Nokia acquired by Microsoft | Hacker News Reader

Nokia acquired by Microsoft

blogs.technet.com

865 pointsjasonpbecker553 comments

This is a great move. There is no money in being an Android vendor except if you're Samsung and are totally vertically integrated. With Windows Phone, Nokia and Microsoft at least have some hope of carving out a profitable stake in the market.

Anecdotally, I'm very impressed with some of the new Lumias. I got a 620 to replace my stolen iPhone, and for $200 unlocked its phenomenal phone. The build quality makes a flagship Samsung feel like cheap plastic crap. And Windows Phone flies despite the modest specs. I was disappointed in the 920 I had earlier, but at this price point the shoe is on the other foot.

I hope this is portends a Microsoft phone...

The market certainly seems to be agreeing with you in that the 520 and 620 are the most popular models.

How well does the first party Instagram app run on that Lumia?

Pretty well: http://www.windowsphone.com/en-us/store/app/6tag/7d795cdf-fb...

That is not a first party Instagram app.

and when I replied the parent lacked that qualifier; it was edited in.

Better than nokia maps and nokia transit on your iphone/android.

In his defence, what were the chances of that.

I like your little "first party" qualification to make sure your snark was accurate.

Anyway, there are plenty of great Instagram apps on Windows Phone 8:

http://www.wpcentral.com/tags/instagram

The "first party" bit is the scathing, indicative part..

Its Instagram's decision to "crown" a third party developer - Instragram has never expressed inability due to platform limitations - they always expressed lack of desire, probably from a philosophy of dis-taste towards Microsoft rooted in the prejudices of the founder or the group of developers at Instagram.

Or maybe marketshare and investment, like every other app maker.

Instagram didn't even make an Android first-party app for 16 months after the iOS one.

There is nothing great in notorious patent aggressor (MS) getting tons of mobile related patents...

Some reports are incorrectly stating that Microsoft is buying the patents, while Microsoft's own press release clearly states that they are only licensing them for a term of 10 years.

This is almost certainly to satisfy regulators who will have final say over whether this transaction will close.

Somehow I expect that MS will still have a strong say in how those patents are going to be used. This already happened with attack on VP8 even without any acquisition. MS hand behind it was not even very hidden. It will only get worse now.

The simple logistics of the deal make it very likely that the remaining Nokia shell company will become a patent aggressor. The only reason companies like Samsung and Motorola aren't firing off patent attacks daily is that their own substantial businesses fall risk to the same sorts of attack, leading to a sort of detente. By unloading the hardware business, the entity that remains will have all of the benefits of being a patent aggressor, with none of the liabilities.

And, naturally the one pulling the strings will be MS.

I doubt that. The remaining entity will be self-governed and will have -- to what I've seen -- no interest in or from Microsoft.

However Microsoft will have a 10-year license grant, meaning that Microsoft is immune to the beast anyways.

Microsoft can simply pay that shell Nokia to do the racket for them. Patent privateering is not news. Crooked companies who have something to lose pay non producing trolls to attack their competitors. Non producing trolls are harder to fight, and those companies stay in the shadows and avoid retaliation.

They'll simply dust off the SCO playbook. Unless the new CEO is made of very different stuff; or US legislators realise that patent aggression is the last refuge of a scoundrel, to paraphrase Samuel Johnson.

I think you mean Samuel Clemens.

Better known by his pen-name, Mark Twain.

http://www.samueljohnson.com/refuge.html

Wow, thank you. Now I know the quote predates Twain's use.

>This already happened with attack on VP8 even without any acquisition. MS hand behind it was not even very hidden.

Nokia was really starving for money and wanted to monetize their patents, and saw VP8 as a threat. Instead of waiting for it to be popular and then pounce, they pre-emptively requested Google(which is rolling in dough) to license their patents. They did spend a lot on R&D in their heyday, they're not a garden variety patent troll. If a CEO didn't try to get their patents licensed while hurting badly for money, they would be called out for it.

I fail to see any MS hand in this, hidden or not. Do you have any references to back that up?

>Nokia was really starving for money and wanted to monetize their patents, and saw VP8 as a threat.

I doubt it. It looked more like an attack on the open web. MS and Apple always didn't like open codecs. They never even implemented them in their browsers and products. Nokia is not part of MPEG-LA, so they aren't really direct competitors codecs wise. So I see no point for Nokia themselves to be such jerks as to attack open codecs. It makes more sense to do such thing for MS or Apple, and MS is in closer proximity here.

There is no money in being an Android vendor except if you're Samsung and are totally vertically integrated.

There are a lot of people who would have picked up the attractive, well built, well engineered Nokia devices if they had the platform of Android.

The core problem with the "no money in Android" argument is that you can't choose not to compete with Android if you're in the smartphone game, which is pretty obvious given that we're talking about a company that went from hero to zero largely at the hands of Android (RIM being another example).

WP8 just isn't compelling compared to Android for a lot of users, which led to a lot of people moaning that they wish they could get one of those nice Nokia devices...but WP7/8.... Apple obviously is very much in a battle with Android, though they're in a much better position, and it's one that Microsoft isn't going to be able to emulate bringing hardware in house (especially given that it was already effectively in house. This new arrangement changes essentially nothing, but makes official what people long assumed).

>There are a lot of people who would have picked up the attractive, well built, well engineered Nokia devices if they had the platform of Android.

Yeah maybe. There is no guarantee that the outcome would have been more favorable than being bought out by Microsoft.

>Apple obviously is very much in a battle with Android ...

Apple already lost to Android. Last count, Android had 80% of the market. There is zero chance of that changing anytime soon. Apple's saving grace is that they can cut themselves a nice little niche, and make some good margins based on the strength of their brand much like they do with Macs. This will be doubly true if HTML pushes out native apps and and makes the platform largely superfluous again. The war is over however.

Can we not talk about this in terms of war and battle? It is the business of selling consumer electronics, same as it has always been. You do explain your position well but I feel the references to war and battle water it down.

No one has been killed in the development of phones. I get that the MBA crowd read the art of war and it's practical knowledge seeped into popular discussion. But the endless reference to war in consumer electronics (and other areas not really war) is tedious and uninformative.

Whatever your personal hangups are, words such as "battle" (an extended contest, struggle, or controversy) and "war" (a struggle or competition between opposing forces or for a particular end) are entirely and absolutely appropriate for such discussions.

Your comment borders on bizarre.

No personal hang ups. Just expressing an opinion on the use of words that I think are overused and therefore watered down in today's environment. You clearly have a different take on it. No need to belittle me for my opinion.

Those combat terms assume zero-sum conflicts. There can be a situation where the smartphone OS market consists of multiple survivors, even if it's only a duopoly.

Neither of those are the full definition of the terms mentioned. Both have connotations of violence.

War is an armed conflict.

Battle is a military conflict.

Both have non-military meanings, but what is being said about the use the terms is not weird or bizarre.

How about we use language and imagery that most people understand.

Is this a question or a statement? Modern battle and war have very little in common with business. So, it is my opinion that the use is such terms waters down an otherwise reasonable well thought out comment.

Statement.

>the use of such terms waters down an otherwise reasonable well thought out comment.

This may not be a battle you're going to win.

> This may not be a battle you're going to win.

I think the war on this phrase has already been lost to be honest.

It probably felt like it to the staff who got fired a couple of years back

If you want to play a fun game, switch "Apple", "Google", "Microsoft", "Samsung", etc with the names of toothpaste and deodorant brands. It pretty much shows these oddly passionate arguments for what they really are: weird tech company zero sum games repackaged as religious wars. So long as any of these companies have appreciable market share and are profitable they're winning.

If Apple goes out of business it'll be scrappy MS v.s. Giant Google. Or if Google goes out of business it'll be the underdog MS v.s. the 800lb Gorilla named Apple. Even AMD, who has really no business competing with Intel at this point, and also has to deal with the higher performance ARM chips manages to survive and sometimes be profitable. Ultimately none of it matters because history has shown that there's always going to be competition. And ultimately thats exactly the way we want it to be.

Not a single person here should hope Apple and MS go out of business. Otherwise we might find out how evil Google is willing to be. The same holds true for the others. 90% Apple market share wouldn't be particularly good, even for the most rabid Apple fans. iPhone 5SSSSS anyone?

Ultimately what I find the most amusing about the rhetoric, is that post iMac and pre iPod/iPhone, Mac users were just happy that Apple wasn't going to go out of business. Pre Android, Samsung users were happy they were buying quality air conditioners and TVs... People would do well to gain some perspective on this stuff.

I agree.

I strongly dislike Apples locked down ecosystem and many of their offerings, but there can be no doubting that their success has been great for the industry. It's broken the MS monopoly (which has had beneficial side effects for linux too), encouraged companies to make products that aim for better than the lowest common denominator, brought UX front and center, recreated the small team of developers making software that lots of people can buy dynamic, encouraged the open web, etc.

As long as we have healthy competition for these marketplaces, I don't worry about the future too much.

Hey it's not just consumer electronics, Nokia used to develop DPI surveillance technology for oppressive regimes too!

I can't quite decide if them being eaten by a US corporation is a good or bad thing.

Nokia dearly promised[0] they wouldn't do it any more. But now all that expertise is safely owned by a US company and Nokia technically is not the same company any more, plus it's not really an oppressive regime if it's the global role model for Democracy(TM)

I'm kidding, I'm kidding. They are going to make phones. I can do some creative wildly free-associating tinfoil kookery if it's buried this deep in the comments, can't I? :)

[0] http://nsn.com/news-events/press-room/clarification-on-nokia...

Back at Netscape, Jim Barksdale hated the term "browser war", on the grounds that a war justifies extreme behavior. He didn't want us believing the browser war meant we should be breaking the normal rules.

Android has 80% worldwide market share, but it's much much closer in the US. If you take out the crap phones that are smartphone in name only, it's much closer worldwide. While Android is clearly winning by a decent margin, I'm not convinced it's over. I think the hopefully coming soon cheaper iPhone could make things a lot more interesting.

Note that I don't actually want the iPhone to win. I would very much prefer that neither "wins". 50% each would be a better outcome for consumers for years. Better yet, windows gaining share and having 3 at 33% would be awesome.

No, please, we have such hard time moving MS out of the hot field, don't bring them back!

Remember when everyone feared MS? I mean, that was really terriying time for our industry. How forgetful is it to "wish" MS could gain a third of the phone OS market shared... Apple and Google conjugated efforts kept the wolf outside and you want to open the gates?

However, I agree that a domineering Android/Google or Android/Samsumg is harmful for the market. Let us hope some other OSes can grab a piece of it. I have some hope in Cyanogenmod, which could be forking away from Android (just like Linux forked Unix). And, if you look at it, that is just what Chinese companies are doing (xiaomi, etc.): forking Android and gain market shares.

Huh? Microsoft was terrifying because they dominated the PC market. This comment proposes their having 33% of the smartphone market. How is that "terrifying"?

Microsoft has a long history of not playing fair. If it were to have 33% of the market, it isn’t unthinkable that it will try all possible dirty tricks in the book to gain the upper hand. Right now, Windows Phone’s market share is negligible, Microsoft has zero leverage so it has to play by the book.

Microsoft is also a completely different company now than it was dozens of years ago when this was an issue. They're more safe now, less risky.

“Microsoft executives have proved, time and time again, to be inaccurate, misleading, evasive, and transparently false. ... Microsoft is a company with an institutional disdain for both the truth and for rules of law that lesser entities must respect. It is also a company whose senior management is not averse to offering specious testimony to support spurious defenses to claims of its wrongdoing.” –Judge Thomas Jackson, 2001, United States v. Microsoft

In the last decade, Microsoft has been investigated and fined by several governments, and investigations by several are still ongoing.

That's a dozen years ago. So while you may think it's relevant now, it's not.

Since then, most of the leadership has changed, and, really because of that lawsuit, Microsoft became more serious, precautious company.

Last year, Microsoft was ordered by the EU to pay Euro 860 million, for breaking promises it made after the 2004 antitrust case. In March of this year, Microsoft was fined another Euro 561 million.

The more things change, the more they stay the same.

A ruling that is very controversial. The browser ballot was enforced based on the idea that Microsoft had a dominant share of the market, which this very thread goes out of its way to disprove. The EU decision was a cash grab, nothing more. Microsoft has no market dominance, and other more dominant players aren't forced to live by the same rules. If Android has 80% market share, why isn't Google forced to present a choice of default browser at first start up (simply allowing alternative browsers in the ecosystem was not enough for Microsoft in this case)?

Microsoft has been convicted multiple times for abusing its market position. As a repeat offender, different rules apply for it. That’s why Microsoft isn’t allowed to live anywhere near a school or playground.

Apple has been convicted of patent infringement multiple times and was recently convicted of abusing their market position to commit unfair trade practices. Yet no one breathes Apple and anti-trust in the same sentence.

> Microsoft is a company with an institutional disdain for both the truth and for rules of law that lesser entities must respect

Funny, replace Microsoft with Apple in this pull and it would still make sense (but not with the rest of the quote)

>just like Linux forked Unix

Darl McBride? Is that you?

Lol! Not sure why anyone would downvote you for that gem!

I'm sorry but moving this conversation towards being about Android and Android's "market share" is going off topic.

Microsoft clearly did not need to purchase Nokia to have a Windows Phone. That already exists (in partnership with multiple hardware vendors as well). So, market share of Mobile OSes is obviously not a (main) motivation behind this acquisition.

Nokia accounts for 80% of Windows Phone sales.

The "other OEMs" are basically HTC and Samsung. Both of which are primarily Android companies.

> Microsoft clearly did not need to purchase Nokia to have a Windows Phone.

They could not afford having anyone else buying Nokia. With the low stock valuation of Nokia, that was a realistic and very scary scenario for Microsoft. I see it as a pre-emptive move of Microsoft, and a move of Nokia (the non-phone part) to preserve their long-term independence.

Market Share (of a free OS) <> Profit.

Plus, Market Share has little correlation with innovation or product quality. In fact, Innovator's Dilemma presents a compelling case of the exact opposite.

So, exactly which "war" are you referring to?

"Apple already lost to Android. Last count, Android had 80% of the market."

Everyone throws this out there, but phones running 2.3 that cost less than $100 are practically a different product than what Apple and Samsung are offering, which is where the true battle is. Over 1/3 of all Androids run 2.3:

http://www.ibtimes.com/android-vs-ios-adoption-rates-jelly-b...

A 2.3 Phone will run almost every existing Android app out there. In fact, most Android apps target 2.2 and up.

Which shows how backwards the platform is.

yeah, how dare they allow people to have a useful phone for several years at a time.

What? It's the very inverse: they DONT allow people to have a useful phone for several years at a time, they saddle them with an osbolete OS and don't provide upgrades.

It's a very big pain point that Android makers don't provide upgrades for their older devices (even 1 year old ones). For some models they don't provide upgrades AT ALL, and you have to get custom-install on them to have a new Android.

