Linked by Thom Holwerda on Tue 3rd Sep 2013 05:39 UTC
Microsoft Ever since Stephen Elop became CEO of Nokia we knew this outcome was inevitable. It was his job to make it as easy as possible for Microsoft to acquire the vital parts of Nokia, and here we are: Microsoft is acquiring Nokia's devices unit for 3.79 billion euro, and another 1.65 billion euro for its patents. It's a bit of a complicated deal in that Microsoft buys the Asha feature phone brand and Lumia smartphone brand outright, but will only license the Nokia name for current Nokia products; the Nokia brand will remain under the control of Nokia the company. This means Nokia as a phone brand is effectively dead.

In addition, Stephen Elop will return to Microsoft. I'm sure entirely coincidentally, Ballmer announced recently that he's stepping down.

All this was as inevitable as the tides rolling in. Nokia has been going downhill and has stagnated ever since the announcement it would bank its future on Windows Phone. It went from being the largest smartphone manufacturer to an also-ran, which is made painfully clear by the fact that Microsoft paid more for Skype than it does for Nokia's devices unit.

A painful end for a once-great phone brand. This was the plan all along, and in essence, Nokia's board has executed it masterfully; the Finnish company has switched core markets several times in its long, long history (it started out as a paper company), and the unprofitable phone business was a huge liability for the company, despite claims by some that Nokia was doing just fine. Nokia's board has masterfully gotten rid of this money pit so it can focus on the parts that are profitable.

And, as always, the next Lumia will turn it all around.

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RE: Comment by Nelson
by Tony Swash on Tue 3rd Sep 2013 11:35 UTC in reply to "Comment by Nelson"
Tony Swash
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Oh dear - this looks bonkers. Two drowning men clutching at each other can't save themselves.

I thought with Ballmer going there was going to be a real rethink at Microsoft and that part of that rethink - if they thought clearly and clinically about the company's future - would be to abandon Windows Phone. Microsoft appear to making exactly the same error Apple did back in the 1990s. Then Apple was hypnotised by the staggering success of Microsoft and so it thought it had to be another Microsoft, it had to compete with Microsoft on the same terrain and chase the same markets and products, deploy the same business strategy. It didn't - which is exactly what Jobs said when he returned, forget Microsoft and concentrate on what Apple does well. Since MacOSX Microsoft has been hypnotised by Apple, and then by a combination of Apple and Google. MacOSX lured Microsoft into the elephantine disaster that was Vista, iOS and Android have lured it into the disaster that is Windows 8 and Windows Phone, Google search lured it into the disaster that is Bing, and it's the same story with Zune, XBox and so much else.

Microsoft needs to start shedding product lines, it needs to be radical about that. All the pretence at being a consumer products company should be shed, Microsoft has never been a consumer products company and has never made any profits of consequence in consumer markets, and that's after years of intense effort and billions and billions of money flushed away. Why does Microsoft need to make a phone, a gaming console, a search engine?

Microsoft got so used to being omnipresent and hegemonically dominant for a brief period in the 1990s that it came to think that that was the only way to run a big successful tech company. It isn't. Microsoft need to concentrate on who and what they really are, which is a software company that is most successful in the enterprise markets. We are witnessing as a consequence of the explosion of mobile computing devices the growth and establishment of the largest and most vibrant software markets in tech history. These devices and the software they run will dominate computing for the next decade and more, and are transforming corprorate IT. And Microsoft does not have a presence of consequence in those markets. What an utter strategic failure. It's 2013, there are already a billion plus mobile computing devices in use and there isn't a descent working version of Office that can run on those devices. That's insane.

So what does the next couple of years hold for Microsoft? An absurd and almost certainly disorientating and chaotic internal reorganisation, a lame duck CEO followed by a new one trying to take control of the sprawling Byzantine mess, and now a huge new loss making business bolted on. It's not just the CEO who should be sacked it's the entire Board of Directors. How long until a shareholders revolt?

Ben Thomson is as interesting as ever on this fiasco.

Additionally read the numerous posts by the ex-Nokia exec Tomi Ahonen who has picked apart the Nokia Windows Phone disaster from day one and who perceptively identifies the Microsoft acquisition of Skype as the key factor in the poisoning of Microsoft's relationship to the crucial carriers.

On the other hand Brian S Hall think this is a brilliant move

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