Microsoft to acquire Nokia
microsoft.com
microsoft.com
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.
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.
For example, Microsoft is permanently enjoined from restricting OEM crapware preloads. OEMs are allowed to preload whatever they wish on top of Windows.
However, it's perfectly fine for Microsoft to bundle an app store -- so long as an OEM is also allowed to load its own app store. (As Lenovo is doing.)
As for Windows RT and Windows Phone, Microsoft can do anything it wants. When the news came out that Windows RT would only allow Internet Explorer and would only allow programs to be loaded through the app store, the EU competition commissioner said in an interview that he saw nothing wrong with it.
That's because the antitrust case defined Microsoft's monopoly to be over x86 operating systems. Windows RT and Windows Phone run on ARM. What's more, Windows RT and Windows Phone do not have anywhere close to a monopoly of the tablet or smartphone markets.
There may be some tying issues, but branding is not a form of tying.
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.
It's probably part of their IP licensing deal about the secret patent list Android violates. They pay less per Android phone if and only if they build Windows Phone devices.
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.
- It lost at least 60% of its value in less than a year (price for a new one dropped by that much)
- MS wants me to pay them if I want to build an app to use on my own phone
- And after I've paid them I can only put three apps that aren't published on there. If I publish them in the app store and would like to use them myself I have to buy my own apps. So basically just give them money.
- No significant software updates
All in all, it's a good dumb phone, but it's not a great smartphone.
You don't have to pay them to build for your own device. Just register it as a development device and you can push your own stuff to it. I just did this with WP8 and it's fine.
Not published an app yet so can't comment.
No significant software updates (compared to Android that is). That's a good thing. The platform is pretty stable and consistent across all vendors. It's a shit trying to push an app to 5 different versions of Android.
The only PITA is to do WP8 apps, you have to use Windows 8 which I really don't like. It's bearable with Start8 though.
To be honest I've owned iPhones, Android handsets (Samsung, HTC) and the only thing I don't want to throw across the room due to stupid problems has been WP8.
less than Apple and Google charge
Since there, you CAN'T deploy a personal app in your wp8 because you need to unlock it first and to do that you need to have a developer account.
While WP 7 was a huge success in this regard, the hardware / platform wasn't designed with a long roadmap set for its future, as in order to advance Windows Phone to WP8, the hardware specs of all of the WP7-generation devices was to be abandoned.
I just upgraded from my HTC WP7 device to a Nokia Lumia 1020, and the phone is amazing. I use Android on my tablet, but I prefer Windows Phone on my phone. FYI, the camera on the Lumia 1020 is as amazing as all the reviews say it is.
I had been used 4 platform (ios, android, BB and WP7 & 8) And my Lumia 920 is my all time favorite smartphone and it is a pleasure to develop for it in comparison with Android and iOS. So I guess is a matter of taste
I have. In fact, it's a perfectly good phone - works well, makes and receives calls with good quality, does not experience loss-of-signal too frequently and both browsing and e-mail work as expected.
But that is the feature set of a featurephone. Coincidence or not, former featurephone users are the only demographic where Windows Phone is growing.
"It doesn't suck" is not competitive these days. Certainly, there are iOS and Android and Blackberry devices that do suck, but there are plenty others that don't.
If someone doesn't agree with you it doesn't mean they are a shill.
This isn't Slashdot!
Maybe, but sometimes this is the simplest explanation to a well-timed explosion of PR-like, blatantly untrue, astroturfish and "loltastic" statements.
Nokia is a failure in the smartphone business, only out-failed by Blackberry at the moment. Microsoft has been a has been in that sector since the arrival of the first iPhone. If anyone seriously believes two bricks float better than one, it's time to change the meds.
It's not a failure, nor is it a success. Yet.
People were saying this a decade ago about the Xbox remember.
Microsoft only decided to compete just over two years ago and they're entering a very competitive market. It takes time to get traction on these things and they're doing it, just slowly. The potential to grow exponentially is still there.
As for the declaration of failure, are you really qualified to judge what a failure is or are you spouting the echoes of all the tech news journalists who like getting hits from slating Microsoft (which will never become unfashionable)?
The Xbox was a failure.
The Xbox 360 was better executed than the more ambitious PS3. It succeeded while the PS3 did not do so well, yet the PS3 is far from being a failure.
> Microsoft only decided to compete just over two years ago
You are ignoring the decade+ behind WindowsCE and Windows Mobile. Microsoft has always been a player in this market.
http://www.neowin.net/news/report-microsofts-xbox-division-h...
It was a very different market that Windows Mobile competed in. A market that emphasized physical keyboards, rather than touchscreens. A market with $200 device subsidies, rather than $400 smartphone subsidies. That market disappeared, and so did Windows Mobile's chances. In fact, every major product from that market is either dead or on life-support. Palm, Blackberry, Symbian.
