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Official: Microsoft To Acquire Nokia Devices and Services Business
Many submitted, and symbolset emailed me to wake up, sending this bit of interesting news out of Redmond: "Microsoft Corporation and Nokia Corporation today announced that the Boards of Directors for both companies have decided to enter into a transaction whereby Microsoft will purchase substantially all of Nokia's Devices & Services business, license Nokia's patents, and license and use Nokia's mapping services. Under the terms of the agreement, Microsoft will 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 total transaction price of EUR 5.44 billion in cash. Microsoft will draw upon its overseas cash resources to fund the transaction. The transaction is expected to close in the first quarter of 2014, subject to approval by Nokia's shareholders, regulatory approvals and other closing conditions."
And, yep, Elop is part of the deal (quoting Ballmer): "Stephen Elop will be coming back to Microsoft, and he will lead an expanded Devices team, which includes all of our current Devices and Studios work and most of the teams coming over from Nokia, reporting to me."
So Elop left Microsoft to head up Nokia, where he made supposedly very idiotic changes that had the effect of destroying Nokia's share price. Microsoft then buys Nokia at a fraction of the cost it would otherwise have been, and Elop returns to a prestigious role at Microsoft, where he's in with a shot at the CEO role.
That doesn't look the slightest bit dodgy at all.
Bogtha Bogtha Bogtha
Suddenly, the big money is being earned from hardware (a reversal of the PC industry, where hardware companies slugged it out for razor thin margins and software makers raked in billions). Both Google and Microsoft recently purchased established phone hardware manufacturers. While many hypothesized that they did it to compete with Apple, I think they did it to combat the threat from companies like Samsung, LG and HTC. If you look at Apple's sales figures, the reason is crystal clear: the iPhone is both their highest margin and most profitable product. There is no point in Google and Microsoft doing all the hard work to build and maintain a mobile operating system only to have companies like Samsung walk away with tens of billions of dollars in profit from premium handset sales each quarter. Google, Apple and Microsoft want to dominate the flagship handset market with a handful of must-have devices each year, forcing Korean and Taiwanese companies into the low end.
Microsoft has been paying Nokia $1B/year. As part of a much larger organization, it will be much easier to hide how much money Microsoft is dumping into Windows Phone, including support for marketing and selling handsets below cost.
Nokia handsets, meet XBox!
The real "Libtards" are the Libertarians!
How I read the open letter:
"Nokia has an identity spanning 150 years of heritage, innovation, excellence, and change. That ends today. By this evening those 150 years will be a rumor. They never happened. Think about that. Today is history. Today will be remembered. Years from now, the young will ask with wonder about this day. Today is history, and you are part of it..."
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
Do you find it peculiar the Elop never sold his house in Redmond and his family didn't move to Finland though Stephen said hey would ? Can you avoid thinking of a conspiracy ?
Its not that anyone didn't see this coming, both inside and outside Nokia. I wrote at that time that clearly Elop was doing the same thing Belluzo did to SGI, all the time working for Microsoft's benefit, not the shareholders of Nokia. And that the reason he would go along and do so is that he was promised to be Ballmer's heir when he returned after Microsoft purchased Nokia cheaply. But where are the Finnish authorities in all this? They should arrest that thug for securities fraud if nothing else, and run him out of the country.
MeeGo was another WebOS: late, buggy, and basically going nowhere with the organization they had and the cannon ball of Intel shackled to their leg.
Nokia would have made a glorious last stand with it, open source geeks would support them (never mind an occasional grumble about the bugs, wanton platform changes, and closed components, what's this between friends), but in the end it wouldn't bring bread to the table without substantial cultural changes and a lot of development. Yes, I'm familiar with The Legend of Spectacular N9 Sales.
My exception safety is -fno-exceptions.
Yeah, everybody could see it coming, but it doesn't make sense from the POV of Microsoft shareholders.
Nokia Mobile built its success on two things: excellent relationships with its channels, the telcos; and a superb market segmentation model. (Its designs were robust, reliable, and well-liked by their users, but conservative; and its manufacturing division ... did tolerably well, considering the tens of models and hundreds of variants. Not brilliantly, but tolerably; perhaps less so in the year before Elop was brought on board.)
Nokia's value resided in these two things: channel relationships, and a deep understanding of all market segments: a willingness and ability to make phones for every demographic and national market, and sell them via the established channels. Those were Nokia's core competencies, the places it created value, the things it did better than its competitors. Not manufacturing. Not design innovation. Marketing, market research, selling a large range, nearly everywhere. (The one geographical market in which Nokia didn't have good telco relationships was the USA. So it didn't sell many phones, except to the discriminating.)
