So, The Wall Street Journal is reporting that Microsoft was very close to take over Nokia, but that the talks eventually broke down, probably beyond repair – at least for now. The reasons the talks broke down illustrate something that I have repeatedly tried to make clear for a long time now: Nokia isn’t doing well.
Ever since Nokia CEO Stephen Elop burned all his ships in the middle of the ocean by declaring all his existing platforms dead long before the eyed new platform was ready, Nokia has been on a massive downward spiral. This downward spiral is best illustrated by Asymco’s chart that I already used when discussing Nokia’s latest quarterly results. The gap is the exact moment Elop announced the death of Nokia’s existing platforms, and effectively killed the company.
On top of Nokia smartphone sales being quite lacklustre, their feature phone business isn’t doing much better – those sales are dropping like a brick too, faster than the company expected, even. I summed up Nokia’s awful performance as such:
Ponder on this figure: in total WP7 and WP8 combined, Nokia only sold 19.9 million Lumia phones. That’s it. To put this into perspective: in the first quarter Nokia sold Lumia devices (Q3 2011), Nokia still sold close to 20 million Symbian devices. In other words, Nokia was pumping out more Symbian phones per quarter in 2011 than it has sold Lumia phones in total to date.
So, according to The Wall Street Journal, Microsoft was in talks with Nokia to buy the company – but the talks broke down because of price, and Nokia’s “faltering market position”. In other words, Don’t take it from me, don’t take it from anyone else – even Microsof itself says Nokia is kind of a lost cause. And with the failure of Nokia, we have the failure of Windows Phone.
And thus, we’ll see the Surface phone this year, or early next year. Guaranteed.
Elop is an idiot. He confirmed that when he declared Android to be it’s competition, and wanted to compete only using WP7 against all the other handset makers that were selling both wp7 and Android, or iOS.
Besides firing Elop, I think Nokia could stand a chance at some recovery if they started selling Android phones immediately. Their hardware looks really good, and regardless of one’s opinion of WP7, it isn’t making a dent in the Android/iOS ecosystems.
If their hardware had software on it that could sell better, they could at least try to turn things around.
If they decide to stand proud on their sinking ship, or fail to turn things around, I could imagine someone will want to buy them, if only for their patent portfolio (I’m only guessing it would have to be somewhat decent). I see Amazon, Microsoft, Google’rola, Apple, Samsung all bidding.