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Nokia Shifts To Selling Back-End Systems To Mobile Networks

Posted by samzenpus on from the trying-something-different dept.

jfruh writes: With Nokia's handset business now sold off to Microsoft, you might be wondering what the remainder of the company does, exactly. The company is trying to use its expertise at other end of its old business, offering data centers and virtualized infrastructure to wireless networking companies to make their businesses more efficient. Competitors include Ericsson, another mobile phone also-ran.

19 of 40 comments (clear)

  1. News at 11 by Anonymous Coward · · Score: 1

    With Nokia's handset business now sold off to Microsoft, you might be wondering what the remainder of the company does, exactly.

    Why would anyone be wondering that anymore? Network stuff has been Nokia's main business for a long time already.

    Just from Slashdot:
    - Nokia Buys a Chunk of Panasonic
    - Nokia Networks Demonstrates 5G Mobile Speeds Running At 10Gbps Via 73GHz
    - Nokia To Buy Alcatel-Lucent for $16.6 Billion

  2. Also-ran? by stoborrobots · · Score: 4, Insightful

    Ericsson was a key provider of telecomunication equipment long before it was a mobile handset manufacturer - in the same way as Alcatel, Lucent and Nokia long provided back-end hardware. For all of them, handset production was a short-term dalliance in the late 90s and early 2000s, not the entire history of the company...

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    1. Re:Also-ran? by mwvdlee · · Score: 1

      dalliance

      You keep using that word. I do not think it means what you think it means.

      "Short-term dalliances" tend not to nearly bankrupt a company.

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    2. Re:Also-ran? by Anonymous Coward · · Score: 3, Interesting

      No no...

      Much of the hardware that Nokia produced was superior and worked with only it's own handsets and wireless kit perfectly. Here's an example:
      http://en.wikipedia.org/wiki/Enhanced_full_rate

      Licensing and patent issues
      The Enhanced Full Rate incorporate several patents. It uses the patented ACELP technology, which is licensed by the VoiceAge Corporation.
      Enhanced Full Rate was developed by Nokia and the Université de Sherbrooke (Canada).

      Just about everyone else just produced handsets, but couldn't use features that were only found in Nokia handsets.

      Most people didn't care too. But you could certainly tell on older first-generation GSM phones as well as phones that were still being sold in 2004 that only the Nokia phones sounded "better than a landline"

      It wasn't until UMTS came along and gave any better option... which was AGAIN a Nokia thing:
      http://en.wikipedia.org/wiki/Adaptive_Multi-Rate_Wideband

      Just about everything that makes up a mobile phone network is produced by Nokia, Ericsson, or Siemens. Other companies that once existed like Nortel had patents on key parts of GSM, UMTS and 4th generation mobile phone technology but they didn't actually produce the consumer hardware, just the software and the chips they run on.

      People aren't aware that the current place we are in right now with SmartPhones is actually quite unprecedented. Up until the iPhone, companies like Nokia and Ericsson were producing both backend hardware and handsets (often with partnerships) and Nokia was the only one that produced "superior" hardware in it's home country. That's why Nokia handsets were far more popular in Europe. In the US, Motorola's flip-phone was what everyone wanted. And in the US, we had a pile of incompatible technologies and frequencies being used. So it didn't make sense for European handset manufacturers to produce anything other than low-end disposable handsets, because nobody would ever buy a high end handset because the phone carriers would never subsidize one.

      Then LG and Samsung came into the space and started making substandard cell phones, and the rest is Android history. That was before Apple BTW. Because Samsung and LG produced all the "free" handsets, they had super-high warranty return rates.

      That is the primary reason why I will never buy an Android phone, let alone a Samsung or LG phone. Seeing the kind of junk that was passed off then, and is still passed off now (just look at the difference between a domestic Samsung phone and a Korean-market model) just to get people to not buy into the Apple ecosystem just makes me roll my eyes.

      People can not buy into Apple if they don't want to. That's not the point. The point is that there is no distinction between a "free" Android device and a 1000$ Android device, so this makes people think they are equal. That's about as equal as comparing a Kia Rio to a Lexus ES 350. Sure 4 tires and an engine makes it street-legal. That doesn't mean that they perform the same or have the same comforts.

    3. Re:Also-ran? by jbrown.za · · Score: 2

      Spot-on ... Ericsson has revenues of well over $20 Billion USD. I wouldn't call that "also-ran". If you use a mobile phone anywhere in the world it is highly likely that Ericsson equipment is involved in some way on the back end.

    4. Re:Also-ran? by TheRaven64 · · Score: 5, Interesting

      Nokia has also been in the market of selling the infrastructure for mobile networks for a long time. And, unlike the handsets, this is a very profitable place to be. Both Nokia and Ericsson saw the commoditisation of the handset market and Nokia in particular watched their margins evaporate and decided it was time to get out. But because they're now no longer in the public eye, they're perceived as losing. Now their customers are people who make money from the products that they sell, so are willing to pay a reasonable premium because a few minutes of downtime costs far more.

      Of course, when Apple decides to concentrate on the high-margin part of a business, no one claims that they're dying, because they concentrate on a consumer-visible part of the market.

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    5. Re:Also-ran? by RabidReindeer · · Score: 3, Funny

      dalliance

      You keep using that word. I do not think it means what you think it means.

      "Short-term dalliances" tend not to nearly bankrupt a company.

