This is an acquisition that arguably puts Microsoft mobile capabilities above that of Google's, and closest to Apple's. They're getting industry veterans with great design talent. They're getting a Lumia product that has the best build quality of any non-Apple smart phone. They're acquiring proven channels to access global markets. Both Nokia and Microsoft have been floundering in the mobile space recently; neither have had any real explosive successes. Together they might make some really compelling offerings.
I'm not a fan of their mobile OS, but I am a huge fan of Nokia's latest smartphones, and if Nokia design's talent can figure out how to introduce a better UI, I'd seriously consider getting The Windows Phone as my next smartphone.
To have this loltastic sentence at the top of hn makes me wonder if MS or some PR has a bunch of shill accounts they roll out for occasions like this. Seriously? As the other reply said, they were already together. And losing. Badly. And hated, broadly.
And the reason the windows phone sucks so badly is that MS tied the PC and phone UIs together into a "push-me pull-you" (Windows 8 everywhere) that can't succeed at either task. And so to escape MS will have to back out of their deal entirely, go back to designing phones and PC OSes separately, and given MS' ingrown bureaucratic insanity there that seems less than likely.
Grafting a few more limbs onto a failing Frankenstein will ... create a bigger failing Frankenstein.
And so to escape MS will have to back out of their deal entirely, go back to designing phones and PC OSes separately, and given MS' ingrown bureaucratic insanity there that seems less than likely.
Why would they ever want to go back to designing them separately? How would that benefit anyone in any way? In case you hadn't noticed phones are computers now, integration is the future.
If someone doesn't agree with you it doesn't mean they are a shill.
This isn't Slashdot!
So the way I see it, M$ just bought a hardware company that already uses M$ software. No brainer.
Nothing will change as a result of this.
Lots of that is speculation on what I hope Microsoft does with this, namely adopting Apple's marketing simplicity and control of the user experience.
A good guess is that the enthusiasm at e.g. Samsung for making Windows Phones have gone down quite a bit...
Windows Phones seems to be an internal Microsoft thing now, Xbox style.
Man.. What have you been smoking?
> They're getting industry veterans with great design talent
Who consistently failed to exceed 3% of market share.
> They're acquiring proven channels to access global markets.
Very low-margin markets.
> Both Nokia and Microsoft have been floundering in the mobile space recently; neither have had any real explosive successes. Together they might make some really compelling offerings.
According to your logic, two bricks tied together float better than one.
A sail doesn't float and a hull doesn't move, but together they can make great boats
Actually, Nokia was slowly and steadily on a rebound in the markets where they were traditionally strong. E.g. market shares of Windows Phone in the five largest European economies has grown from 4.9% a year ago to 8.2% now [1]. That's almost half the marketshare of iOS (17.3%).
Most of those units were Nokia Lumias.
Sure, it's not where they were years ago percentage-wise, but the smartphone market has grown enormously since then, and WP is showing good growth (except in the US).
Source: http://www.nu.nl/tech/3565096/windows-phone-groeit-nieuwe-sm...
Btw, nu.nl is not a source, really not a source. Tweakers.net is also not a source, too biased (i know you didn't mention tweakers, just sayin').
Sent from my iPad
As to the life span of tech companies I think it will only get shorter. One thing I find interesting is that it's difficult for humans (including myself) to really internalize the overall effects of compounding interest. I read a comment the other day in which the author was joking about how they can't wait until 2023 when they get to look back and feel how they do now looking back at 2003. It doesn't always seem that the speed at which things are happening is increasing dramatically even if that's the case. The progress between 2003 until now will be completely overwhelmed just a few years from today.
http://blog.ted.com/2013/04/23/the-future-of-work-and-innova...
If Microsoft moved money in the United States, it would pay the difference in taxes -- namely, 22.5%. But if Microsoft spent the money outside the United States, then it would not pay this difference.
Incidentally, Finland will be reducing its corporate tax rate next year, from 24.5% to 20%.
http://en.wikipedia.org/wiki/Double_Irish_arrangement
As I understand it, these international profits remain in the tax-haven-resident Irish company, and cannot be repatriated to the US parent without incurring an undesirable taxation event.
It's highly likely that Finland-based Nokia is a fiscally efficient purchase for Microsoft. Both Finland and Ireland are EU countries, are in the Eurozone, and have a customs union.
(It would be interesting to compare this to Google's purchase of Motorola Mobility, which was an American company.)
Just to be clear, the strategy itself wasn't the problem, just look at Android, the problem was that technically their product was technically deficient. They failed to execute the strategy effectively. What I have always wondered is whether this was simply due to hardware limitations of the day, or whether the old Windows Mobile was deliberately held back technically to prevent it competing with Desktop Windows. If the former then Microsoft just suffered from a form of first mover's disadvantage, and a lack of foresight. If the latter then they richly deserve all the failure they've reaped. I'd love to know.
