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 zsekeres on Tue 3rd Sep 2013 09:44 UTC in reply to "Comment by Nelson"
zsekeres
Member since:
2011-02-11

Consider the following:
32,000 employees will transfer over. That's massive. Its a testament to the value of the devices unit. Paying $7 billion for what js supposedly a dead end venture doesn't make sense. Obviously Microsoft sees tremendous value.

Culture clash was the term which came to my mind...

Microsoft is buying exclusive rights to the Nokia brand for Asha, you don't pay for something you don't plan to continue, ...

Ah, so Palm is still around? Great! Which reminds me: Who produced these Kin phones which are still famous for their high speed failure?

What is more likely is that Mr. Elop secured the financial stability of Nokia by giving them billions, ridding them of outstanding liabilities,...

That's true! Good for Nokia to get rid of the money pit.

...and transferring the teams executing on the Lumia business to a company with unlimited cash.

Vast amounts of cash - yes. Unlimited? No. And those damned shareholders: See the appointment of ValueAct to the board.

He was masterful in ensuring that Nokia commanded a majority of WP sales in order to force Microsoft's hand, and in the process he's made himself the front runner for CEO to be in charge of the grand vision.

You should join marketing ;-)
... wait that's mean: I take it back...

And every the YOY rising market share of WP is quoted I have to think of this one:
http://xkcd.com/1102/

Reply Parent Score: 4

RE[2]: Comment by Nelson
by bitwelder on Tue 3rd Sep 2013 10:39 in reply to "RE: Comment by Nelson"
bitwelder Member since:
2010-04-27

Culture clash was the term which came to my mind...


Oh yes. When two European companies tried to "friendly" merge into what was NSN, internally it was already quite a culture clash, that ripped the company fabric from inside.
I wonder what will happen in this case where differences are MUCH bigger.
But this is just a takeover so probably many of those 32000 will be just shown the way home as soon as legally possible.

Edited 2013-09-03 10:40 UTC

Reply Parent Score: 4

RE[2]: Comment by Nelson
by Nelson on Tue 3rd Sep 2013 10:46 in reply to "RE: Comment by Nelson"
Nelson Member since:
2005-11-29


Culture clash was the term which came to my mind...


That's a worry I also share. Microsoft is known as an abrasive place to work -- and from what I've heard about Nokia there was always a very upbeat, cooperative mentality.

This is why I'm hoping Mr. Elop becomes the next Microsoft CEO. There is just too much going for him. He's run Microsoft's most profitable division, he's run Nokia. He knows both.

He'll continue the course Microsoft has charted for itself in its reorganization as well. The man is very well spoken and knows the ins and outs of Microsoft.


Ah, so Palm is still around? Great! Which reminds me: Who produced these Kin phones which are still famous for their high speed failure?


Right, your point is well taken, which is why I stated in my first comment that I worry about the integration.

It can either go like Project Pink/Kin or it can go like Skype, Kinect, and even Google's Android. Acquisitions are always a risky business. The one thing going for Nokia/MSFT is the fact that they've had a partnership for two years already.


That's true! Good for Nokia to get rid of the money pit.


Its actually a very favorable deal to Nokia upon a second look. They also get $2B of immediate financing from Microsoft. That covers the entire NSN acquisition.


Vast amounts of cash - yes. Unlimited? No. And those damned shareholders: See the appointment of ValueAct to the board.


OK -- you got me. Not unlimited, just enough to buy Nokia like 9 or 10 times over.

The ValueAct stuff I'm not so worried about, the Board appointment was to avoid a protracted PR battle, but I'm not convinced they are completely beholden to them, especially since whatever supposed institutional support they have may be very fragile and predicated upon very specific critiques.


And every the YOY rising market share of WP is quoted I have to think of this one:
http://xkcd.com/1102/


That's true for YoY percentage increases, but this is actual marketshare increases which are concrete.

For example, WP grew 77% YoY but they didnt grow 77 marketshare percentage points. An important distinction.

Any way its sliced, Windows Phone is growing in Europe and other parts of the world and I wish some people would finally admit that.

Reply Parent Score: 3

RE[3]: Comment by Nelson
by bnolsen on Tue 3rd Sep 2013 12:46 in reply to "RE[2]: Comment by Nelson"
bnolsen Member since:
2006-01-06

nokia sales were growing but still utterly pathetic. the amount of money being dumped into pushing sales is amazing. profitability is nowhere to be found for wp8. the one going for them is that apple seems to have somewhat stagnated and 2nd place might be available.

Reply Parent Score: 1

RE[2]: Comment by Nelson
by ricegf on Tue 3rd Sep 2013 11:44 in reply to "RE: Comment by Nelson"
ricegf Member since:
2007-04-25

"32,000 employees will transfer over... Obviously Microsoft sees tremendous value.

Culture clash was the term which came to my mind...
"

Oh, come now, I'm sure it will work at LEAST as well for them as the Intel and Nokia engineers who collaborated on Meego!

Reply Parent Score: 3

RE[3]: Comment by Nelson
by zsekeres on Tue 3rd Sep 2013 17:59 in reply to "RE[2]: Comment by Nelson"
zsekeres Member since:
2011-02-11

I stand corrected, you are perfectly right!

Given all the apparent synergies what could go wrong?

Reply Parent Score: 2