That's why (Google's own numbers) older (by up to 3 years) Android releases amount to 60%+ of the CURRENT installed base, whereas on iOS over 80% of users update on the latest version on the very first month of its release.

I don't think this is an Android issue, but with the carriers, and to a lesser degree, the handset makers.

If it gets down to the users, then it is an Android issue. After all, the Android maker choose to have this kind of collaboration and enable the carriers to do this.

Most of the phones running 2.3 aren't shipping with Google Play (is Play even compatible?), so there isn't the integrated app marketplace that defines the modern smartphone experience.

These are drastically underpowered devices. Even if an app can run on 2.2, it doesn't mean it'll run well (or at all) on sub-$100 hardware.

Mini is 2.3 and uses Google Play.

"Most of the phones running 2.3 aren't shipping with Google Play (is Play even compatible?)"

This is wrong, Google Play is compatible with every Android device. (link: http://source.android.com/compatibility/)

I don't know where you got this information from, but I can assure you that 99,9999% of all Android devices you'll find outside of China will have Google Play on it.

"These are drastically underpowered devices. Even if an app can run on 2.2, it doesn't mean it'll run well (or at all) on sub-$100 hardware."

Drastically underpowered like an iPhone4/4S? Most 2.2 - 2.3.3 devices out there are just 1-2 year old phones, so of course they are underpowered compared to todays standards.

Still, most apps will run on those devices the same way they still run on an iPhone4/4S - in a few cases slow, but still usable for the mayority of consumers.

I think Amazon devices comprise more than 0.0001% of non Chinese devices. OK not exactly Android.

Like you said, Amazon devices are not Android, even though they are architecturally very close.

Stop and read my grandparent post. 99,9999% of all Android devices you'll find outside of China - yes, but I was referring to phones in places like China.

Drastically underpowered like an iPhone4/4S? Obviously you're so hyped up by your anti-Apple venom that you failed to read my original post, so all is forgiven. No, think underpowered like an original iPhone - if that powerful.

My original point: there's tons of phones out there that aren't even remotely in the same category as the market that Apple and Samsung are selling to. Yet, those numbers keep getting included in the discussions about the Android install base. Samsung and other mid-to-high end Android makers are killing it; there's no need to be intellectually dishonest by including number that are irrelevant to their market.

All phones running 2.3. are Google Play capable. The lack of Google Play on some phones is due to manufacturers not certifying with Google.

In my country 90% of smartphones ship with Android, so I've seen a lot of 2.3. devices (I own one).

They are usually NOT underpowered (exception: the Galaxy Mini I certainly is, and it's the "free" smartphone over here), the user experience is quite good, usually better than an old iPhone.

I have a Galaxy Ace (which I don't like), my girlfriend has a Mini 2 (extremely good value for money), coworkers have Motorola Defy, Defy+, LG P880 4x, Galaxy S Advance, SII, SIII, SIV, Sony phones... all work reasonably well, I'd pick any of them over an old iPhone (and the LG and SIV over the latest iPhone).

Sub U$ 100 phones sold here all have Google Play btw.

Yes, truly a great time to be an Android developer...

Thank you for sharing this enormously important insight. I'd bet you had to think hard to come up with that one.

Btw: I am an Android developer having a truly great time with this and other platforms.

Yes, and that point drove my decision to buy my now 2 year old Samsung Ace. It was a 2.3 device, thus it will run most apps without any issues. What I found later was that a particular hardware spec would really annoy me to the point that I couldn't install any more apps, and it's probably an issue that many low end phone users face: small internal memory. Hey, the phone has only 128Mb of memory for apps. The problem is not when you want to install new stuff, but the natural process of updating existing (default) apps like YouTube and Maps. When I run out of memory I have to reset the phone and start over. I'm thinking about buying a new phone just to get rid of this annoying thing.

If it has an SD card slot, you can fix this problem by rooting the phone and installing a custom ROM that lets you force apps to be stored to the card. That's what I would do. In the process you would even get to have a 4.1 or so version of Android.

> installing a custom ROM that lets you force apps to be stored to the card

I almost tried that, but stopped when I read in the custom ROM page that in some cases it could brick the phone. Since my phone is a "branched" version of the standard Ace I decided not to take the risk.

yes, firmware upgrading has a chance it will brick the phone. That didn't stop me doing it 10 times, after the nerves of the 1st time go away it's easy.

What do you mean "branched" version of Ace? nothing comes up on google :s

I mean a different sub-model (I guess...). Mine is a GT-s5830 instead of a s5830. All of the ROM updates I found made reference to the latter only so, again, I decided to not take any chances while it is my primary phone. By the time I buy a new phone, I'll sure update the old one and see how it goes.

AFAIK "GT-" is just the Samsung prefix. My S3 is a GT-i9300.

I have an Ace too (180 mb internal memory), and it's an extremely annoying problem.

Only a very few low end phones made that braindead decision - my girlfriend has a cheaper Mini 2 and it has 1 GB of memory for apps.

You can install apps on the SD, but they still take a little of those valuable megabytes. The only apps I have on the internal memory are Gmail, Maps, Facebook and Youtube (plus Play Services). Several apps can be moved to the SD (Opera Mobile, most games, MX media player, Adobe Reader, so I manage.

Which is a problem. There are a lot of things that have changed between 4.0 and 2.3, and it would make most developers lives easier if 2.3 would go away.

> Apple already lost to Android.

That's not true. Apple's mobile devices are more profitable than any single line of Android devices. Also, sales of the iPad vs any other line of Android tablets, ie. Samsung's are not even close.

Your comparison is no different than comparing Windows Server vs Linux servers. Yes, it might have hurt the market for WinServer a little bit (and Apple's iOS devices), but it's not like anyone is making a killing off of all those Linux/Android powered devices out there.

When comparing what Android itself as a free platform (mostly free, there are contracts for Google's services that most sign onto)- iOS is far more profitable for Apple than Android is for Google.

What you're repeating is common man nonsense.

Secondly, FirefoxOS and Ubuntu Mobile will be cheaper devices and likely only cut into Android's marketshare. Add in Tizen, which is being specifically created to STOP paying fees to Google for Android, and you will see your 'zero chance' of Android's 80% marketshare changing. And sooner than you believe.

Android has the most precarious position as a 'free' choice. There are many more entrants on the way for the cheap market.

The war is just getting started, and I'd rather be in Apple's shoes than Google's (but you act as if Google cares about Android, they don't- it's just a delivery mechanism for their services).

Signed by someone who uses a GS3.

>Your comparison is no different than comparing Windows Server vs Linux servers.

I think a better comparison is Mac vs. Windows. Windows won, but Macs are still thriving, and Apple is making nice margins. This is how I see iOS vs. Android playing out.

Perhaps, but the difference here is that Macs are still better machines in most respects. Macs endure as a niche product because they're higher quality products.

Premium Android phones, on the other hand, provide a user experience that a lot of people consider superior.

Some people prefer Windows to Mac OS, too, so I really don't see your point.

Not really sure how I can make this point more simply. In order to survive as a niche product you have to offer a significantly better or at least different experience. I'm sitting here right now in a coworking space in Vietnam full of developers. Ratio of MacBooks to PCs is about 15:1, which is pretty typical for any group of technical people I've been around.

> In order to survive as a niche product you have to offer a significantly better or at least different experience

Like Gentoo

I always saw Apple products as a niche for people who like Apple's aesthetic. This turf war was tiring when Apple had an almost credible claim to technical superiority and I had to listen to Apple PC users rant and rave. Nowadays it's a lot more fun with Google, Microsoft, and their partners making Apple and its supporters wince.

I develop on google's CR-48, by using ssh and remoting into linux servers. (trick: use ctrl+alt+o to save buffer in nano in ssh, because ctrl+o launches chrome open file dialog)

The CR-48 has 8-9 hours of battery life.

Also, if someone steals my laptop, I can replace it with this ( https://play.google.com/store/devices/details?id=chromebook_... ) and lose nothing, since the passwords/ip addresses/etc are not stored on the machines, and no code is stored on the machine.

Actually, it's very similar to the laptop market. A lot of people prefer Windows or Linux on Lenovo laptops, because they have some features that Macs don't have.

Likewise, if you compare the hardware (build quality etc) I think most people would agree that Apple still is has the best devices compared to Samsung, which still uses the same plastic frame even on high end phones.

I'm not sure that "plastic" is as bad as popular opinion thinks it is in the case of something the size of a phone.

If we say "polymer" does it sound any better? I mean there's plastic.. and then there's plastic.

I agree. I don't see any good reason for this worship of metal. I have a phone with a colored polycarbonate body: so if it scratches, its still the same color. And it looks much better and feels better than the Iphone

The only iPhone that really show scratches is the black iPhone 5. That said, I agree that hard polycarbonate plastic also has a good quality feel. Unfortunately, most phones made with plastic don't use hard polycarbonate, but soft plastic with sqeaking, bending battery covers etc.

Of course, it's not necessarily bad, and there's different types of plastic. Some kinds are very rugged.

However, most plastic phones are made of plastic because it's a cheap material that doesn't require much in the way of precision to fit together, and it just doesn't have the same kind of quality (or even quality feel) as a phone made with a different material.

I was thinking that 'metal is better' myself.. as I enjoyed the heft and solid feel of my Motorola Droid.

Then I got a Galaxy Nexus and revised my opinion on plastic phones entirely, it feels good in hand and has ruggedly endured all kinds of accidental abuse at my hands.

That argument is stupid. Please give a source for "a lot of people" considering it superior. A lot of people I know consider the iPhone/Apple ecosystem superior. And no, you can't use market share to back this up, as much as you might want to. Because that doesn't measure user experiences being considered superior. There's a lot more factors that go into market share; that's just one of them.

It's not stupid. He just said what he knows anectodically, and I can confirm from many discussions I had.

As a data point just take the number of people who chose Samsung Galaxy S4 or HTC One over iPhone, even though they cost more less the same.

As I said, market share is not an appropriate measure of a user experience people consider superior. People's choices of a Galaxy S4/HTC One over an iPhone could be caused by liking the Android UX more, but there's also many other reasons for it (friends like it more, already in Google ecosystem, upgrading from previous phone, etc). There's many possible reasons for one person choosing one phone over the other, and, while UX could be one of them, it's not the only one.

And anecdotes shouldn't be purported as facts.

Samsung now rates higher than iPhone for user satisfaction:

http://www.pcmag.com/article2/0,2817,2422525,00.asp

http://www.computerworld.com/s/article/9241257/Samsung_smart...

Motorola and HTC too:

http://fr.slideshare.net/OnDevice/us-uk-device-satisfaction

Slides 6 (for US) and 9 for (UK)

A data point worth considering is: a larger percentage of Android users switch to iPhone than vice-versa.

> but it's not like anyone is making a killing off of all those Linux/Android powered devices out there.

Except the users. Users win big time when there's an effective open source option for them to choose.

Not really, users don't care about open source. Users care about apps and services. Most developers care about the platform with more users that are willing to spend money on apps and services. I'm not saying that there are no open source fans, just that this is not what brings the food on your plate at the end of the month.

I think grandparent meant that users win out because open source almost guarantees that software stack will survive any hardships that mother company might not survive, as well as extra competition from open source alternatives.

Who cares about that when it comes to phones, though?

I'm not sure what you're trying to get at. The users 'care' even if they don't realize it. Developers care because they can continue to target a platform that they are familiar with and which has been tested well.

Sure, that gives a platform a certain level of inertia, but I don't know how much it matters. Developers will go where the users are. It's not like in the PC space where Windows managed to really entrench itself based on compatibility with mission critical apps. Who cares if closed-source means you have to get a new Twitter client?

Um, no. See under Linux Desktop. Big fail, over all these years, even if it's more capable of Windows. It's more capable of Mac, too, and guess what most nerdy types with enough money buys?

Users don't give a damn about Open Source. They don't even know what Open Source is (just ask some average teen girl with Android phone what she thinks about Android openness). What they want is an acceptable shiny device that does things. Samsung provides that. Apple provides that.

Even if users don't care about Open Source, Linux being available for people to run cheap, secure, reliable servers have been a huge win for users as it has been a catalyst for the web.

Similarly, having the Android source code available has increased the amount of handset manufacturers who choose to use it and increasing competition, putting on downward price pressure.

Maybe he's right? I wonder how many Raspberry Pi's would've sold at $150.00/ea with WinCE included? /sarcasm

Samsung's line of Android devices became more profitable than Apple's iPhones at some point during, or just before this quarter (it's a bit vague because it's all based on estimates but it's basically happened already, we'll get the analyst estimates based on corporate announcements about a month after the end of the quarter).

Some would consider that "making a killing".

This was based on the Strategy Analytics report? That was a little dubious, as it was based on saying that (a) half of Apple's profits are from the iPhone and (b) Samsung makes no profit on its desktop, laptop or tablet divisions at all. There was also some confusion over net vs gross.

If you don't like that report you can check out two others that are provided by sources that most would describe as "rabidly pro-Apple". The trend is pretty clear and has been for a while so I'm not sure why everyone seems so suprised by this. Though given Apple's yearly cycle which has a slump in Q3 and a big spike in Q4 they may briefly reclaim the crown in Q4 if their next launch does well.

Strategy Analytics: http://bgr.com/2013/07/26/samsung-smartphone-profits-q2-2013...

Canaccord Genuity: http://appleinsider.com/articles/13/07/31/apple-takes-53-of-...

Asymco: http://www.asymco.com/2013/08/21/amp-index-update/

They're all for the quarter that ended two months ago and say (Samsung-Apple) 53%-47%, 50-53% and 43%-57% respectively and they were all at more like 15-80% two years ago.

Not sure how you're getting that from the Asymco one... The Canaccord one does seem to note that Samsung's "handset" division incorporates tablets and PCs, and that their estimate for the iPhone's share of Apple's profits is fuzzy (we know Apple's revenue per division, but not profit; Strategy Analytics and Canaccord seem to have decided that profit per division is proportional to revenue, which is a bit of a leap...)

Everyone seems to have real difficulty reading the Asymco one, and to be fair his graphs are typically abysmal.

What seems to trip people up with this one is that the profit share "line" is an average over the last 4 quarters, which since the two number are moving quickly in opposite directions adds lag, the actual estimate for the quarter is a purple dot.

But even with that lag, the trend is fairly hard to miss (people do seem prepared to put that effort in though).

It depends on how you define "winning". I would say that Google won - their goal was to get as many devices as possible using Google as their default search engine and running the Google suite of apps.

A few years ago there was a real risk that Apple would start dropping Google services (ref Apple Maps). Fortunately for Google, iCloud is a mess and Apple is so far away from Google in the services-game that it's not even funny.

Then they have the added hedge of Android which they have full control over.

Basically, Google already has Apple by the balls. In a power struggle between the two, Google will come out on top. Android is certainly an important piece to this puzzle, but saying that Android is "winning/losing" is framing the problem incorrectly.

