Linked by Thom Holwerda on Wed 18th Sep 2013 23:07 UTC
PDAs, Cellphones, Wireless

Cyanogen, makers of popular software based on Android that extends the abilities of smartphones, is making a bid for the mainstream. The four-year-old company, which began as a one-person side project, said today that it has raised $7 million from Benchmark Capital and Redpoint Ventures. The goal is to vault past Blackberry and Windows Phone to become the third-most popular mobile operating system, after traditional Android and iOS. And the company is already closer than you might think.

The announcement blog post has more details and background. This is either the best idea they've ever had, or the beginning of the end. I honestly have no idea which of the two it will be. I like the fact that they might be more popular than Windows Phone though - puts everything into perspective, doesn't it?

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RE[2]: Comment by Nelson
by Nelson on Thu 19th Sep 2013 11:34 UTC in reply to "RE: Comment by Nelson"
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Sure id be happy to go into some of it. First we can go back to 2010, the stock is tanking, Symbian market share is falling, and probably worse, Nokia as a brand is eroding.

The Board took a hard look (including Android) and decided to take an olive branch from Microsoft. It included a ready made OS and ecosystem, billions of dollars in financial support, engineering collaboration, etc

This isn't a deal they could extract from anyone else, especially when they were starting to be outpaced by the market, facing pressure from the impending Android apocalypse, and their white horse MeeGo was a stagnant joint venture with Intel (we all know what a good partner they are).

So Nokia made a choice, and 10 months later they had a phone on the market, then six months later they had another one, then the pace increased until today there's a device roll out every two or three months.

They also got their mapping IP front and center in this OS and also relaunched some of their forgotten services (Music for example).

Lumia sales increased QoQ every quarter except one single since their launch two years ago. Lumia name recognition is growing, the ecosystem is growing, market share is growing (EUR5, UK, France, Italy, Mexico, India, NZ, Latin America) and they are approaching break even (12.5 million according to MS with double digit sequential growth over the past few quarters).

What was the problem then, why sell? MSFT likely gave them a more certain future. Does Nokia roll the dice and hope they have the cash to keep up the momentum, or do they take the parachute from MS and reevaluate the fundamental direction of the company?

They chose the latter and unloaded an unprofitable division to MSFT for 7 billion, increasing their cash to 10 billion, which is some nice breathing room. As well as some nice immediate long term loans from MS.

Now Nokia is free to chart a new path, go into telecommunications via NSN by acquiring smaller players or they can focus on optics, or monetize their enormously valuable patent portfolio, or all of the above.

Nokia offloaded risk and kept the reward (Platform support payments to MS without having to reciprocate licensing fees for WP devices, and they own 100% of a profitable venture with NSN)

Their stock went from 4 to almost 7 dollars and they're even talking about a dividend payment.

Elop and the board saved the company and secured 32,000 jobs to MSFT, ensuring the Lumia line up lives on.

Reply Parent Score: 2

RE[3]: Comment by Nelson
by RshPL on Thu 19th Sep 2013 15:08 in reply to "RE[2]: Comment by Nelson"
RshPL Member since:

Why Nokia did not continue the N9 line? This phone got some very positive reviews. Why not keep this life boat? This is one of the reasons Elop has been called a trojan horse.

Reply Parent Score: 3

RE[4]: Comment by Nelson
by Nelson on Thu 19th Sep 2013 16:11 in reply to "RE[3]: Comment by Nelson"
Nelson Member since:

Lumia devices also review extraordinarily well. So do some Symbian devices like the 808. Nokia makes good phones, but that's not enough.

The Trojan horse charges are childish and unfounded, unless the entire board including its President are complicit in this grand conspiracy to destroy shareholder value.

Reply Parent Score: 3

RE[3]: Comment by Nelson
by ndrw on Thu 19th Sep 2013 20:32 in reply to "RE[2]: Comment by Nelson"
ndrw Member since:

Hardly an achievement.

They could have sold the company back in 2010 and get more money than now (read: everything they have done since 2010 had negative value).

Or they could have kept shipping Symbian phones and release about anything on Android (read: do close to nothing) and actually earn some money.

Or they could have tried to push their own system (which they already had!) - more difficult but potentially far more profitable.

Instead, they have chosen to destroy their own business and sell it for a small fraction of its former value.


Reply Parent Score: 5

RE[4]: Comment by Nelson
by Nelson on Thu 19th Sep 2013 21:07 in reply to "RE[3]: Comment by Nelson"
Nelson Member since:

I love how you and the ones who think like you seem to pretend all was rosy with Symbian and completely disregard the collapsing stock price and market share. Symbian market share was in freefall a full year before Windows Phone was in the picture -- so was the stock price. Shareholder value was going down the drain.

Elop inherited a terrible situation, a deteriorating cash position and a company who's sales were contracting (but fixed expenses were not).

Re: Android

It would have taken longer to bring one to market, especially without the investment and engineering resources from Google. They also bet on the wrong horse, with TI deciding to up and abandon mobile chips which threw off their MeeGo efforts.

Reply Parent Score: 3