ever used Street View for - to check out the area I plan to visit, and to look at what a storefront looks like. There is enough resolution for that in an area where 3D maps are supported...
Even where 3D data is not present, the terrain deformation alone also makes the 3D mode useful. I can now use Apple Maps for a lot of the things I used to use Google Earth for in trip planning, to see what terrain is like and how steep a road really is. For seeing where you might want to bike around a city it is great.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
You are dead on target here.
The last time Apple collapsed, it was because they were arrogant and hostile towards third party application developers and sought to control every aspect of the software channel. Steve Jobs, the genius who push Apple to its dominant position in the early 80's also, as the control freak he was, laid the foundation for the collapse. They also sought to squash third party peripherals providers by tightly controlling the hardware interfaces and BIOS. You could not expand the RAM or, in most cases, add third party peripherals to a Macintosh. I tried to help a friend with a third party RAM expansion on one of those lunch box shaped Macs with the teeny tiny screen. What an abortion - DIP clips clamped onto address latches, extract one of the very few socketed EPROMS to plug in the daughter board, then secure it with a cable tie and som RTV Silcone to an electrolytic capacitor. Apple Fanboys accepted that all of these limitations were usability features - a built in display, no RAM upgrades, limited hard drive upgrades, a one button mouse, etc. Steve Jobs lost a power struggle with the Apple Board and left Apple shortly before it's market share collapsed. Scully is blamed (much of it deservedly) for the collapse and none of the business model failure stick to Jobs.
Fast forward 20 years - in 2008, Apple dominated the smartphone market with the iPhone. iPhone has a very tightly controlled third party app channel, and "features" no Micro SD card, no Micro USB slot and a non-replaceable battery. Their competitor has all of these things, plus a customizable UI, no limitations of 3rd party in-app content and a wider variety of free (or ad supported) apps. Once again, the company has show arrogance and often anti-competitiveness with third party application and content developers. Now Jobs has left the company again - unavoidable this time, but the company has lost none of its arrogance or hostility to third party innovators for the platform. Lets see who gets blamed for the next collapse.
If you aren't part of the solution, then there is good money to be made prolonging the problem