>Apple already lost to Android. Last count, Android had 80% of the market.

That's like suggesting that Mercedes Benz have lost already to Ford because they have smaller market share. Apple produce a premium product with prices and margins that reflect that. Of course they would prefer dominant market share, as would Mercedes. But a non-majority share does not imply that they've somehow lost.

The car analogy gets trotted out over and over again when talking about smart phone market share but it really doesn't work at all. Smart phone ecosystems have powerful network effects that just don't exist for most luxury goods.

Ok, then go by profit.

Samsung is very quickly closing that gap. This is likely to snowball if iOS's share starts dipping into single digits.

Maybe a better example is the PC market, where Apple also has a small market share but huge profits?

Sure. This analogy I can buy and this seems to be where Apple is headed right now.

Good point. Which ecosystem seems to be stronger again?

It's like mercedes, only mercedes also gets to drive on nicer roads that go more places.

When market share translates to usage and developer revenue, as it may some day, this will change. But network effects scarcely reinforce your point.

Every single indicator is trending away from Apple here, from number of app downloads, to overall revenue, to revenue per-app. It's still in Apple's favor, but the gap is narrowing quickly. I've seen a very dramatic change in the attention devs feel they have to give Android even in just the last year.

Maybe this won't continue but if you're skating to where the puck will be then it doesn't look so much like Apple right now.

http://blog.appannie.com/app-annie-index-market-q2-2013/

That's like suggesting that Mercedes Benz have lost already to Ford because they have smaller market share.

Which they have, when you're talking about market share. There's some cognitive dissonance going on here- Windows Phone can't succeed because it has a low market share. But Apple succeeds because it has a low market share.

Basically, if low market share isn't a problem for Apple, there's no reason why it would be a problem for MS.

Apple didn't always have a low market share and built up a huge importance for developers before their share started to slide.

There are still millions of iPhones sold every year, even if they're a smaller piece of the overall pie.

Contrast to Windows Phone which never had any kind of market share or importance, and has to fight up from absolutely nothing.

That's the difference between iPhone's small market share and WP's small share.

Actually, Apple's share of the mobile phone market is still growing, as it has been since 2007. It just isn't growing as fast as Android's.

Market share vs units sold. One is sliding down (market share) while units sold are still going up as the pie gets larger.

I'd say the difference is that Apple's share, while smaller than Android, is still large. Apple is selling huge quantities of devices and making huge quantities of cash from it. Windows Phone is doing neither.

So Microsoft has lost the PC to Apple because of the manufacturer fragmentation in Windows PCs? Yeah, that makes sense.

>Apple already lost to Android. Last count, Android had 80% of the market.

Yes. The low-margin 80% of the market that makes few profits. Apple makes as much revenue/profits from it's 20% share as the rest of the 80% Android OEMS combined (namely, Samsung).

>There is zero chance of that changing anytime soon.

That's great, because who would really want the 80%, low margin market segment?

If it'll play like the PC Market (where Apple makes more money that the rest 4 top PC makers), then Android will be like Windows all over again. Dell, anyone?

To put some figures on this -

Global operating profits in the smartphone market for the second quarter of 2013:

Apple - 53% (shipped 31.2M smartphones)

Samsung - 50% (shipped 72.5M smartphones)

All Others - negative 3% (operating losses)

> This new arrangement changes essentially nothing, but makes official what people long assumed

Precisely! There is no "new" move here. This was just the next step in a series of moves that have already been in motion.

I am curious as to how this will affect Microsoft's relationships with Samsung, HTC, and others.

This does open the door to more hardware options for them which could integrate with their other devices e.g. Kinect, One, potentially any PC running Windows, etc.

I remember Bill Gates talking about Microsoft research in pervasive computing. I imagine Microsoft may be trying to use Nokia's solid hardware business to start delivering 'pervasive' devices/services.

I don't think Samsung and HTC (what others?) have a serious relationship with Microsoft. IMHO, they just made 1-2 phones to test the water and keep some expertise inhouse and handy in case they wanted to put more focus on it. I think not much will change.

WP8 suffers more from a perception problem than anything else. I just switched from android to wp8 and the way i see it i got the smooth interaction and ease of use of iOS at the price point of android. The US market is a special beast because the subsidies erase most of the price difference, but in markets where people buy unlocked I think WP8 can take a lot of market share away from android by virtue of its better experience at the same price. The apps are a red herring. The Nokia devices ship with so much out of the box functionality that most people probably won't even install any.

>The Nokia devices ship with so much out of the box functionality that most people probably won't even install any

if this is true, WP8 is just a feature phone with lots of features. if people are not installing apps then the developers wont build apps.

I agree with this.

I switched to windows 8 from Android and suddenly I realised this is underrated. OS is well build but suffers a lot because of perception. Apps are limited of course but there is a great potential.

A developer build a cool Instagram client for windows phone called 6tag. In 1-2days he got 2 million downloads, not to mention you have to pay to remove ads & upload more than 1 video. The ux is really cool too.

Less price, even. I love Android, but compared to its competitors it's a system-requirements beast. No other platform needs a quad-core processor to get a pleasant user experience.

WP8 phones giving users better performance for less money will make Android feel clunky.

For example, you can buy a Nokia 520 for $100 without contract. You get a well-built phone. Add a 64gb Micro SD and you have a very capable device. You can download worldwide HERE maps on it for offline navigation, for free. Or use it as a music device with one of the available Music services.

And you can expect it to be updated for one or two versions of WP ahead.

I'd say Windows Phone is a much better value than people know, and for most people, better value than Android.

about a company that went from hero to zero largely at the hands of Android (RIM being another example).

I think iOS had a lot more to do with Nokia's decline than Android. iOS came first and dominated the high end of mobile phones for years, displacing Nokia in that niche, and then Android also undermined them, but it was hardly all down to Android. Nokia used to sell a lot of high end phones, which they made money on, as well as dominating the low-end.

I think Nokia had more to do with Nokia's decline than iOS or Android. They had the hardware and software to do what Apple and Palm did at least a full generation before iPhone 1.

The Nokia n95 was announced in September 2006 and available in March 2007. Its ad slogan was "It's what computers have become."[0] What stands out in the second paragraph of the article where they highlight the capabilities is "the ability to install and run third party Java ME or Symbian mobile applications".

By contrast, the iPhone was decidedly not a computer. Not in the traditional sense. It is apparent in hindsight that people don't care about the downsides of being inside a walled garden.

[0] https://en.wikipedia.org/wiki/Nokia_N95

I'd argue that the N770 in 2005 was even more interesting. Less polished as a product overall, but if they'd just slapped a phone in it...

Or in general would've sticked with Maemo (Meego, Sailfish, whatever it was called in-between). I loved my 'Internet Tablet'.

I had the 7650 in 2004. It had third party apps and I believe it was the first camera phone also. I was a die-hard Nokia fan, even purchasing a full-price N97 before jumping ship to Android in 2010

The N95 had a decidedly subpar user experience. The OS was slow, unstable and clearly long past its use-by date and the available apps were with few exceptions really crappy lowest-common denominator stuff.

I say this as a one-time Nokia N95 owner (and long-time Nokia smartphone owner) who moved to an iPhone and found it a revelation. Nokia were ridiculously far behind at that point, the N95 was their best effort and it was one of the most frustrating phones I've ever used.

they subsequently came out with the n96 which is a great phone.

By the way I still use an n95. It's great because it's a smart phone but not considered a smart phone by att so I dont get charged data. I can use wifi anywhere. It is a bit slow though.

> It is apparent in hindsight that people don't care about the downsides of being inside a walled garden

There's a danger in repeating such things as if they are facts, as the people that matter (e.g. developers, investors) start actually believing them. It's bullshit of course, but I don't blame you for being intoxicated by such propaganda.

When the iPhone was released, its success had much to do with it feeling like a portable computer that's polished instead of feeling like an expensive and failed experiment that was pushed on the market for the punishment and torturing of early adopters (like all the other phones before it, with the possible exception of Blackberries that I never tried). The iPhone for example was the first phone I used with a usable browser and a usable email client, two extremely critical pieces of functionality that every other phone maker was failing to deliver.

But living in a technological bubble, such as it happens when living in a place such as San Francisco where you see MacBooks and iPads everywhere, does tend to distort reality.

Fact of the matter is, customers don't care about walled gardens as long as they don't feel the walls. Take away some freedom they care about or show them what openness can do and they'll instantly reconsider their choices.

Example:

I went from an iPhone 3GS to an Android because of 3 things - I couldn't block calls and SMS messages coming from some annoying numbers (Apple was banning such apps from iOS) + I couldn't do Wifi tethering with my iPhone because the capability was disabled by my career + uploading music on it wasn't as easy as simply connecting the phone through USB and copy/pasting files. Nowadays I have other reasons too, including the fact that iOS does not allow Firefox. And I also remember fondly when Google Voice was rejected back in 2009, because it "duplicated existing functionality".

I later explained my reasoning to two other non-technical folks, showing them what my Android could do that their device couldn't. They are now Android users. And I can probably convince more people of how dumb and locked down their expensive gadget is, if I cared enough, but I don't because Android is number 1 without my help and openness had everything to do with it (being a doubly edged sword no doubt, since open also means open for careers and phone makers).

Anecdotal but I know a surprising amount of technically illiterate (perhaps too mean) people with jailbroke iphones.

One guy doesn't even have an email address.

Oh, the N95. The worst phone I have ever used, ever. The specs were amazing, but it could barely make a phone call! Total rubbish.

Nokia didn't have the software, that was the problem. Symbian was as dead-end of a technology as classic Mac OS was.

After the iPhone was released, Nokia scrambled around with a number of different alternative operating systems because they knew they didn't have the software. Unfortunately, they didn't commit to the future. By the time Elop came in and committed to Windows Phone, it was already far too late.

They didn't have the software or the hardware figured out. Before the iPhone came out, Nokia has 40+ phone models that were barely different. It was like they took every permutation of hardware options and created a new device. It was so refreshing when Apple came out with 1 device and it was better than all of Nokia's combined.

That's exactly it. They clearly had the capability (well... the software side's arguable, but at least they shipped), just no coherent direction. They were floundering about, wasting the clear lead they had, for a good 8 or 9 years.

Nokia is an excellent company and they built the best mobile phones before the smartphone craze. Just as a testament to how good they are there are still pre-smarphone craze Nokia phones available and their probably the best choice if you tend to drop your phones very often or get mad easily and like to trow them to relieve some anger.

I was very disappointed when they choose to sell their new Lumia phones with windows. I would have bought a Nokia with Android in a heartbeat but the fact that they choose Microsoft made me think twice and I eventually went with Samsung.

I just hope Microsoft doesn't ruin Nokia they're still one of the better hardware manufacturers unfortunately they were never very good at software.

The fact that a lot of people would have bought the phone doesn't mean it would result in profit. Lots of people by HTC phones, but that company is circling the drain. The problem is that an Android phone is a commodity. Its hard to differentiate yourself on the product side. That means you're in extreme price/specs competition. That drives profits towards zero, just as they are on other commodity platforms like the PC (Acer and Lenovo, for example, have abysmal margins). With Windows phone, Microsoft mostly keeps the spec war in check, and WP8 runs fine on 1G/dual 1.5 Ghz on a "flagship" phone.

What would you choose: small profits, or no customers? That's the choice.

Android was "IBM PC trick", and competititors trying to preserve high margins and differentiate their products will end like Amiga, Commodore or Atari.

Or, they'll end up like Apple

Apple's position depends on no one undercutting them with a phone that has equal or greater polish and a lower price point.

It still baffles me that it's so hard for anyone other than Apple to make a single well-polished device, all the way through. If someone gets the casing right, they'll still mess up UI transitions that are meant to be seamless, create laggy or inaccurate touch input, fail to run at 60 or 30 fps, or make hilariously ill-informed UI decisions in the most frequently used apps (clock, settings, camera, ...). What's the explanation for this phenomenon?

I think this is what Microsoft is trying to do by buying Nokia. It does fit with the Surface, which seems to have spurred OEMs to do a little better. It's hard for Microsoft to go to an OEM and critique the way they implement Windows without a functional example.

I think culture is a big part of it and promoting the right people. Most companies when it becomes the size of apple are riddled with politics and the people on the top get there not because they create/design great products but know how to play the "game".

One thing that strikes me about apple is their culture of secrecy. There are departments within the same company that are not allowed to talk to one another. When you have no idea what other people are doing, it's very hard to play politics and the only thing you can do is just do great work.

Apple barely survived nineties selling their niche desktop computers. Then miracles happened and they invented a few new markets from scratch.

What would you choose: small profits, or no customers? That's the choice.

Of course it isn't. What about "the potential for a great deal of customers"? I'm certainly not suggesting that MS has executed on this, but they're in the best position out of any second-tier OS. They have huge resources, the Xbox, a music subscription service, the whole suite of Live services, Office...

Like I said, they haven't exactly been successful despite these advantages. But if I were a failing handset manufacturer that had to tie myself to one available ship...

Windows Phone is in second place in Latin America now. I wouldn't say "no customers" so quick.

Again, it is not important if is 30-40-50-whatever% in a single country, worldwide it is still about 3%

That seems rather shortsighted. Its not immediately important, but if Microsoft can establish and dominate in the Latin American market, then when that market begins to bring all of their citizens into the smartphone era (they're moving rapidly this way), Microsoft will be well positioned.

In fact, were they clever, MS would position themselves well in all of the non-1st-world markets (Indian sub-continent, Central America, South America, Africa, Asia). Its like playing Risk, they've got America, Europe, and Australia, but you can still hold on with the others.

I would have thought what is more important than market share in the developed world is good market share in the emerging economies like Latin America.

That would offer more scope for growth.

Strangely every report I see of this (also in e.g. Vietnam) stresses that it's due to the strength of the Nokia brand in these regions. A brand that Microsoft apparently didn't buy the rights to for use on smartphones.

MS did "buy" the brand for this use; for two years.

Are you sure? I've read that old-Nokia is banned for two years from releasing phones with that brand but Microsoft-Nokia will not release any more smartphones with the Nokia name.

e.g. http://allthingsd.com/20130903/microsoft-deal-could-mean-end...

"But when it comes to smartphones, Microsoft only has the right to use the Nokia name on Windows Phones that are in the market when the deal closes"

The problem is that an Android phone is a commodity.

All phones are commodities. Going with Windows Phone just meant that they were a commodity with an incompatible OS.

Exactly, smartphones were relatively rare before 2005 or so, but even before the iphone there were a lot of people with symbian, BBs and treos, and now dumbphones are mostly of the disposable kind.

>>>> Exactly, smartphones were relatively rare before 2005

Actually DoComo pretty much made the smartphone what it is today. Japan was selling "smartphones" way back in 2001. It was the incredible revenues they generated that got the attention of US carriers.

http://news.bbc.co.uk/2/hi/business/1835821.stm

That's one country, out of the entire world.