      Oh, I don't know about that. Some marriages have been wrecked by short-term dalliances.

      Ask Tiger Woods.

    6. Re:Also-ran? by Anonymous Coward · · Score: 1

      Nokia (and I suspect other European manufacturers) were locked out of the US market due to Qualcomm's Patents on CDMA. Nokia used a workaround to avoid licensing the patent, but as a result, their phones didn't work as well. They suffered worse battery life, lower call quality, more dropped calls, etc.

      Nokia didn't license Qualcomm's patents because they cost significantly more if you didn't also license their chipsets. Nokia didn't license Qualcomm's chipsets because it required signing a clause stating that they couldn't litigate against other Qualcomm licensees for patent infringement. Nokia invested billions of Euros/ Finnish Markka in R&D to gain those patents. They weren't about to give up on a strong negotiating position elsewhere in the world for a small slice of the North American market.

      Sadly (for Nokia) the GSM revolution never really came to North America, it wasn't until UMTS became more widely adopted Nokia's phones could provide a decent experience in comparison with the Qualcomm chipset devices. At this point, the brand's value was significantly devalued, even though they made some excellent devices, the Networks weren't interested.

      It is not the prevalence of smartphones that has broken the model for Mobile Phones/Networks, it is Android, it is now ridiculously cheap to make a mobile phone, you buy a baseband chipset with the cellular stack almost hard wired, requiring no tweaking. Android speaks to it and provides a "good enough" user experience on a cheap ARM system on a chip. Previously items like this weren't commodity items, so the barrier to entry was high.

    7. Re:Also-ran? by cheesybagel · · Score: 1

      Nokia and Ericsson saw the commoditisation of the handset market and Nokia in particular watched their margins evaporate and decided it was time to get out.

      HAH. Apple bet on that same business and is making a killing. They just couldn't keep up with technology and were their own worst enemy that's all.

  3. You might be wondering...NOT! by Macfox · · Score: 1

    Seriously... This was covered so many time during the MS acquisition.

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  4. Until the non-compete clause runs out by Stormwatch · · Score: 1

    As part of their deal with the devil, aka Microsoft, there's a non-compete clause -- Nokia can't make cell phones until 2016. Rumors are strong -- even thought they have to keep quiet for now -- that Nokia fully intends to come back to the handset business; the N1 tablet and Z Launcher are a solid hint of what's to come.

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    Circumcision is child abuse.
    1. Re:Until the non-compete clause runs out by nojayuk · · Score: 2

      Nokia is making and selling cell phones at the moment. It can't build smartphones (i.e. small computer tablets with a radio stage that can transmit and receive voice calls directly over mobile phone networks via GSM or CDMA) but it's a major player in the featurephone and basic cellphone markets with a lot of decent offerings at bargain prices for those folks who don't need a Cray in their pocket.

  5. Re: Nokia is a post it note in tech history by Stormwatch · · Score: 2

    Nokia didn't miss the smartphone market, they owned it with Symbian, and there was an upgrade path ahead with MeeGo. Their downfall came from the very top -- if it wasn't for M$-plant Stephen Elop and the suicidal move to Windows Phone, there's a good chance Nokia would still be the top handset maker.

    --
    Circumcision is child abuse.
  6. Re: Nokia is a post it note in tech history by lalleglad · · Score: 1

    Agree!

    I am still using my N9 with MeeGo, and I still haven't found a better mobile platform.
    It does have some problems as it hasn't been updated for a long time, many apps are not available and so on, but as a general mobile system, MeeGo is ahead of both iOS and Android.

    To try out something else I have a BQ with Ubuntu, and it is fun just by being very different.
    It works in general as a mobile, but the system is very rough and there aren't almost any apps.

    I do hope Nokia will come back, and if they come out with a MeeGo based system, I will be the first to buy one!

  7. Re: Nokia is a post it note in tech history by Anonymous Coward · · Score: 1

    Their downfall came from the very top -- if it wasn't for M$-plant Stephen Elop and the suicidal move to Windows Phone, there's a good chance Nokia would still be the top handset maker.

    You've got the history wrong there. Nokia's downfall begun years before the Microsoft deal. Microsoft was introduced very late in the play when Nokia's cart was already rushing full speed down the mine shaft. Of course it's disappointing that Stephen Elop couldn't help the company much and he still got a juicy prize for his work. But Nokia absolutely would not be "still the top handset maker" if Microsoft didn't buy the handset business. Microsoft was only called to soften the inevitable doom.

  8. at other end of its old business by dunkelfalke · · Score: 1

    Rubber boots and bicycle tyres?

    --
    "It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
  9. Re:Nokia is a post it note in tech history by Hognoxious · · Score: 1

    I never understood how EPOC, which was light and clean and reliable, evolved into such a mess.

    Second system effect?

    --
    Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  10. Re:Nokia is a post it note in tech history by Hognoxious · · Score: 1

    Correct. I'm speaking from an end user POV. The amount of stuff on my E71 that simply didn't work was astonishing.

    Care to share some insights as to why it was a bugger to develop on? Too objecty?

    --
    Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  11. Re: Nokia is a post it note in tech history by cheesybagel · · Score: 1

    Bullshit. Nokia was still the top smartphone vendor when Elop came on board. He's fully responsible for the mess he created.

    He forced people to change to a totally incompatible Windows OS that was itself obsoleted by yet another Windows OS. Of course application developers fled.