That was before Elop and the "only Winpho, only North America, Apple me-too" strategy. Elop has admitted to channel resistance to selling Windows Phone, and he has pruned Nokia's tree of products down to a stump, pretty much. He's ignored (at best) nearly all markets outside North America.
Nokia's value is gone. Sacrificed to the belief that Nokia could out-innovate companies which excel at that.
Microsoft's buying Nokia in the hope of obtaining massively successful product innovation is ... misguided? Optimistic? An interesting idea? Unlikely to be in the shareholders' best interests? What the hell is a suitable euphemism for "deranged lunacy"?
Perhaps he will replace Ballmer. He does appear to have the desired 'consumers should just shut the fsck up and buy what we tell them to' attitude to consumer relations and seems as adept at handling employees and morale to make the shift in leadership seamless.
Somehow I suspect the problem at Microsoft is the board. They aquired the stock while liking the mindset of the management and having kept Ballmer for so long they obviously want that. They'll keep running it the same way, all the way into the eventual crash into the ground.
This ^^ Like you, am I the only one that remembers the Nokia Basket Case before Elop came aboard? Their phones were crap, all 300 of them in the catalogue, the N9 couldn't be bought anywhere it was supposedly available, networks were no longer foisting them on unsuspecting members of the public ("You can't afford an iPhone so here's the Next Best Thing!" *hands them a shitty Nokia 500*). Sheesh. I'm Glad no more phones will bear the Nokia name - I never forgave them from killing off the last good cellphone in the Nokia 6310i and for creating the Abomination N95 and every other Symbian/S60 POS. Nokia were the architects of their own demise, not Elop. Their arrogance and rank incompetence caused their downfall. I would cite the article where old or former Nokia employees berate the culture and organisation of the old company but can't find them. They appeared around the time Elop wrote his "Burning Platforms" memo.
Smokey, this is not 'Nam, this is bowling. There are rules.
Bollocks to it.
We just can't let this happen, it's almost a full blown disaster, the one ray of sunshine is the patent deal.
We need to find a way to buy Nokia out before this deal goes through.
Seriously?!
Microsoft gets a free pass for all the damage they did and gets a licence to all the Nokia patents that they know they cannot survive in mobile without?
For the price of the Nokia-Siemens buyout?
So Nokia shareholders are to sell their entire mobile business to the scumbags that ruined it for just enough money to own the rump end of their own business free and clear?
Screw that.
I'll offer the Nokia board $7.5B for 51% of the whole company, less any long term investors that want to assign their proxies to me, and I'll re-organize the whole company, turf out all the losers that have managed the company into the ground and spank the living crap out of the company that did this to them. The company that deliberately did this to them.
If Microsoft thinks those patents are worth so much, stick 'em under a GPL-like licence that lets anybody play in mobile so long as they share and tell Microsoft and Apple to go screw themselves.
I posted the following on Groklaw the day it died, in the desperate hope of getting some reasoned help. I was too late.
Looks like I might be too late again.
Stuff that for a game of soldiers, Slashdot might be full of loonies and Trolls but there are still some sane voices hidden amongst the noise.
Have at it.
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I've been working up to posting this for weeks.
I don't really want to post it now but I may never get another chance.
I'm not ready so the link will be to nowhere till at least tomorrow.
Apologies in advance for any offence but I won't take the chance that I miss the opportunity to reach members of the Groklaw community that I may never be in contact with again.
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I'm hoping you guys will be able to help me out.
I've been silently standing on the sidelines here almost since the very beginning. I, like you, feel very deeply that what we have been watching happen here is an outrage.
Watching monopolies desperately trying to destroy the open-source world like a bunch of petulant toddlers makes me want to bang my fists and smash things with rage. (Yes I do see the irony there.)
I have, for a long time, felt powerless to do anything about it but I have come to a decision to make a stand.
The real problem is that we lack the sort of wealth and influence that the corporate elite possess. We are forced to contend with them on a battlefield of their choosing with little or no resources.
I think it is about time we stopped putting up with that and started fighting fire with fire.
If we want to win this war we need to acquire more money and influence than our opponents and, ludicrous as that idea seems on the surface, I don't think it's something that is beyond the realm of possibility.
You see the thing is that the businesses that we face here are either monopolists or practising outmoded models, they are desperately trying to hang on to a way of doing business that has been out-evolved. They look on the surface like the 800lb Gorillas but in reality they are more like Giant Pandas. They are tottering on the edge of extinction because they are too myopic to realize that their ecological niche has gone or that they are in the process of destroying it with their own stupid greed.
So here's what I plan to do and what I think I can achieve given a bit of help.
I plan to buy Nokia.