Smartphones were less rare in Europe before 2005, but still there.

You are misunderstanding his use of the word commodity and hence his point. He is using commodity in the sense that to satisfy the demand of the item the manufacturer is irrelevant to the buyer. Clearly not all phones as commodities. An iPhone is not the same as a Chinese knockoff.

The Op is using commodity in the sense that wood is a commodity.

Now anyone can grow wood, but the big money is turning that wood into furniture and that takes a skilled carpenter.

I think WP8 is ok. The biggest challenge is the image of Microsoft. In the hands of Apple, WP8 would be lauded insanely great too. The next CEO of Microsoft has to repair this image, and give Microsoft a new reason to be cool again.

Agreed re: Samsung. With this new acquisition, Microsoft now has the ability to control the entire mobile phone experience -- something Apple has had huge success doing for years now. They'll have a high-quality platform to promote their app store and create an interesting ecosystem. This'll also create a distinct image in consumer's minds of what the Microsoft Phone is, similar to what we imagine when we think of the Apple iPhone. Google doesn't have that control, and that puts them at a disadvantage. If I were Google, I would be looking for ways to create a very clear image of what it means to be using a Google Phone that doesn't include X number of vendor handsets running X^^2 versions of Android.

Google has Motorola and the Nexus line. As for Microsoft, their spectacular failure with the Surface suggests that having control of both hardware and software does not necessarily result in success.

The Nexus line is in no way establishing a cohesive Google experience. Most opt for Samsung or HTC. Regarding the Surface: you're right, it flopped. Difference here is that Microsoft is bringing in the talent, experience, and quality product to make a more serious attempt at mobile.

Most opt for Samsung or HTC

...but that's price fragmentation, not a commentary on the 'cohesiveness' of the Nexus 4, which is a brilliant device.

It's a commentary on the fragmented nature of the Google mobile experience.

'The' Google mobile experience is surely the Nexus line? Opting out of it doesn't fragment it, it simply makes it more niche. Is your argument not similar to saying iOS is fragmented because most people opt for Android?

Microsoft has already done that end-to-end experience thing with Surface and that didn't turn out all that well. Windows phone has been critically acclaimed but that hasn't really made much dent on the IPhone/Android duopoly. And the relatively more successful windows phone devices aren't exactly sub-standard, infact they are quite high quality handsets made by the same manufacturer they just acquired. I'm doubtful how much of incremental improvement end-to-end will do this case.

Surface was a failure in marketing, not the devices themselves (okay, Surface RT was pretty bad). The hardware is great, and people love it, and the Surface Pro is really useful for students and even small time developers, and people generally really love it after playing with one.

For Surface, in my opinion, it was an UI which looked nothing like what people expect from "Windows" (not saying it was bad) combined with hardware that was not appealing in terms of specs vs price. So I don't think the hardware is that great. E.g. 64 GB Surface Pro is now selling for around 900 USD; after deducing space taken by OS, the free space is literally an insult considering the price. If you sell it to me as a full computer, the specs just don't stack up. If you sell it to me as a tablet, it is way too pricey when I can get a significant portion of functionality from a more portable Galaxy-class tablet at a much lower price point. Not sure if marketing can fix this.

You missed a critical issue. Carriers don't like fully controlled verticals like Apple, as they don't want to compete on a fair battle ground. Apple is too powerful in US today, but no carrier wants another Apple. Several friends from Microsoft said this over past couple of years.

Another issue is Microsoft does not have profitable consumer services other than Xbox. Even Microsoft can integrate a lot of its services with Windows Phone, it is a big money sink until Microsoft can make profit on search, maps, outlook.com, skydrive, etc. They have tried for over a decade by now.

In the end, I really like to see 3-way competition between Apple, Google, Microsoft.

This is exactly the issue. And not only in the US, but elsewhere as well. In my country, you pretty much never see operators promote the iPhone, but you see constant TV advertising for Android phones. Carriers only carry the iPhone because they have to in order to not lose customers.

The only way for Microsoft to entice carriers is to bend over backwards with deals, promotions and letting them customize the phone. Which was exactly what Microsoft was trying to avoid by copying the "we're calling the shots" way of Apple.

The other option, of course, is to make a phone that is so desirable that customers will start demanding it. So far, WP8 is not that phone. Partly because it's _not_ so much better than iPhone or Android, and partly, perhaps, because people's not so positive association with the Windows brand ("isn't that the thing that always needs updating?").

No, a great move would have been for Microsoft to purchase RIM/BlackBerry three or four years ago, and focus on the corporate sector. They could have had the best information security story in the industry. They could have had the ultimate Exchange email experience.

Together, these companies would have had a serious chance at being the indisputable third platform.

On their own, they came up with a dozen incompatible variants of Windows Mobile, and PlayBook. Now both companies and both platforms are teetering on the edge of oblivion.

Yes, a brilliant strategy to have an aging company buy a device maker that markets to an aging customer base.

At least RIM had a smartphone customer base to buy.

No, it would have been brilliant. Microsoft is horrible at personal interfaces and trying to deal with actual people. But they are wonderful at enterprise. If either Microsoft or RIM had been able to say "Fine, we'll let Apple and Google play with their fancy new devices - we'll make products that let people actually get work done" that would have been a brilliant strategy. They could have completely dominated corporate mobile for years to come and put off the entire BYOD movement for a few years.

As it is, they each wanted to play the same game as Apple and Google, and that has failed dramatically for both. If they had decided to play a different game entirely, they would have been formidable.

BYOD wouldn't have changed much. The entire reason this is happening is because people like consumer-centric products above enterprise-grade products. They work better for people vs working better for enterprises, which is what Microsoft+RIM would have focused on. It doesn't matter how many enterprise features a phone has, if people don't like using it, it won't be used.

I think it would have pushed BYOD back a couple of years. I think that iPhone started the trend when people started migrating away from Blackberries. If there was a serious contender from Microsoft/RIM for a corporate smartphone, then that would have held it back for a year or two. At least until the iPad rolled around. I think that regardless of what a combined Microsoft/RIM had come out with, that the iPad would have still driven BYOD to the point where it is today.

Back when Blackberry was king, quite a few people carried a phone that was provided / paid for by their company, and they didn't have a personal phone. This is because cell phones / plans were expensive (remember 45 cents per minute?). Then, once the family plans started to become popular (it took a while, as it had to wait for people with company-provided phones to switch jobs to a company that didn't provide phones), more companies started to switch to BYOD. And I don't know about anyone else, but once I was able to choose my own device, it WAS NOT going to be a limited functionality stripped down corporate phone.

And better still the device you’re buying doesn't even run the Windows Phone OS.

I guess it would depend on who you are securing the information from, Skype being an obvious example of a formerly secure service that is now owned by Microsoft.

BYOD. There is no corporate market for smartphones anymore.

Most execs want iPhones or similar.

According to Bloomberg TV, Elop is returning to Microsoft, and Siilasmaa will serve as Nokia's interim CEO.

My guess is that Elop will become MS CEO, and is not a bad choice. In his interviews, he comes across as someone really smart and eloquent. He is one of the few CEOs in the world with both enterprise and consumer experience that a future MS CEO badly needs.

In which case, for Elop, running Nokia really was the trial run that everyone feared it was when he started. The end-game was for him to be in position to take over Microsoft when Balmer stepped down. I guess he passed Microsoft's test then...

Nokia's board is the one that hired Elop away from Microsoft and was behind his every major decision. So I think the plans were set in motion at Nokia before Elop was even hired.

Read up this guy's profile, do you really think he would approve hiring Elop just like that without such an eventuality in sight?

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

Oh, no, I agree... this was all set in motion years ago, and it's all now coming to fruition. I just remember thinking at the time that this all seemed a little too pre-planned. I'm just amazed that it really seems to be happening as expected. Nokia's board knew that this was a very real possibility when Elop was hired.

The real question will be what Elop's role back in Microsoft will be. If he ends up succeeding Balmer, everything that was predicted 3 years ago will end up coming true. I thought it was far-fetched that Nokia was really just the warm-up act to taking over Microsoft. But if that is really what happens, it was certainly foreseeable.

> I hope this portends a Microsoft phone...

I'm wondering, how can anyone buy and use a Microsoft phone, when we've learned that they partner with the NSA, killing our privacy?

Google does the same and their phones seems to be selling quite well.

Exactly.

And Apple too.

But we have 2 alternatives now (and they are even open-source!):

1. Ubuntu: http://www.ubuntu.com/phone

2. FirefoxOS: http://www.mozilla.org/en-US/firefox/os/

So why does it look like everyone's already back to "whatever!"-mode as far as your right to privacy is concerned?

You forgot

3. Jolla http://jolla.com/

where (at least an earlier version of) the OS was actually shipped on a decent phone, the – Nokia – N9.

Out of curiosity, what are you using as your main phone? The not-yet-existing Ubuntu one, one of the two just-released-still-very-beta-and-low-spec FFOS devices, a closed source Blackberry/feature/dumb phone, or one of the three big names (MS/Apple/Google) you're criticizing?

Samsung Galaxy Nexus.

Everything you need already works just fine (and perfection will be there very soon).

If you need to know precisely about the current status:

- The most official phones: https://docs.google.com/spreadsheet/ccc?key=0ArLs7UPtu-hJdDZ...

- The entire list (including the "unofficial" ones): https://wiki.ubuntu.com/Touch/Devices

You mean Galaxy Nexus running Ubuntu?

And pray tell, which carrier are you using that refuses lawful intercept warrants?

Apparently there's no money in being a WP8 vendor either. Why do you think Nokia is selling out? And no other WP vendor makes any real money since all of their market share combined is less than 1 percent of the smartphone market.

Its great, Why do I feel 7.2B is very low?

The acquisition includes distribution channels around the world, factories, devices, R&D and softwares including google maps replacement Nokia Here, which in my opinion very good too.

When we compare this to a software starup Tumblr with 1.2B this seems very less. I could be wrong and missing something big.

Nokia has lots of debt too, which makes It cheaper

Correct me if I'm wrong, but Microsoft is buying only Nokia's devices & services business, and debt will stay in Nokia. I tried to find any mention of the debt in official press release documents but I couldn't.

&die with

> Nokia has lots of debt too, which makes It cheaper

No.

Nokia has a net cash position of about €2 billion. (Was €4 billion before buying out the Siemens half of NSN.)

No debt is being assumed in this deal, and no cash is going along for the ride to Microsoft.

In any case, debt makes a deal more expensive if it is being assumed -- not cheaper. If it stays with the original company, then it has no effect on deal price.

This is not a great move. A great move would've been to sell Android phones, even in the 25th hour.

Suicide by Microsoft.

There is no money in being an Android vendor except if you're Samsung and are totally vertically integrated.

I remember when the consensus was that there was no money in being an Android vendor, period.

I'm also not sure how the $10 billion valuation of Xiaomi, on sales of $2 billion Android phones figures into this "not making money" thing. Weirdly, those charts you see every few months that tell that "Only Samsung makes money from Android" don't include any of the top 5 smartphone sellers in China. I mean Lenovo is hardly an unknown name in tech.

Lenovo doesn't make any money. $500m on $30bn revenue. No point in being in that game.

For the downvoters: Nokia is losing money right now, but managed to post a profit for Q4 2012, which at $585m was more than Lenovo made in all of 2012, and about 5-6 times more than ZTE made in 2012.

Beyond a certain point, market share is much less important than profits, much more so in the phone space because it's not like the desktop operating system space where people are building up large systems that will be hard to port in the future.

Amazon doesn't make any money. <$7mil> on $15Bn revenue. No point in being in that game.

Earnings aren't the sole determinant of whether a company is a worthwhile ongoing venture...

The difference is that Amazon is in a market with enormous barriers to entry, and as an Android vendor Nokia would be in a market that a dozen Chinese and Korean companies are already competing in. Amazon will make tons of money, even if at relatively low margins, when it grows to Wal-Mart size. Nokia can't even hope to become the Wal-Mart of cell phones.

Being an Android vendor is like being a PC vendor. Acer, Lenovo, etc, not only do they not make any money, but they have no hope of dominating the market and winning on volume the way Wal-Mart does and Amazon hopes to do. It puts food on the table, I guess, but if I were a Nokia shareholder I'd rather they just liquidate and return their capital than take that course of action.

I think Elop's greatest achievement is to sell people the "There is no money in being an Android vendor"-lie. And people are actually buying it.

WP market is much much smaller, so, by becoming a big player in this market, which Nokia achieved in very little time, they became in fact a big player in a market where there really is no money.

Had they instead of this focused on becoming a big player in a market that actually matters, e.g. the Android market, then Nokia may still (or again) be worth a lot. (But then they wouldn't be a cheap take-over target for Microsoft.)

With Nokias connection to telcoms, they could have easily achieved a big chunk of the android market share.

Hilarious. How is that river of money working out for HTC, Sony, LG, Motorola ?

Remind me: which company has just been sold for peanuts after trying the WP strategy?

Motorola tried the Android strategy, and got sold for even fewer peanuts.

Specifically, for $12.5 billion, minus $2.4 billion for the set-top box business, minus $3.4 billion in net cash, minus $2.5 billion for tax assets. Actual cost to Google: $4.2 billion.

Compared to Nokia: €5.4 bilion = $7.2 billion.

You could come up with many examples of failed companies with devices based on Android. This may just mean that they did something wrong (bad devices, advertising, etc). However, the companies that were successful (e.g Samsung) prove him right.

Nokia was massively larger than Motorola. (Look at historical market cap data. In year 2000: Nokia > $200B vs Motorola ~$80B).

Nokia was the market leader in smartphones before they went WP. They were larger than Apple and Samsung combined and then some more. Motorola wasn't a big factor in the smartphone business. Google bought them for their patents, certainly not for their mismanaged smartphone strategy. So, Motorola went from 0% smartphone market share to roughly 3% with Android. (Nothing to write home about, but you can't blame this on Android.)

Nokia on the other side was at 34% when they decided to go all in on WP, and look where they are now: 3%. Nokia's fall is of historic proportions. Motorola's fall doesn't even come close.

Installed base became meaningless after the iPhone changed the game. Everybody started out at 0% of a brand-new market -- including Nokia. That's why it's known as disruptive innovation.

Nokia's mistake wasn't in killing Symbian for smartphones in 2011. It was in not killing Symbian in 2009 or 2008. But it's hard to give up that market share and start from zero.

In cases of disruption, high market share is actually a disadvantage, because you stick with your existing product longer than you should.

I appreciate your engagement in this discussion, but you can't be serious now: Of course the iPhone was a game changer, but that doesn't reset everything to 0. Nokia's brand recognition, Nokia's relationships with telcos and their vast distribution channels... these things don't go flying out of the window just because of the iPhone, and it certainly wasn't a disadvantage.

As for Nokia killing Symbian: To publicly announce a year before you actually ship the next product, that your current products are now obsolete - huge mistake! I don't think there is any dispute on this.

