Microsoft to acquire Nokia’s phone business for $19B? | Hacker News Reader

Microsoft to acquire Nokia’s phone business for $19B?

bgr.com

42 pointsrmah30 comments

The thread title is awfully linkbait-y for something that is a) just a rumor, and b) coming from an "insider" that is significantly less than solid.

I would have kept the ", insider claims" from the article but HN wouldn't let me

Might be worth throwing a "rumored to" or "maybe" into the headline if you can.

OK, done.

Quick update: Microsoft's head of communications said "no comment" when asked about this. Nokia's CEO will be on CNBC later today. I'll update later based on what he says.

Wall Street Journal: Nokia says reports of the Microsoft deal are “completely baseless".

As thin as this article is, it's something that wouldn't surprise me a bit to find out is true. MS practically bought out Nokia with the Elopoclypse, after all.

What is this 'Elopoclypse' you speak of, can you elaborate?

If I were MS I'd do this deal very differently than standard deals. It would be contingent on a successfull rollout of Nokia phones, with success defined as sales.

So the deal would be that they'd buy Nokia's phone division for some premium (maybe $19B is that number) assuming that Nokia ships 5M phones in Q4 2011 and 20M phones H1 2012. If that happens the deal goes forward. Otherwise the deal is killed.

I'd do it this way for a couple of reasons:

1) The Nokia brand run by Nokia has a lot of value. Not sure if MS owning the brand hurts it. But if they can ship a solid phone that sells the disruption to MS owning the brand is disminished.

2) Having this sort of incentive keeps Nokia hard at work until these phones ship and sell. Otherwise, I'd fear an exodus of talent. Which even if it doesn't effect the phones, may effect perception.

And if I may reply to myself :-)

This ties into my latest theory as to why Ballmer is in good standing with the board for now: Nokia.

My theory is that Ballmer has a very solid relationship with Elop. Recall that Elop did the odd thing of announcing he was going to Nokia, while still President at MS. I can't recall many examples of that happening. Ballmer must've been fine with it.

I suspect the Nokia partnership/acquisition is Ballmer's big play and the board knows it. Viewed in that light the Skype acquisition and Nokia play are the same deal (you don't do an $8.5B acquisition, while you're in the midst of a huge Nokia play, unless you've tied them together).

The board likes the Nokia play and is seeing it through. If it works out, Ballmer is there for a while. If it doesn't work out then Ballmer is gone.

Please somebody let me know if I missing something here but this is what happens when a CEO is a totally incompetent. Five years later Nokia doesn't have an iPhone alternative and the best shot is to sell yourself to the enemy of your enemy which I don't really think is a enemy since Stephen Elop is a former Microsoft Executive.

I mean, I like Windows Phone, Silverlight and XNA are awesome platforms, but Symbian OS wasn't that bad...

and to do what?...

the two companies have already reached a deal to create new Windows Phone devices, a dozen of which are expected to launch next year

... a dozen phones? Don't get me wrong but if Nokia wanted to create more segmentation between it's products why don't they join Android party anyway?

>Please somebody let me know if I missing something here but this is what happens when a CEO is a totally incompetent.

Which CEO are you talking about?

If this turns out to be true... well, Nokia missed its damn chance by not buying Palm when it still could. webOS would have gotten some real traction on that famous Nokia hardware quality. It would have been a real Win-Win.

Another source independently corroborates this story: http://techie-buzz.com/mobile-news/microsoft-buying-nokia.ht...

Nokia really fell behind this last generation and microsoft is not getting anywhere with their diversification into other areas effort.

Update: A Nokia spokesman says the Microsoft rumor is baseless

Nokia's current market capitalization is over $25 billion.

It will surely drop below $19B when they start making only WP7 phones ;-)

Elop has barely arrived. Give the man some time.

So the new captain of the sinking ship is to blame if the ship sinks further a little time after he took over?

Geez, I get your MS hate but this is stretching things.

Nobody gives much credibility to Elop's strategy of reviving Nokia's smartphone business with WP7.

That didn't exactly help to stop the sinking ship.

We can't blame Elop for the years of suicide of Nokia - is is a consequence, not a cause - but we can blame him for blowing a hole on the hull in a lunatic attempt to make the ship float.

The rumor is that MS would buy the phone business. Nokia also has several billion dollars in cash, Navteq and a 50 percent stake in Nokia Siemens Networks.

Shens. Shame on BGR.

Nokia has a non-phone business?

They used to make all kinds of stuff, like re-badged F5 product, software, and servers. Also: Boots.

They started as a paper mill.

They make tires! I understand they take up some unhealthily larger percent of the Finnish economy

The tire business has been a separate company since 1988, called Nokian Tyres:

http://en.wikipedia.org/wiki/Nokian_Tyres

This would be the smartest thing MSFT could do to make themselves relevant in the phone space. They need to build their own hardware. If they don't they will never get anywhere because HTC are building Android phones as fast/faster than WP7 phones. They need to do the Xbox strategy and build a killer device with their own killer software and then have 3rd parties line up to dev for it.

It worked for Apple. It works for Nintendo and Sony. It works for Microsoft.

Why they continue to try the PC clone model when Android already has that locked up is beyond me. It made sense to do the clone thing when you were cloning IBM PCs for cheaper. Android is cloning iPhones "for cheaper".

I don't think you can have two competing "standards" in the same market for commodity platforms. See HD-DVD, Betamax, MiniDisc, real media, and windows media formats for details on how this usually works out.

>>>I don't think you can have two competing "standards" in the same market for commodity platforms.

iOS, Android, webOS, WindowsPhone. There's four. Do you really think that rule applies here too? Of the four, I see only Android as becoming commodity quickly.

Some missing facts:

1. Profit warning came about from two trends: -China CDMA, Nokia still does not have devices -Low cost android phones eating Nokia Series 40 market

MS buying Nokia or Nokia licensing MS Phone does nothing to alleviate those two trends...I get the impression that the division that got their vote on Nokia acquiring mobile service firms stomped their feet as Nokia licensing Ms Phone only protects the Nokia mobile services assets/market.

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