I think Nokia could easily be re-organized into a vastly profitable enterprise and its enormous collection of patents could be used to beat the snot out of the trolls and proprietary monopolists. I think a licensing scheme similar to the GPL could be created that forced everyone in the mobile space to 'share and share alike' and to compete on merit rather than in litigation.
I want to create something that is inherently, by
Trust The Computer, The Computer is your friend.
Indeed, that is exactly what I said would happen at the time, too... that he made a deal to return and be Ballmer's successor once he was done doing to Nokia what Belluzo did to SGI. The similarities are strong too; remember, Microsoft then needed Belluzo to take down a unix workstation vendor to help establish market presense for it's own crappy new proprietary workstation OS that nobody would want then either; it was called NT. Thugs rarely change their MO, unless or until they are finally imprisoned for it.
"Only Samsung and Apple make money from phones."
You missed the two mainland Chinese companies. Too lazy to Google for them right now but that would be two of the following: Lenovo, Huawei or ZTE. LG is probably still porfitable until they get steamrolled by yet another rising Chinese company.
I agree Nokia was already toast.
I think Microsoft is making their best possible move, given the situation. The future is mobile. There will always be servers, and there will always be desktops and laptops, but their share of the world market is diminishing. Phones are the future of computing, if Microsoft isn't a major player in that market in ten years they will be declining. They are a huge company with billions in the bank and billions in profit, they won't fall quickly. But if 90% of home users do most of their gaming on a tablet and most of their computing with a phone that uses MHL to plug into a monitor and bluetooth to connect the keyboard and mouse, then Microsoft will start to see its fortunes fade.
The advantage with Android is that it's open source. Amazon has their own flavor of Android. Vendors in China have their own flavors of it too. If Windows Phone is ever killed, Microsoft could put out an Android core, compatible with Android apps, but with Bing for search and Nokia's Navteq for maps. Instead of having multiple competing mobile operating systems, you have one dominant mobile operating system with multiple competing proprietary layers on top.
If Google's flavor of Android just becomes dominant, then I agree too that it's a serious problem. I think Google's behavior has shown that they're fundamentally no different from other big tech companies. They're open precisely until they get a dominant market position, and then they're closed in order to slam the door against the next set of innovators. Hence Google Plus has no open third party API - Google wants to suck users into their social network, not make it easier for Facebook (or the next Facebook, whatever that is) to suck users out.
Do you have another explanation?
From what I can see they sent in Elop to use Nokia to make WinPhone popular and if that failed were prepared to buy Nokia to keep it selling WinPhone.
Actually the Android game is very very tight on margin.
Samsung makes money only because the basically build the entire supply chain from essentially raw materials. HTC is loosing money badly. LG I don't know. Motorola well they are now google so those books will be cooked.
I love Android it's just a game that Nokia would never have been able to profit. I thought they should have gone with Android myself back a few years ago. But clearly that was a bad idea in hind sight.
Nokia was caught with their pants down. The worst thing was they didn't even know it for 3 more years. By then they lost the market they owned. They simply could not grasp touch screens. The N95 was a phone that should have opened the eyes at Nokia. Here was a popular device that did pretty much every thing. It had a huge screen for the day. Did it really have a successor. Did they try to innovate after it? Nope. They just rehashed the same format a few more times.
The next device needed to be touch. And it needed to be good. They didn't even try. They put out what was it 4 rev's of the same format? Then they basically collapsed, living off the life support of a HUGE cash balance. Which is now long gone.
In the end the only option was sell to MS.
The CEO has a fiduciary duty to his company and its shareholders. Elop pretty obviously violated that duty by acting in the best interests of MS, not Nokia. It seems to me that there would be strong grounds for a Nokia shareholder lawsuit against Elop personally, and possibly against MS as well. Discovery proceedings could be quite interesting – civil attorneys can demand just about any relevant documents, emails, and so forth. Unless everything was done verbally with no record, there ought to be some evidence of Elop's malfeasance.
Beautiful. Simple. Brilliant. Out of place and hardly on time. Timeless. The Nokia N9 is a story with no happy ending but you want to enjoy every word. Sad story. Post-coital kind of sad.
And that’s not because the Nokia N9 let us down. On the contrary, we found it to be a revelation: gorgeous design and the divine simplicity of the all-screen experience.
If anyone is let down, it's the Nokia N9 itself. The platform is as good as doomed. Forsaken by its own creator. With Nokia giving up on MeeGo and a price tag that confines the N9 to a premium niche, it will be next to impossible for the OS to grow a substantial user base. Without users, developers won’t be too interested in MeeGo either. And the limited number of apps is the platform's biggest weakness.
Google a few other reviews and they will all be along those lines. I didn't buy it because it was dead on arrival, I bet a lot of others did the same. And it's a shame because it could have been a great platform, especially because it was a fairly standard Linux system below the hood.