But we digress: I strongly believe that if you do it right there is money to be made as an Android vendor (don't forget those emerging companies from China, Huawei, xiaomi,...), but there is no money in WP. Nokia did a brilliant job with their Lumias, but they just won't sell without the right OS.

Brand recognition is the one thing that might actually have been valuable. But then, it didn't save Blackberry. Which chose the option that you seem to suggest for Nokia -- of leveraging its existing installed base into a gradual transition. (Incidentally, RIM only sold smartphones, and had a peak market cap of $120 billion in 2007. Today, it's worth less than 1/3 of Nokia.)

Telco relationships and distribution channels are necessary but not sufficient. All the other phone makers had telco relationships and distribution channels, too. Didn't help them compete against the iPhone.

What got them some traction was that they threw out their old smartphones and started over -- 2 years before Nokia finally got around to doing it. That 2 years made all the difference.

There is an argument for Nokia ditching Symbian and keeping it secret. This assumes it could've been kept secret. A change of that magnitude was bound to leak out -- for example, a Symbian engineer quitting the company in disgust and telling the newspapers.

Disruptive innovation is called disruptive because it turns your assets into liabilities. For example, your factories and distribution network used to be valuable because they gave you scale that nobody else had. But now, they just cause you to have higher fixed costs than your competitors. The classic example being US Steel when the minimill disrupted the steel business.

Im not sure why its better for Nokia to be under MS than working with MS.

It seems to be a great move for MS if anything. That'd be fine if it wasn't a move that was planned by planting a CEO with a plan to decimate the company until MS could buy it. It might be legal but it's certainly not moral.

Actually I don't think that was intentional at all. Nokia failing so miserably with Windows Phone can't have been anyones plan. And if they had succeeded like expected, Nokia would still be worth too much for Microsoft to consider buying it.

Except that everybody knew that switching to WinPhone is suicidal. Search for the announcements on HN and read the comments.

Agreed, but I doubt that Nokia execs knew it (or some knew, but weren't in the majority). I think Nokias biggest mistake was to commit to WP 100%, at a time when they didn't even have handsets ready. The completely silly estimate of selling hundreds of millions of Symbian smartphones after that announcement just underscores that.

Really? The way I remember it was that the Lumia 920 was hyped up massively online. If people didn't like WP8, they at least admitted that the camera looked amazing. The buzz seemed to die before it even launched though..

"There's no money in being an Android vendor if except if you're Samsung" is a silly statement. Nokia _could_ have done just like Amazon, and created their own platform based off Android, but with no ties to the Google ecosystem. With Meego, they could even have made a compatibility layer allowing developers to easily port their Android apps.

However, that plan would only have worked if they did it just around the time when Android became popular. Now it's probably too late.

No, they couldn't have for the same reason no other android vendor can: they have no compelling way of differentiating an Android spin off, unlike Amazon who has tremendous media store resources. Its just shitty skins like Sense and Touchwiz.

..and the same argument applies to being a Windows Phone vendor - if Nokia had great success with WP, others would have followed and they would have been in the same situation.

However, Nokia actually has, and used to have lots of resources, far more than most other phone vendors. They had the Ovi store, Nokia Comes With Music, N-Gage, and finally a very nice in-house NAVTEQ Maps application. The "only" problem was that they never really managed to do most of these _well_.

Which I think is at the core of the problem. Choosing Windows Phone as the platform only made it worse and tied Nokias hands, not better.

It is the inevitable move. MS can't let Nokia founder after going all-in for MS.

>With Windows Phone, Nokia and Microsoft at least have some hope of carving out a profitable stake in the market.

I think you mean Microsoft, Nokia is no more. You think they'll really do it this time? They've only been trying since before the iPhone. I dunno, maybe without Ballmer, they can make something happen.

>for $200 unlocked its phenomenal phone.

Don't get used to that. It's because they overestimated demand.

and for $200 unlocked its phenomenal phone

What does this mean? You paid $200 for the phone? You paid $200 to unlock it? What do these phones cost, with contract, without?

He bought a phone for $200, all-in. The phone came unlocked, without a contract. Just put in a SIM and use it on any carrier -- including a prepaid carrier -- with or without a data plan.

The way it works in most of the world.

A more descriptive term might've been "$200 unlocked, off-contract."

I bought a 521 for $100 and am super impressed. Put it on my petl plan and my phone bill is about $10 per month.

The new Nokia mobile can be great but business is business and if they can't build an ecosystem it does not matter if your mobile has billion of megapixels. I love that Blackberries are using QNX but this is not enough.

My other concern is if Microsoft is being negligent instead of if they are right or wrong. For example, I think Skype acquisition was negligent in a moment where this kind of technology was moving to the browser (WebRTC), being commoditized, and with a few lines of code everyone can technically replicate the technical parts of the service. Nokia acquisition and Microsoft recent write-offs will scare investors.

In others aspects I also experienced a general degradation in the Microsoft relationship with partners/developers that can obviously harm their business and developers ecosystem. For example, they didn't release the latest Windows 8.1 version to MSDN customers, only to a few vendors. Companies need the latest release to test their software in new environments.

There are a lot of positive things that Microsoft is doing right related to the cloud such as Hyper-V, App-V, Azure, and development tools. The main concern is if they only understand the infrastructure and not the end user and if this issue is embedded in their DNA. When I deal with some of their commercial hosted web services, like Microsoft Exchange, it seems like nobody in Microsoft used GMail, AdWords, or Google Analytics before...

Not really. WebRTC makes the technical part of voice and video messaging easier, but it doesn't solve the problem of getting enough people on your service to make it worth joining.

WebRTC makes sense if you have a web service that the majority of people already have accounts on, have open in their browser whenever they're online, and already know their friends' usernames on - something like for example GMail. Which is probably why Google have been pushing it so hard.

That's why I said technical part and not the business part.

But I can also argue about the business side. If you think how fast companies such as Facebook, Tumblr, etc achieved traction you can think that Skype risks are big.

There was some credible speculation back then that Google bought up Mototorola because its CEO threatened patent warfare with other Android manufacturers, something Google really did not want happening.

Along similar lines, I speculate that Microsoft snapped up Nokia because they threatened starting an Android line of phones.

I think there's a significant business lesson in here somewhere... Something along the lines off "partner with a giant, then become dangerous to it"

Funnily enough, MS also gets a nice patent bonus along with its purchase as Google did with Motorola. However, I think Nokia's patent portfolio is much, much more powerful than Motorola's. This is for three reasons, two publicly evident and one anecdotal:

1) Apple admitted defeat in its patent fight with Nokia, something it hasn't done with anybody else;

2) Nokia has multiple patent lawsuits ongoing, and none of them involve standards essential patents, the one thing most likely to invoke the ire of the antitrust gods;

3) A previous boss of mine knew the head of Nokia R&D in America, and he regaled me with stories of smartphone apps they had working in their labs way back in 2006 that made me go "how the hell do they do that?" Unfortunately, any two-bit app developer can do those things today on any modern smartphone platform using publicly documented API. But I am still curious about what goodies they have hidden away in their labs today.

I speculate that Microsoft snapped up Nokia because they threatened starting an Android line of phones.

Remember that MS makes money off Android phones.

MS also gets a nice patent bonus along [..] Apple admitted defeat in its patent fight with Nokia, something it hasn't done with anybody else

Apple has (well had but I'd bet dollars to donuts it was renewed) a patent cross-licensing agreement with Microsoft so this could be a win for Apple as well.

Remember that MS makes money off Android phones.

Purportedly. I engaged in a debate on here before which involved trying to find the supposedly enormous sums of money that Microsoft makes from Android in their quarterly financial statements. At best it has to amount to what would be chump change to a company like Microsoft.

Instead we hear about supposed agreements where vendors who all happen to also be Windows Phone makers pay some unknown sum to Microsoft, which for all we know is used towards their WP licensing.

If Nokia released Android phones it would been devastating to Microsoft's mobile platform. It would have ruined it.

I think people dug into their latest earnings and made a case that MS did make a few hundred mil on Android phone licenses.

But you're right: it's chump change to MS, and Nokia putting out even a single Android phone would have been a huge blow to MS.

I think this is where the message gets mixed. It's not about how much Microsoft makes, its that apparently Microsoft makes more from Android than Windows phone[1].

[1] http://www.infoworld.com/t/android/microsoft-makes-more-andr...

I have no specific knowledge at all of any cross-licensing here (and if I did, I surely won't comment on it in public), but from the few license deals I very tangentially know of, they happen in terms of portfolios of assets valid at a given time for a given period. That is, you get rights to portfolio X of N issued patents for M years, and I get rights to portfolio Y of P issued patents for Q years. We negotiate to assign some value to those portfolios, and if they don't even out, somebody pays the other a royalty.

However, I cannot imagine anybody signing an eternal, all-encompassing cross-licensing deal to each others' portfolios. This is for many reasons, one simply being that one never knows what could be invented, and another being one simply doesn't know when the other will stop inventing and thus, reciprocating.

Yes, Apple certainly has a cross-license deal in place with MS (in addition to the one from the 90s, given the number of UI features WP shares with iOS but has not been sued over). But I would be very surprised if this acquisition was included in those deals. Rather, the relevant cross-licenses were made when Apple settled with Nokia.

> Remember that MS makes money off Android phones.

Yes, but I assume not nearly as much as they'd make from the sale of their own phone system tied into their own application and media ecosystem. On average, this coupling would keep producing revenue long after the original sale.

Microsoft's own press release makes clear that they are not buying any patents. They are buying a 10-year license to Nokia's patents.

http://www.microsoft.com/en-us/news/press/2013/Sep13/09-02An...

This is almost certainly to lubricate regulatory approval, and because it unleashes a Nokia patent monster upon the lands.

> ...they are not buying any patents. They are buying a 10-year license to Nokia's patents.

That's basically the same isn't it? A patent can only remain active for 20 years, assuming most of the patents are several years old the majority of them will be pretty close to expiration in 10 years time.

Note: I'm basing this on NZ patent law, but I assuming it's the same for any 1st world country...

That's basically the same isn't it?

If Microsoft owned the patents they could enforce them against others. As a licensee, they simply protect themselves from Nokia enforcing it against them.

As I said elsewhere in here, a Nokia with a big stack of patents and no hardware business is going to be an ugly thing for the industry: They can go gangbusters with patent assaults while having nothing for their victim's to attack in return. All the while Microsoft will be enjoying their 10-year license.

> As a licensee, they simply protect themselves from Nokia enforcing it against them.

Hmm that sounds rather a lot like mafia. "Pay up or else, no matter whether we're owned by you."

So it smells like a very similar move to the SCO-attack on Linux. Microsoft competitors could get legally assaulted by a zombie Nokia while Microsoft itself is not associated with the legal fight.

> If Microsoft owned the patents they could enforce them against others.

Thanks for the clarification, that makes sense

You seem to be right. Here's an article [1] with details about the transaction.

The main points of the deal are:

- Microsoft pays € 5.44 Billions for all of its Devices & Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services production facilities, Devices & Services-related sales and marketing activities, and related support functions.

- Nokia will grant Microsoft a 10 year non-exclusive license to its patents as of the time of the closing (with option to extend to perpetuity), and Microsoft will grant Nokia reciprocal rights related to HERE services.

- Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four year license.

- Microsoft has agreed to make immediately available to Nokia EUR 1.5 billion of financing in the form of three EUR 500 million tranches of convertible bonds to be issued by Nokia maturing in 5, 6 and 7 years respectively. It is at Nokia’s discretion if it chooses to draw down all or some of these tranches.

- To avoid the perception of any potential conflict of interest between now and the pending closure of the transaction, Stephen Elop will step aside as President and CEO of Nokia Corporation, resign from the Board of Directors, and will become Executive Vice President, Devices & Services

[1] http://www.efinancehub.com/nokia-corporation-adr-nysenok-doi...

This particular deal point is interesting to me:

Microsoft will also immediately make available to Nokia EUR 1.5 billion of financing in the form of three EUR 500 million tranches of convertible notes that Microsoft would fund from overseas resources. If Nokia decides to draw down on this financing option, Nokia would pay back these notes to Microsoft from the proceeds of the deal upon closing. The financing is not conditional on the transaction closing.

Sounds like Nokia may be running into a cash crunch? They specify that the financing is not dependent on the transaction closing - so it seems as if Nokia needs the money either way, and if the transaction closes they will repay MSFT.

Cheaper to buy them with money stuck overseas than repatriate and pay taxes on it.

True....very good point.

Interesting.

Why yes, you're right! I totally missed that. And your rationale makes sense as well.

As for the Nokia patent monster, well... it's already been rampaging the countryside for a few months now. I haven't thought through the ramifications of this deal, but I wonder if it would allow them the same immunity that trolls enjoy?

Also, I just realized, the rampaging patent monster is another reason MS did not buy the patents outright. Nokia has active lawsuits against many companies and I doubt anybody wants to inherit that kind of baggage.

No, but MS just found a way to bootstrap it.

This is largely OT, but I consider this to be a critical factor in online communities, so...

    I speculate that

I upvoted you just for this bit. Smart people who note when they're speculating are rare ##. I hear speculation spoken as though it were experience or authority depressingly often.

Reading your comment further: I agree.

## I'm worried that I'm sounding prejudiced and that's not my intention. Not-smart people speculate constantly and I doubt they recognize it; it's hard to recognize speculation in our society. Smart people are the worst: their speculations sound reasonable/smart. Smart people silently-speculating are like Homer's sirens: sounds good until you're dashed on the rocks.

Excellent points. Wish I had written this comment. =]

Denoting when you're speculating is definitely important. It can help to deconstruct the problem - a bit like a well-placed assert statement.

One thing which I haven't seen anyone mention yet. Nokia, like Skype, was a non-US company, which means Microsoft could use cash which is trapped in Europe.

So you have to take the purchase price and discount it by as much as the US Corporate tax rate (which Microsoft would have to pay if the money was going to be repatriated back to the States, as would be needed if that cash was going to be used to pay dividends or to purchase a company based in the US).

yeah, in one of their releases they specifically mention the transaction will be completed using offshore funds.

and while i'd generally like to see some movement on policy to encourage large us-based multinationals to bring-home more of their offshore earnings (for reinvestment domestically), the current environment does play-out nicely for foreign m&a - which is at-least (in my opinion) a better use of funds than dividends and buybacks.

Money from work and sales outside the US should be repatriated and invested domestically, just because the company is notionally based in the US?

Sounds a tad imperialistic?

I think getting companies pay tax in the US for sales in the US would be less internationally antisocial...

>I think getting companies pay tax in the US for sales in the US would be less internationally antisocial...

IIRC, that's precisely not what these tax repatriations are about; they're about sales abroad that are received by a foreign subsidiary. They avoid repatriating it back to the (US-based) parent company because they suspect if they hold onto it long enough the US government will issue yet-another tax holiday.