Today, Windows Phone 8 shares very little code with Windows Mobile 6.5. Maybe some drivers, that's about it. It uses a different kernel, a different UI toolkit, a different API.
Microsoft failed horribly in the PC spreadsheet market, too. But they threw away their original product (Multiplan) and ported Excel to the PC. Laughing at Multiplan's failure would've been irrelevant when discussing the prospects for Excel. The introduction of the GUI disrupted the existing market for DOS spreadsheets.
Similarly, the failure of Windows Mobile 6.5 is irrelevant for the purposes of discussing Windows Phone's prospects. The problem with Windows Phone is that not that Windows Mobile failed -- but that Windows Phone has a low market share.
It seems you assume Microsoft decided not to compete then. I wonder why they made Windows Mobile then...
> Similarly, the failure of Windows Mobile 6.5 is irrelevant for the purposes of discussing Windows Phone's prospects.
Forgive my lack of faith, but a company that has, consistently and for as long as this market existed, failed to deliver a decent product, even despite the huge mountains of cash spent in developing it, seems a very unlikely competitor now.
Astroturfing is only one of many possible motives for a comment being left. We should not be so quick to jump on that as an explanation for anything which doesn't agree with our notions.
Please refer to https://news.ycombinator.com/item?id=6320222 for the reasons I found kyro's comment very PR-like. I expect, and will remain expecting, HN comments to be based on reality.
So the way I see it, M$ just bought a hardware company that already uses M$ software. No brainer.
I agree with another commenter.. Microsoft about a hardware company that already used its own software. No brainer.
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
* For nominal values of 'nobody'.
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...
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
The report [1] speaks of sales and actually claims that 42% of the sales are actually coming from feature phone owners (who probably like the price point of the Lumia 520 and all). Retail channels are not feature phone owners ;).
Btw, nu.nl is not a source, really not a source.
Of course it's a source, but you can dispute its reliability. For a substantial part of the Dutch population it is reliable enough to read daily. And it's not as if they have an agenda here.
Tweakers.net is also not a source, too biased (i know you didn't mention tweakers, just sayin').
So, what's the point of dragging Tweakers.net into the discussion?
[1] http://www.kantarworldpanel.com/Global/News/Record-share-for...
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.
Linux is not hard to learn, has great guis and works on most of the hardware.
There is potential but all the services are not there yet. Android is valuable because of all the service intergration it offers, not because it is *nix based , same with IOS.
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...
"Total corporate federal taxes paid fell to 12.1% of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30.... And well below the 25.6% companies paid on average from 1987 to 2008."
I wonder just what happened starting in early Federal FY 2009, which started on October 1, 2008. Perhaps this: https://en.wikipedia.org/wiki/Great_Recession?
Now, when we're talking about seriously profitable companies I don't deny there are tax breaks to be had, some easy, but does anyone think these companies are better off focusing more on financial engineering or software and electrical engineering?
You might compare the parking of cash offshore to Microsoft's buying a $100K Treasury instrument whenever they had too much cash on hand, as their first CFO was horrified, amazed and delighted to discover.
ADDED: is this double taxation? In another HN item on this, it was commented that this parked money has already been subject to local taxes: https://news.ycombinator.com/item?id=6321925
I know we do that with personal income taxes, absent a tax treaty with the other nation.
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)
A black T-shirt today. :-(
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.
On the hardware front, MS might actually enjoy having more hardware engineers to help with the Surface/Xbox stuff.
HR, payroll, etc might be not that safe though.
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.
People think the Surface is expensive because they compare it to the iPad or Nexus 7/10 product lines, but it seems like Windows RT is closer to a port of Windows 8 to ARM than anything else, which makes it seem odd that you'd think to run Windows Rt on a $200 tablet.
1) The obvious one and only mildly interesting is the customization. I believe that will appeal to a large market segment.
2) The less obvious and more creepy one is the battery saving combined with the always on features. I believe this is very much the Google vision at play. The Moto X is always on, aware of its surroundings, and integrated with Google Now. I see this is part of the same vision that created Google Glass, and ultimately will be a Google chip in your brain.
How well it works in practice I have no idea. Google Now haven't impressed me, it best it tells me what I wanted to know 15 minutes ago. The Moto X features be utterly useless. But the direction is definitely interesting.
The phone is clearly not interesting to those mainly interested in peak CPU performance, DPI, or screen size. I'll also skip it for now. Let someone else be guinea pigs.
Note: RIM changed its name to Blackberry Ltd, with a stock ticker of BBRY.
This is why I mention only the patents. Those are clearly valuable. The customer base is debatable.
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.