This thing started before Elop left Microsoft. They have perfected executive outplacement as an offensive weapon.
How the hell are the shareholders okay with this? I'm shocked it sold for under $10 billion. Nokia's total valuation is about 15 billion, and you'd have to imagine they'd have to pay a 30 percent premium when buying it, so that's $20 billion for the whole. I assume the devices division was worth at least half of that. Didn't Nokia already sell the telecom part?
Now if you ask: was Windows Mobile all a plot to blow up Nokia? That's an interesting question. I can't confirm that.
Wonder if it was intentional to run Nokia into the ground or just sheer incompetence?
This is an important aspect of the deal - bringing money earned overseas into the US is often costly (taxes, etc.). As a result, US companies often end up with cash sitting overseas with nothing to spend it on, and are hesitant to take the hit that happens when they bring it to the US... so this is a great way for Microsoft to use that money in an effective way.
According to this article, Microsoft has $60 Billion sitting offshore in order to avoid US taxes: http://www.forbes.com/sites/connieguglielmo/2013/08/01/apple...
As I recall we (the US) have the highest corporate income taxes in the developed world. It would be a gross dereliction of management's duty to shareholders to repatriate it unless really needed.
http://thinkprogress.org/economy/2013/04/01/1804801/no-ameri...
How deep is the integration anyway? Did Google and Microsoft end up owning the manufacturing plants? Apple is known to outsource the manufacturing itself.
It is not at all hyperbole to say 'Nokia played a key role in India's mobile penetration'. They sell affordable, reliable and rigid phones for rough use in rural places of India. And I think it's true for most other countries like Africa. On the other hand Microsoft mostly makes premium software and hardware. I don't know any affordable tool(w.r.t developing countries) from Microsoft. This may put Microsoft in a better position in terms of smartphone. But in other terms this may be a step towards 'diminishing power of poor people'.
I'm not sure it does either company much good. If anything it looks to me like a panic move of two companies who while from te outside they seem huge and successful to many are actually seeing the writing on the wal and have no real plan for the future.
This won't make Microsoft competitive with Apple where it wants to be despite the hopes of Redmond.
http://www.microsoft.com/en-us/news/download/press/2013/Stra... (page 21)
they bagged the guys who designed them as well.
Usually there is a decision to remove duplication within the corporation. If you were Elop next year running MS in Redmond, who would you lay off? The people in your building or those in the opposite side of the world in Finland?
Update: On a side note, manufacturing usually stays until the machines are no longer worth using. Then they shut the place down claiming inefficiencies and build a new factory somewhere else. They don't mention the lack of investment for 10 years of course.
A black T-shirt today. :-(
Nokia keeps the other two divisions.
Nokia is now primarily a telecoms infrastructure company, like Alcatel-Lucent. They're pretty closely matched. Alcatel-Lucent had €14.4 billion of revenues in 2012, while Nokia Siemens Networks took in €13.1 billion of revenues.
There's also the mapping division, but that's just 10% of the new Nokia's revenues. I'm surprised Microsoft did not buy it, as Google and Apple both own their own maps. In fact, I wonder if the mapping division wasn't what scuttled the previous attempts to reach a deal.
NSN is no longer Nokia Siemens Networks; it's Nokia Solutions and Networks now, and Siemens is no longer part of it.
It'll still exist. Most of the top executives are moving to Microsoft as part of the deal though.
I am curious if this deal required shareholder consent of any type. I'm sure the board had to approve. Still I don't know how I'd feel if I was holding onto a decent chunk of Nokia stock right now and I didn't get any say in selling out our core business.
[1]http://www.theverge.com/2013/9/2/4688530/microsoft-buys-noki...
So yes, it will require consent from Nokia shareholders.
Note: RIM changed its name to Blackberry Ltd, with a stock ticker of BBRY.
This seems like a great move from MS, they have bought more runway.
But come on, the move was telegraphed a couple of years ago.
Also, will they "upgrade" Nokia Xpress's (proxy browser) backend to use the IE engine in place of Gecko?
See : http://www.theregister.co.uk/2009/09/09/microsoft_destroyed_...
Yes, it leaves Nokia Siemens Networks and HERE Maps.
Last quarter, NSN accounted for 49% of Nokia revenues, and 108% of operating profit. (Not a typo -- the phone division lost money.) HERE Maps is insignificant, but for some reason Nokia wanted to hang on to it.
So, Nokia now has a slightly increased operating profit, plus an extra €5.4 billion from Microsoft. According to the press release, when you subtract out the purchase price for the "S" half of NSN, Nokia has €7.8 billion in net cash. For a company that closed yesterday at a market cap of €11 billion.