Remember that no other developed country besides the USA requires that local companies pay local tax again on foreign profits already taxed where they are earned. Most nations recognize that that would make investing locally costly and undesirable. It would also put local companies at a competitive disadvantage worldwide.

The politics of government greed in the USA has created a tax system where the USA government charges the highest business tax rates in the world and enforces punitive triple taxation of foreign profits. That's why USA companies are keeping their money abroad instead of investing in jobs at home. (The USA tax rate was second in the world until a recent Japanese reform, but Japan never triple taxed profits abroad, so the Japanese rate was always effectively lower.)

Corporate taxation is one of the few tax issues where Congressional Republicans are often more sensible than Democrats, from a purely technical tax policy perspective. Obama is willing to work with them, too, but nothing seems to get done. It's one small part of the ongoing failure of Washington.

And god forbid you're a US citizen living and working overseas. You still have to fill out US tax forms for both state and federal tax. The federal government won't charge taxes on anything under ~$90,000, but the states sure will expect you to pay your share of their taxes, even though none of that money was earned or spent in the US.

Wouldn't you not be resident in any state in that case then? Or could pretend to just be in a non income tax state?

I hear a lot of ex-pats who move to a non-income-tax state (like Texas) just before they move overseas. If your US residence is still in a state with income tax, even though you don't live there you still get taxed on your overseas income because as a US citizen you still have residence in your state even if you don't live there. It doesn't matter if you're physically there or not.

The only other alternative is to renounce your US citizenship if you never plan on coming back.

From what I recall, they wouldn't have to pay tax twice, they'd have to pay the difference between the US and Irish taxation rates. Other countries don't do this, but other countries also have huge tax evasion problems as a result.

I would argue that there's a hand full of countries where being based is more than "notionally" beneficial. The U.S. is definitely among them. I'm not suggesting that the tax should exist but let's not pretend that being based in the U.S. is not dramatically different/better than being based in most other countries you could throw a dart and hit on a map. It's not as if these companies couldn't just move their headquarters off-shore to avoid the issue altogether.

>>It's not as if these companies couldn't just move their headquarters off-shore to avoid the issue altogether.

Which is always the risk when you call for something like the parent wants.

Huge companies, like Microsoft, have offices all over the world. Microsoft has about equal numbers of workers, and revenue, inside and outside the US. The same could be said for Apple. That makes the US a huge market, and it makes sense they are based there. But if being based in the US put them at a disadvantage in the rest of the world (e.g. they had to pay tax twice), it is likely they would move, at least notionally.

There is a big problem with companies that don't pay tax anywhere, or nominate very low tax countries. A coffee company in Europe famously buys coffee cheap with a subsidiary in a low tax country, then sells it to its other business units for so much that those units claim to run at a loss. No coffee ever passes through its small but extremely profitable office in the low tax country. That's annoying, as it puts the burden of subsidizing welfare salary top ups for its underpaid workers on me.

To suggest a solution - The answer here is to tax sales in the country the buyer is in, rather than taxing profit. Sure, it'll kill some low margin companies, but the overall economy will work better because it won't be so skewed by how easily a particular industry can dodge tax. I suspect financial services would do particularly badly.

In terms of this merger, if the tax was on transactions between companies (and I think it should be, though smaller), if Microsoft France funded the deal, it should pay tax in France.

M&As are generally value destroying activities. Why do you think dividends and buybacks are inferior?

note that this is just my personal opinion (and is in contrast to what seems to be the consensus), but i tend to believe that firms are more efficient in investing excess capital, to drive long-term growth, than shareholders, who have largely become about maximizing short-term profitability (and often at the expense of long-term growth).

and while i'd agree that firms often overpay in the hope of realizing ‘synergies’ that rarely exist, an acquisition is at least an investment in something tangible (ip, product lines, people, ...), which at least has the potential to generate value.. and while it may fail to do so (or do so sufficiently as to offset the costs involved), i view it as a better use of funds than direct returns to shareholders in the hopes (from a macro view) that they are able to efficiently reinvest in value-generating activities.

edit: just want to add that i realize that if one views a firm’s primary function as to maximize returns to shareholders (as many do, a fair view), then m&a, with its high probability of not paying-off, would be considered less favourable than a direct transfer like a dividend. i however tend to view a firm’s function more along the lines of ensuring its long-term survival and growth (which, in-turn, and ideally, should generate significant returns to shareholders, and drive innovation).

Here's my take. Nokia's downfall has literally been the biggest business failure in the history of the planet - see communities-dominate.blogs.com for backstory. (As I mentioned in a previous post; I'm largely summarizing things Tomi proves with hard data.)

My interpretation of this is that the increasingly untenable position of Stephen Elop began to incriminate the whole board, as any toppling of Elop would invite all sorts of questions as to why he wasn't booted yonks ago. The only way that Microsoft had of avoiding another black eye for Windows was to buy Nokia to appease investors (seriously, how many black eyes can one platform get? Is it a potato?)

Consider: Had the headline read, "Microsoft deal destroys World's Leading Manufacturer of Mobile" (which incidentally is the actual, ink-on-paper market position held by Nokia circa Elop's hire, shows Tomi) and it could have destabilized the larger Windows ecosystem too.

If this claim seems histrionic, recall that the ENTIRE PC INDUSTRY is like a tenth the size of mobile. Yes, I love my PC too, but most consumers seem much happier with other devices for a wide range of use cases. Therefore, getting Windows on those devices mattered. Windows Phone mattered. Windows RT mattered. Intel is on its back leg, and ARM is about to make its final assault on the server closet, where Windows Server is melting away faster than ice on a VAX.

And yet I don't think people realize exactly how vulnerable Microsoft is. The one good thing Ballmer did is notice. Way too late, though. It seems strange to me that there are others who are even less clueful than Ballmer. If your business depends in ANY WAY on Microsoft -- and it probably does -- plan accordingly.

We may see the strength in Microsoft server future come from azure, and not from software. Though it is more difficult to get people to try azure over other platforms, I have heard amazing things about it. Personally, I've just always stayed away from Microsoft dev environments, even though I prefer my pc and windows phone to my apple/android variants.

Is there a specific post you wanted to highlight on communities-dominate.blogs.com?

You can start here to get a sense of the depth of this man's obsession to highlight how far Nokia has fallen. I find him to be a reasonably entertaining writer, he's crafted a dramatic narrative around the foibles of Nokia.

http://communities-dominate.blogs.com/brands/2013/08/ballmer...

I know a couple of savvy guys working for Intel's competitors moaning about how Intel is going to demolish them. Haswell and its descendants, it seems, are the real deal, and in the long term, they hold out little hope for ARM in the mobile space, let alone the server space.

I dunno about Microsoft, but I wouldn't be betting against Intel. (Just to be clear, I have no stock in or position on any of the companies mentioned on this entire thread.)

In the server space I agree. However, in the mobile space, ARM has a huge advantage of licensing their cores to dozens of SoC manufacturers that provide very appealing, integrated, low cost chips for mobile vendors to build products on. It's like the Android of the mobile processor market.

If Intel ever start leasing out their manufacturing process to SoC vendors to allow them to build whatever chips they want, then I'll be more optimistic about Intel on mobile.

It'll be fascinating to see how this plays out. What's Tim Cook's magic number for price/performance in the iPad to justify an architecture swap, and can Intel hit it? I would have thought no a few months ago, but ULV Haswell looks like it's the precursor to something very, very nice.

It's hard to underestimate just how easy a platform swap would be for Apple (and Google already supports both in shipping products).

>recall that the ENTIRE PC INDUSTRY is like a tenth the size of mobile. Yes, I love my PC too, but most consumers seem much happier with other devices for a wide range of use cases

Meh, a lot of this is that mobile devices are advancing really fast. I'm perfectly happy with a 5 year old desktop, but I want a new phone much more often. Once mobile devices are "good enough" you will see people buy new devices less often.

>ARM is about to make its final assault on the server closet,

I've heard a whole lot of talk about this (and I've talked about this myself; I think I am in one of the industries that could actually sell the things. I have a bunch of customers who would pay a small premium for a physical server to themselves) - but I haven't seen anything realistic. As far as I can tell, you're better of with "Four strong oxen" as it were, rather than "one thousand twenty four chickens"

Quoting TOmi Ahonen's blog here should be blasphemy , to be frank. He presents a very contorted narrative, with unjustified venom. As for as his summarizing things with hard data, take a look here: https://news.ycombinator.com/item?id=6319063 He said Gates vetoed Ballmer's decision to purchase Nokia, and hence gave him 6 months to chart his way out. He squarely blamed Nokia-MS partnership for Ballmer's retiring. Now look at today.

So Elop was in fact a Trojan Horse?

Wonder what this does to the already strained MSFT vendor relationships. You could now almost guarantee vendors will start to completely dump Windows on ARM and possibly even look for alternatives to Windows x86.

I disagree. I doubt purchasing Nokia's phone business would make PC vendors any more worried than Surface/Surface Pro did. Windows is still king of the desktop and unless Android becomes a desktop OS or Apple starts licensing OS X there aren't any real alternatives with consumer brand recognition. If Ubuntu were the answer then System 76 would be more than a boutique PC maker. If MS starts making desktops, laptops, and servers... Then yeah it'll be a hectic day for the people responsible for Windows OEM relationships.

The worry here for MS, as I see it, is really that they loose HTC and Samsung and any other potential Windows Phone partner. I'm guessing they're prepared to deal with the consequences.

HTC and Sumsung are almost irrelevant in the Windows Phone ecosystem anyway. They obviously made little effort and aren't likely to make more, with or without the acquisition.

Idk, sounds like the year of Linux on the desktop is closer than it has ever been. :)

But you should really look at Chromebooks/ChromeOS for one glimpse of what a consumer-friendly, non-MS system would really look like. Right now it is the #1 selling laptop on Amazon, and reviews are pretty positive.

If I was a shareholder in MSFT, I would seriously be worried for the future of the whole Windows platform, mobile and desktop.

I started using Slackware Linux in 1997. If I had a nickel for everytime someone declared the Linux desktop is imminent since then I'd have more money than Bill Gates.

I'm not convinced it's been declared 1,340,000,000,000 times, but I get your point

If they said it before and they were wrong, surely that means they will be wrong forever!

If they continue to say it every year, they will eventually be correct, right?

Next year is always the year of the Linux desktop.

But I begin seeing worries in people where MS is pushing the OS (mostly privacy concerns) and is seems running windows in a hypervisor with VGA card passed trough is becoming more and more popular.

> and is seems running windows in a hypervisor with VGA card passed trough is becoming more and more popular.

I know absolutely nobody who does this.

I'm guessing that he's being a bit sarcastic since this would be an extremely hodgepodged setup, but I have thought about doing something like this for a home server/personal computer setup.

My thoughts where to have something like a rackmounted server machine in my basement with multiple storage drives, oodles of RAM, CPU, and a video card with it all running under an ESX (or whatever) install. Over the hypervisor I could then have running a headless NAS OS (e.g. UnRAID or FreeNAS) for my backups/media/etc and then a full-blown gaming PC running Windows with the GPU being virtually attached to it. Then (oh there's more) I could run all of my keyboard, video, mouse, and USB cables for the virtual gaming PC up through my house to where my desk is located. I figure that with this setup I could consolidate a several physical computers (gaming pc, NAS, etc) into one workhorse computer which would save space and possibly some electricity.

Sarcastic - no - for a few tech savvy friends of mine the only thing that really keeps them on non virtualized windows is gaming. So any solution that offers them that - from high performance vm driver to vga passtrough is ok.

The desire to sandbox windows is real.

I do something similar but only because of some Windows only educrapware that was foisted upon me. Well, and LabView.

Most Windows Phones were #1 best sellers on Amazon too. Look at where their market share is right now.

If we allow Android/Linux as a member of "Linux on the Desktop" I whole heartedly agree. I'm not sold on the GNU/Linux variant.

System 76 does a great job of making "just works" Linux hardware but they're not exactly a big player. Android and iOS have the advantage that they don't have to work like Windows. Even OS X suffers "this doesn't work like my Windows did" from switchers.

Mobile OSes can work like Android/iOS + their own unique flavor and have some leeway that desktop OSes aren't afforded. UI/UX for modern touch devices lacks the expectations that 18 years of mostly consistent Windows UI/UXhas built for the "traditional" Linux desktop.

With every passing day Windows is becoming more and more irrelevant - iPads, Chromebooks, non-Windows SmartPhones/Tablets etc. are really the future of consumer computing. So it isn't as far fetched as it was few years ago that OEMs will successfully back Ubuntu/Fedora/Android/ChromeOS and give consumers a laptop that can do everything Windows does for them today.

The only holdouts would be power users that rely on Windows software and the Enterprise users - they aren't the majority user base of Windows though.

This is true but it's not going to happen that quickly. Traditional computers are still where "serious" work like homework is done. In my experience anyone who does more than spend time looking up recipes and checking out Facebook considers their phone to be too limited for "real" work.

Some people might be happy with a bluetooth keyboard and a tablet but clearly the billions of dollars in sales of traditional PC hardware shows that the desktop is here to stay for a while.

My point, basically, is that no one is going to look back at history and say "Microsoft purchasing Nokia's phone division was the end of the desktop PC." They're going to look at the release of the iPhone and then the time that Android, iOS, Win Phone, etc became just as good (i.e. no one thinks "should I use my iPhoneLapDocTop or my Windows Laptop") for general purpose computing as Windows and OS X every were. I think cloud services and "dockable" phones with proper large screen UI/UX will be key to that. I'm pretty excited about that, assuming it happens, as I sometimes find my MBPr too large but my iPad too limited for some things like interviewing potential hires. Using the same core for each would be very handy, but I've digressed.

Also don't discount those holdouts. The fact that Windows gained so much of a foothold in the home because it was what people are/were using in the office. The Mac OS, even if it was 100 times better that Windows at any given time didn't have that ubiquity. Smart phones have the benefit of being in everyone's pocket, but until your boss/HR sets you up with a brand new iAndroidPhone OS laptop for work Windows will still have that crutch to lean on.

IMO the patient is terminal but the prognosis is a drawn out death that might be lived on by Windows Phone if any of this works out.

I'm old enough to remember a time when minicomputers and mainframes were where 'serious' computing was done. Microcomputer platforms like Windows and Linux gradually cannibalized their way up until practically nothing was left. It seemed impossible and stupid at the time but it happened.

I'm not predicting that mobile platforms will make the same inadvisable climb, but I'd be a little surprised if they didn't.

It'll happen very quickly. Soon your phone will be dockable and you will be able to use a full sized keyboard/mouse/monitor.

You may be correct, but google's acquisition of Motorola didn't limit the growth of android at all. If canonical plays it's hand well, they could benefit, as could firefox on mobile, but displacing microsoft on desktops is still a huge challenge.

Windows 8 'lackluster performance' still has greater market share then osx http://en.wikipedia.org/wiki/Usage_share_of_operating_system...

I know some will say 'but iOS/android...', but those are in addition too, not a replacement.

Every thing that happens in real life is not Stephen King novel. Elop may have affinity with Microsoft given he worked couple of years there. He worked for number of other respectable companies, so to label Elop as a Microsoft man is a bit of stretch.

Elop sold Macromedia to Adobe.

I used to remember Flash was cool, then it was dead for like 5 years allowing HTML5 and Unity to catch up.

I did not know that fact. thanks. Selling to Adobe resulted in the demise of every Macromedia products.There is nothing left from Macromedia in Adobe, Nokia products will meet the same fate.

About of month ago there was some complains from Nokia about Microsoft not making progress fast enough with the software [1]. Some other reports also stated that Windows Phone 8.1 was about to be postponed to early 2014. [2]

Both news (if true) were bad for Nokia which was quite dependent on the success of their higher end mobile phones on short term. I believe Nokia was little bit short of cash and their credit ratings are bad. IF Microsoft would have wanted to cause trouble for Nokia to drive down the acquisition price (or maybe even force them to acquisition), this would have been one way to do it.

[1] http://www.theverge.com/2013/7/29/4567046/nokia-frustrated-b... [2] http://www.wpcentral.com/microsoft-testing-windows-phone-81-...

To me, this is borderline criminal behaviour and shows once more that Microsoft is incapable of playing fair.

Installing a trojan horse as Nokias CEO, who then proceeds to destroy any value left in that company so that Microsoft can pick it up for a cheap price.

I'd be amazed if Elop is promoted to MS's CEO position for such deceitful behaviour

Interesting theory. Might indeed have been a plan. Microsoft was afraid that no hw manufacturer needed their os anymore. So they decided to build their own hardware. Fast way: Buy an exisiting Phone manufacturer.

I don't think elop was a Trojan horse, I don't think any of this was preplanned.

But I do think elop is a weasel and a scum and it would be seriously disgusting to have him as Microsoft CEO. He did a gross disservice to nokia and nobody I know has any iota of respect for him. He has no leadership qualities whatsoever. In fact, he is what you call a corporate whore. He pleases others and wins favors. Like now he has done ms a favor and they will make him CEO.

I would prefer to say that the Board of nokia is gone full retard hiring him as ceo. OR they knew since the start that M$ was gonna buying them.

I think the exact same thing...

  - get ex MS employee to be Nokia CEO
  - fire lots of Nokia employees
  - run the company down
  - buy Nokia, hire ex MS employee to run that part

It's a shame, i never had a Nokia, but the featurephones atleast have been decent hardware and quality. They haven't been marketleader for nothing..

Oh, and by the way, the next step will be:

  - buy all Nokia patents (if they haven't as well)
  - sue rest of the market

Nokia must be sitting on a huge pile of relevant mobile and networking patents (although the networking stuff may stay with NSN).

This deal includes a purchase of Nokia's handset division, and a licensing of a lot of their patents.

If you believe this was a conspiracy, you might be inclined to believe Microsoft will have influence over the remains of Nokia too. If that is the case, it's better to have Nokia sue the market over them patents, much less space to be attacked back without a devices division.

their dumbphones were superb too. the nokia 1100 is probably the most usable phone i've ever had, in terms of being a phone (voice calls and sms). comfortable to hold, comfortable buttons, nigh indestructible, and an insanely long battery life.

MS is known for it's ruthless business tactics. Nokia joins the long list of MS partners who got hosed. It's impossible to say how well planned this whole thing was, or if there was any gaps. But it's certainly possible.

1. Elop is the new rising star in MS.

2. Big American shareholders (who own more MS stock than Nokia) force Ollila to pick guy from America.

3. Elop commits to MS software almost instantly.

4. Widely criticized "burning platform" speech kills the revenue making phone business almost overnight. Nokia must commit to MS and it can't look sideways.

3. Elop's family has been living in Redmond all these years. They did not move as Elop initially said.

4. Ballmer announces retirement just before Nokia deal.

5. Nokia sells cheap just when sales show small hope.

How does 4. ballmer retirement play into things?

6. Elop becomes new MS CEO

Could it have been 'we need a new ceo, hey that guy from Nokia looks like a good candidate, buy nokia, get Elop, make Elop ceo' without the conspiracy?

Elop used to work at MS before going to Nokia.

It's looking more and more like a blatant take over from within via Elop as a Microsoft puppet. Now Elop has a high chance of becoming CEO of Microsoft.

Either way, it's not looking good for either Microsoft or Nokia. Those massive mega mergers rarely go well, for one party or the other.

I suspect that the name Nokia will be no longer in 2 years time.

Maybe that was the outcome Nokia's board looked for from the start? I mean, they did choose Elop, and it was pretty clear where that would lead them. Nokia was on a downhill slope way before Elop came onboard.

There were acquisition talks in June 2013 which fell through because the price wasn't right. Elop just had to bide his time. http://www.tech-thoughts.net/2013/06/failed-microsoft-nokia-...

The problem is that you could never prove it in a court of law.

It's not illegal, unless strong arm tactics were used to force the board into it against their will.

strong arm tactics probably weren't necessary, money was probably good enough.

I dunno about criminal, and nokia seems like an incompetent company (the smartphone market was theirs to lose and lose it they did), but I have to stand amazed at a couple players. Elop is returning to microsoft and Mark Penn, strategist from the hillary clinton presidential campaign, will be running marketing. Those two sure have the gift of failing up.

Its as if Ballmer wants to screw things up as much as he can before he leaves. While the behaviour, as you mentioned, is borderline criminal, this only means Microsoft wasting ridiculous amounts of money and time into a mobile platform that not many care for.

> To me, this is borderline criminal behaviour and shows once more that Microsoft is incapable of playing fair.

This is a perfect example of a comment that has no business on hacker news.

> Installing a trojan horse as Nokias CEO, who then proceeds to destroy any value left in that company so that Microsoft can pick it up for a cheap price

You do realize that Microsoft doesn't get to appoint the CEO of other companies right? Nokia picked Elop on their own. There was buzz at the time about how they had "stolen" him away from Microsoft.

~$7 Billion for the device & services business and Nokia's patents. Seems like a good price now, but one you wouldn't have ever predicted before 2007 & the launch of the iPhone.

In 2003 Nokia was worth $245 billion[1]

[1] http://techcrunch.com/2010/06/22/the-sad-tale-of-nokias-sink...

There's no doubt that Nokia has been buoyed by Microsoft leading up to this acquisition. The lack of android devices would have been completely illogical if this wasn't the long game.

I think "end game" is more appropriate than "long game"

Please see this comment https://news.ycombinator.com/item?id=6318882 they are not buying patents.

Considering that Google acquired Motorola Mobility for $12.5b, $7b for Nokia doesnt look expensive.

In 2007 RIM had a market cap of $120 billion.

Disruption is no fun for the disrupted.

Well, at least Qt got warp-core ejected before all of this. God only knows what would have happened in this transaction.

This. Even though I personally throw in with the GTK+ crowd as both a user and developer, the competition between the two camps is definitely good for innovation and makes for strong, compelling alternatives on the Linux desktop.

"This." This what? What does that mean?

You must be new to the internetz

http://www.urbandictionary.com/define.php?term=this

Or, like me, you're an internet old timer and just don't understand why people can't just take the time and type "I totally agree".

MS paid less for Nokia handset business than for Skype.

Oh how the mighty have fallen.

Goodbye to the Nokia brand, soon only to be mentioned in rose-tinted lookbacks. Mobile phones, built like a brick, running for days.

Mobile phones, built like a brick, running for days

The sad thing is that someone at Nokia seems to have just remembered those days and they've just announced the Nokia 515. A solidly designed aluminium and gorilla glass 'dumb phone' with a 30+ day standby time.

Eh, they've been selling brick phones to literally billions of people in the developing world for years.

But they've been all cheap, ugly and badly built plastic things (I've owned a couple). The 515 is an attempt to see if people are still willing to pay slightly more for a simpler phone if it is good looking and well built.

So Microsoft just handed the entire Asian manufacturers’ bunch to the Android ecosystem. Not that they’re not already there but it would be hard for any manufacturer now to invest on Windows when they would think that MS is already giving the edge to Nokia.

Also this comes like an acceptance from MS that they can’t penetrate the smartphone market. So they prefer to invest heavily on devices they own. Which is a first in their 30+ years of building software. Could this mean a similar approach in tablets?

The price though is a bargain. It’s significant less than what Google paid to buy Motorola and Nokia is in a pretty much better state than Motorola in many aspects.

To be fair, Google also owns a phone manufacturer (Motorola), also bought on the cheap after a few years of flagging sales. They've managed to keep relationships with other phone manufacturers going despite this, so far, but it is a similar problem.

It's conceivable that some of the asian manufacturers might want a foot in each camp (so long as each looked viable at all) just for leverage to use against the other.

The other manufacturers don't have any alternative but to stay with Google despite Motorola and the tightening noose of Play Services.

Play Services is an absolute win for consumers. How is it a noose for manufacturers?

It progressively reduces their control over the products they make and hands that ever more over to Google.

Where control means staying with Android 2.3.x far past the useful life of the product, I'm inclined to side with Google.

The real loss is only one OEM - HTC, other than that there is not a single one worth mentioning

Um, Samsung makes/made Windows Phones, too. They're heart might not have been in it, but if the platform was ever going to scale quickly they had to be involved. It would have been easier to convince them to make more/better Windows Phones than to get a big slice of their flash and RAM production some other way...

What a tragic end to the sad story of Nokia.

It was a long time coming now, but I'm still gobsmacked.

Looking back it's as if Elop and whoever his puppeteer is did all they could to undermine this company.

Sold to Microsoft for bits. Even Motorola sold for twice as much.

Nokia would have made money from Android. The market is massive and still growing.

There is no bright future with Microsoft. People don't buy or recommend Windows phone, not at a rate that matters they don't.

What a sad day. Farewell, Nokia.

That kills my hopes for a Nokia Android phone.

Also, Elop seems like the least interesting character to succeed Ballmer. What does he bring to the table? What has he done? Guy looks like a careerist.

http://en.wikipedia.org/wiki/Stephen_Elop#Career

I'm not sure that was ever likely with Elop at the helm, but Nokia is now out of the phone business until at least 2016.

I believe the press release only speaks about the brand. There does not seem to be any limitations for Nokia to enter into phone business. They would just need to have some other brand.

Maybe Jolla? :D

Oouh.. that reads like he managed to get every company he worked for to fade away, go bancrupt or loose competitive strength in a very short time. This. Or he was simply at the wrong place at the wrong time, very often.

    * DEAD: Lotus Development Corporation
    * DEAD: Boston Chicken
    * SOLD: Macromedia's
    * ALIVE: Juniper Networks
    * DECLINING: Microsoft Dynamics

I don't know this guy, but if that's the best they can get..

> DECLINING: Microsoft Dynamics

Ummm, Microsoft dynamics has grown revenue every year for the past 4 years. But hey don't let the facts get int eh way of your rage:)

http://www.microsoft.com/Investor/EarningsAndFinancials/Earn...

I don't know of anyone who blames Boston Chicken's IT on it's bankruptcy. He was their CIO and I doubt he had any influence on their notorious franchising strategy. Plus they're also still alive after rebranding as Boston Market, and while I couldn't find any location numbers, they boast of serving 15 million pounds of mashed potatoes and 80 million pieces of cornbread a year.

He was per Wikipedia "a director of consulting" at Lotus ... again, not an area that determined their decline and fall.

Well, this makes all the speculation about Elop succeeding Ballmer that much more interesting.

Yeah, it would be interesting to see if any MSFT shareholders are that dumb. Elop's idiocy destroyed Nokia, now let's sic him on Microsoft too.

Nokia was well on its way down before Elop. It's not fair to pin that on him. But, it did seem pretty clear (even then) that his turnaround strategy involved a Microsoft purchase.

I don't think you can call something a "turnaround strategy" when the result is to cause the company's value to nosedive so far that the most viable means to salvage any of their investors' money is to divest them of their stock at a significant loss. From the Nokia stockholder's perspective, even if by some miracle the company were to subsequently prosper under Microsoft, by that point they no longer own it, so how does that help them?

I'm looking at it from a "stop the bleeding" point of view. When he took over, Nokia's stock was a little less around $9... down from it's high of almost $40 3 year earlier. Things had somewhat stabilized, but it was clear that Nokia was no longer going to be the top tier phone maker they had been for a decade. The strategy at that time was to ditch their Symbian and Linux platforms and jump 100% into the Windows Phone world. When they starting making only Windows smartphones (not including feature or dumb phones here), if things didn't improve, the obvious exit for Elop and the Nokia board was a Microsoft buyout (plan B). Now that they are trading at less than $4, it's pretty clear that something isn't working, so they need to just skip all the presences and just join Microsoft. I'm not sure how Microsoft's own transition is going to play in this, but I bet that hurried up the deal a bit.

So, the benefit for the shareholders is that they won't loose any more money than they already have. Microsoft has provided a decent backstop to stop the loss in value.

Plus, I haven't seen what Microsoft is actually buying... they may end up leaving the backend infrastructure products as a separate company, which would probably leave shareholders with some value.

When he took over, Nokia still had the in-house expertise and the resources for a turnaround. In fact Nokia N9 would have been a raging success, if Eliop wouldn't have killed it.

And another thing: the feature phone business is huge and underserved by Android. Nokia was in the best position to come up with a reasonable alternative.

When Elop was brought in, the board was clearly signaling that a turnaround from within was not going to happen. The Microsoft smartphone strategy was already in place and was going to happen.

I have a lot of respect for Nokia, but they had the technology for the iPhone and iPad long before Apple (roughly), and they were never able to capitalize on it. Hell, I had an N770 in 2006 and it was great. But it wasn't even close to being finished enough for the masses. My fear with MeeGo was that it wasn't in the same league as the iPhone design-wise. Hardware-wise, Nokia has always been top notch. It's the mix of software and design where they seemed to be lacking. It might be that they may have put too much emphasis on open-source and Linux graphics at the time.

Wouldn't it be absolutely embarrassing if Firefox OS ends up capturing 5-10% of the market? And personally I think it will, just like I knew Nokia is dead after announcing their new Windows Phone strategy.

Nokia is a textbook example of things not to do. All the talk about them not being able to deliver the iOS polish / experience is simply not true. That's not what killed them.

What killed them is that they focused on price and quantity instead of quality, coupled with schizophrenic business decisions.

Example: Nokia closed their factory in Bochum, Germany to move to Cluj, Romania for cutting costs. Then they closed their factory in Romania, with the rumours being that they'll move to Moldova. They didn't of course, moving the production to China.

The reason for these moves? Simple - in both cases Nokia took advantage of subsidies granted by governments / the EU, which are given as an initial incentive.

At the time, the public opinion was like "oh, but Nokia is a big capitalist and they have a duty to their shareholders" and "China makes more sense for Nokia". Well, I find a sort of poetic justice in how things turned out for them.

Not really embarrassing. FirefoxOS is standing on top of the success of Android... literally, it leverages all of the work on the Linux kernel, and all of the work the handset manufacturers have done in writing hardware drivers and exposing the API to Android.

>embarrassing if Firefox OS ends up capturing 5-10% of the market

Considering they only have 20% of the browser share, it'd be an amazing success story if they managed to get 10% of the mobile OS market.

Nokia, like RIM, Microsoft, and Palm, was caught with their pants down, TWICE. First with Apple's iPhone, then with Google's Android. Basically two tech companies with no presence in mobility, took the market away from the incumbents. In hindsight, when Elop took the CEO job, it was too late to fight the iOS and Android behemoths.

What could have Elop done? Gone down the Blackberry route and try to have a competing platform? Or maybe try to fight Samsung by releasing an Android phone - with no guarantees that Nokia would fare better than others who tried (looking at you HTC, Sony, LG, etc.)

You make an interesting point. When I think back to the 2007, there was a huge buzz around what the iPhone would turn out to be. At that time, Nokia had some interesting R&D experiments such as the Nokia 770 tablet (followed by the n800 tablet). I worked with those devices from 06 and saw the UI improve at a steady but slow rate. The toolchain was very promising since it was just Linux+ARM. The UI chrome was called Maemo.

When Android first came out, I remember thinking how inferior it was compared to the Linux OS on the Nokia tablets. Nokia had the Symbian platform at that time... how can one fault them for not promoting the Linux based system then?

It's especially interesting in light of shareholder activism by Value Act. Value Act had been against the devices strategy. Two days ago they struck a deal to get a seat on MSFT's board[0]. Was this part of the deal? Or is this an upraised finger in the rearview mirror?

The kremlinology of all this is very complex.

[0] http://www.usatoday.com/story/money/business/2013/08/31/micr...

That actually could be a benefit to Microsoft having valueact on the board, though it isn't easy, I suspect opposing views are what make a board stronger, rather than weaker.

The acquisition does NOT include:

  - HERE Maps
  - Nokia NSN (Nokia Siemens Networks, its "network infrastructure")
  - Advanced Technologies (I couldn't find any info on what this means, given the name)

The old fat couple in the room had a dance and microsoft just ran out of things to say, so in order to avoid an awkward moment (high end sales are abysmal) he proposed. nokia looked around, didn't want to die alone, and like any scared middle aged woman, said yes.

The combined company makes a lot of sense and will be well-positioned to compete in mobile, blah blah.

I'm sad, because Nokia stood for something: something I generally liked even though I didn't own one. As did Microsoft: something I disliked mildly, but that needed to exist.

Now those two brands can't stand for two separate things any more. The combined company will stand for maximizing shareholder value through leveraging synergies, or something.

Meanwhile, the iPhone has lost most of its personality, and Ubuntu phone isn't shipping (and it'll be a watery product anyway).

Can someone please start a smartphone company to make a phone I care about?

Jolla might interest you, though I have no idea about their current state.

Firefox OS might grow up into something serious in a year or two (but that's more of a hope than any prediction).

As a Nokia employee, I can't yet comment on whether this is ultimately good or bad for us and what our dreams were.

I can say that it is a very emotional time for us Nokia employees, and I can only imagine it is even more so for those of us who are also Finns.

Do we imagine Elop tanked Nokia on purpose to cheapen the cost of this acquisition (and shutter the patents under one roof)?

Ballmer trumps his critics. Well done - Sir.

There is a lot of potential to eat from both iPhone and Android cakes. Android needs a beefy h/w, c'mon guys let's admit it. Windows is way faster even on the low-end lumias. Also don't forget MS Office - the sleeping giant on windows phones.

History likes to repeat itself. First Jobs wouldn't licence MacOS, and Billy rode the wave he created. Then google got the second wave. Why? The same reason, he wouldn't license iOS.

From a user perspective iOS is the best, but the new Lumias makes me think of Apollo as no less great. No matter what google does, lumia will eat big from Android's share. But I waiting to see how big a bite it's gonna be on the apple.

In the enterprise world Office on Phones is gonna pay a big role. This is death toll for blackberry, sorry to say that.

C'mon Cook, partner on. Let others make "cheap" apples. License iOS before it's too late.

<quote>Two turkeys don't make an eagle</quote>

But it does feed a family of ten... keeping useless jokes aside; Despite loving my Lumia Windows phone, I am not too thrilled about this acquisition either. I just hope Microsoft's internal politics doesn't ruin Nokia's future!

> I just hope Microsoft's internal politics doesn't ruin Nokia's future!

How bright do you think Nokia's future was prior to this?

Pretty bright I must say. Lumia became the fastest growing smartphones in the Asian and South American markets. For a company that resurrected itself from bankruptcy to this, does hold an impressive future if kept on its track.

Wow. Some call Tomi.

For copious, copious background on the MS/Nokia debacle, 'burning platform' to present: communities-dominate.blogs.com

(Not affiliated, just an avid fan of this mobile industry analyst-become-blogger who does his own stats. Some of the charts are chilling.)

Tried to read a recent post there, but stopped after the statement “Nikon just recently said it plans to launch its own smartphones”.

That looked like big news, so I looked it up. Turned out, Nikon's president said something along the lines of “We want to create a product that will change the concept of cameras. It could be a non-camera consumer product” early July—that is the most reliable citation on the matter I could find.

So it was author's speculation, which he presented as fact on his blog. Maybe there is some useful information there, but the hassle of verifying each statement wasn't worth it for me.

Tomi Ahonen is as anti-Nokia and MS as it gets, and hence I do not enjoy his blog. As his narrative stretches the truth a lot, and prime example is his Nokia analysis. Nokia was already in decline with Symbian, but go on his blog and he presents very contorted factoids.

Actually, Tomi's latest blog post series theorized that Ballmer wanted to buy Nokia, Gates vetoed this and that's why Ballmer's getting kicked out:

Gates looked at the real performance of this partnership. Gates said in public that Ballmer has made mistakes and singled out Windows Phone project as 'clearly a mistake' and so badly mismanaged, that recovery was no longer possible. Thats what Gates said on Charlie Rose in February 2013. This is when the decision was made to not buy Nokia. So we know, Ballmer wanted to buy Nokia, but Gates stepped in to override that decision. And at that moment, Ballmer's career as Microsoft CEO was ended (as I said on this blog). Gates gave Ballmer six months to quietly sort out his future but clearly said in February to Ballmer, get out. And Gates vetoed the Nokia purchase.

Now Nokia has been gutted, all its options destroyed, and its up the proverbial shit's creek without a paddle.

http://communities-dominate.blogs.com/brands/2013/08/ballmer...

Doesn't quite pan out in light of MS actually buying Nokia.

msft is buying "Nokia’s Devices & Services". nokia does other things as well, for example, nokia-siemens-network (NSN) is a significant player in the EPC (enhanced-packet-core) market as well...

Yep, this looks more like Sony buying Ericsson out (and leaving Ericsson with a very nice, profitable core business)

It is a sad day. I have been joking with friends that we should have a funeral in sunnyvale. Probably, though, that would be in poor taste.

On the upside for nokia shareholders, well, when nokia switched to windows phone, it was widely reported that "Microsoft bought Nokia for zero dollars" - now, at least, the Nokia shareholders are getting paid for it.

It was expected all along since Elop ditched Meego which was key to Nokia's success. It won't help Microsoft though, but expect a lot of damage from this. Nokia already attacked VP8 codec with their patents. Now Microsoft will use all Nokia's patents to bring patent trolling to new heights.

Not sure how not ready, not shipping on devices, no app support makes it "key to success". With that argument sticking to System 40 and System 60 would have made more sense.

Key to success since it allowed Nokia developing modern and versatile system. Not sure what you meant by no support and not shipping. It was cancelled, obviously. What kind of support do you expect from a cancelled system? Elop cut off that road for Nokia, and their independence was doomed ever since. It was probably the plan all along.

It's good that we have Jolla folks now, who continue Meego heritage. But now they will be increasingly threatened by Microsoft trolling.

Meego wasn't ready to ship, Nokia needed a different OS and Microsoft needed devices. Not ideal for either case, but I don't think a Nokia based on Meego with out the infusion of cash that came in from MSFT would have gone anywhere.

Everything one hears about Windows Phone is the "lack of apps". I suspect a system based on Meego would have been a bigger challenge for Nokia than the cash and backing that came from MSFT.

>Meego wasn't ready to ship, Nokia needed a different OS

Nokia had a transition from Maemo to Meego in Harmattan. Harmattan was not only ready to ship, it was shipped! While it was used, Meego could get ready to ship. But Nokia de-facto cancelled it as soon as it came out, since Elop was already in control. Nokia did not need a different OS. MS needed Nokia to say they "need" a different OS. Obviously MS owned one. But Nokia wasn't Microsoft back then. It is now, and MS probably planned that all along.

I feel like the N900 was very close to what they needed. Take that, give it "minor" features like support for portrait mode (!), give it some modern hardware with a capacitive touch screen, and I think they would have really had something.

I didn't like the UI refresh in the N9 as much. It felt like they took a few steps back.

It did seem like Maemo/Meego was mismanaged, which is sad because it did have potential. I have no idea what went on at Nokia, but my guess would have to be that they never fully committed to it; it was just somebody's side-project, and all the talk that it would be their next-gen primary platform was just lip service. As if nobody expected it would ever ship "for real".

But MeeGo did ship! And as far as I know the N9 got good reviews.

Microsoft is becoming more and more of an integrated software and hardware company than a purely software one. Maybe it's time to change the name to something without the "soft".

Or Microsofthard? I'm not very good at this.

How about: Microkia Softnok

Micro-stiffie

When the Windows NT kernel began driving mainframe-class hardware they weren't selling software for microcomputers either.

It's just a name.

They've been trying to ape Apple in consumer electronics for the last ten years. For some reason, they figure since Apple was making a butt-load manufacturing and selling their own Phones and Tablets, they should do that too. Meanwhile, Google follows the Microsoft OEM strategy and Android takes 80% of the market.

Google doesn't make the money on Android that Microsoft made on Windows though.

The business model is slightly different but what doesn't change is that there is a lot of value in controlling the dominant platform.

Yet Microsoft makes money on Android and Google doesn't make money on WP :).

> Yet Microsoft makes money on Android and Google doesn't make money on WP

As long as people buying WP devices are using Google search, or visiting websites that use Google's ad network, Google is making money off of WP, even if they aren't holding WP manufacturers to ransom over dubious patents.

10 years? I wish. Microsoft has relied on idiotic low-margin "partners" like Dell and HP to execute its ideas. Like tablets. I had a Toshiba tablet 10 years ago. Browsing was great, the rest of Windows, not so much. And the hardware wasn't neat. If MS had shipped a tablet 10+ years ago and actually cared about the end-to-end experience instead of just selling Windows licenses, we'd be in a different world.

Or like music players (instead they let Creative license the OS/audio+video software). Or like Media Center: great software, but PITA to setup, no simple OOBE like Apple TV, now it's been EOL'd.

Microsoft had over 80% of the smartphone market before. They are well aware of the Android OEM strategy. But I don't think anyone really LOVED their Windows CE mobile devices, so they know they needed to do better this time around. Just like most of the Android phones are crap and Google is now trying to clean that up.

I expect no name change this time. Microsoft will attempt again to buy Yahoo! under its new CEO, and become Microhoo!.

That was more or less expected...

But I think it is really sad too. I really enjoyed the pre-Microsoft Nokia, I had account in their dev forums, and loved their SDKs, community, Sybian, whatnot.

To me, when they suddenly dropped Sybian while they were still ahead AND expanding in some markets (like Brazil, Russia...) and switched to MS, it was really sad, and I felt like they dropped the ball.

Their Lumia phones DO pull some interesting hardware sometimes, but it was never the same.

Now with MS outright buying them, not only the ball is dropped, but kicked way out of the stadium.

> I really enjoyed the pre-Microsoft Nokia, I had account in their dev forums, and loved their SDKs, community, Sybian, whatnot.

Really?

I thought their SDK circa 2007 (especially the emulator) and API docs were terrible, and Symbian C++ was a real pain to work with. Also, segregation between regular developers and Nokia partners (who paid to have access to extra private APIs) put unnecessary barriers to development.

I won't miss it.

The defunct smartphone OS was named Symbian. Sybian is a sex toy brand, I believe.

You're the first person I've ever heard praising the Symbian SDK. It was a miserable mess without clear ownership or direction - Nokia made the UI while Symbian Ltd made the base OS, and neither gave a damn about third parties unless they had bags of money for special API access.

Seems like it could be a great move, but it raises some questions. Given Microsoft's perspective, they know they need to increase Windows Phone share. The iPhone is on its way to become a niche device, so I doubt they would look to Apple and try to turn Microsoft+Nokia into the one-stop-shop for Windows Phone devices like I've seen speculated in many places. That's too big of a gamble. Instead, I think they'd model after Android, which now has 80% of the market, and continue strong on the OEM route, with Nokia-based devices just acting as a leader. The way I see it, this aligns much better with what's worked historically for Microsoft and what shareholders expect, especially given the Surface blunder. At least I hope so.

The problem is that Samsung, HTC and LG are all focused on Android, and Microsoft needs to change that. Can the Nokia buy help with that? I wonder. What would stop Microsoft from using Nokia's patents aggressively (rather than defensively) to "motivate" the other phone manufacturers to produce, market and license more Windows Phone devices, or face additional lawsuits against their majority-Android lines? Nokia alone didn't have the incentive to push to increase WP share outside their lines before, and Microsoft appears to already have a strong patent portfolio for mobile (source: http://en.wikipedia.org/wiki/Smartphone_wars). If so, this deal could be especially sweet for Microsoft, and also could benefit Nokia too, since it would retain premium WP status when a true third ecosystem develops. Thoughts?

To everyone speculating about what this means for the possibility of Elop succeeding Ballmer: this means that Elop is succeeding Ballmer. End of story.

edit: I would love to know why this is getting downvoted.

edit2: fair enough.

Two key facts:

1. Microsoft needs a new CEO.

They have a limited pool to choose from. The following are seemingly reasonable candidates:

- Mark Zuckerberg (never going to happen, he wouldn't agree to it)

- Steve Sinofsky (that ship has sailed)

- Tony Bates (seems like a reasonable choice; relative outsider, smart, has a tech background)

- Another member of Steve's SLT (some would be better than others. I think a sizable portion of the company would revolt if KT was chosen).

- Sheryl Sandberg (doubt it, since I think she's gunning for the US Senate)

- Carly Fiorina (MS's board would never agree to it)

- Stephen Elop (reasonably obvious choice: insider, devices experience, has CEO experience, but there's that pesky Nokia thing)

2. Microsoft has a new, relatively large, soon-to-be-on-the-board activist share holder in ValueAct. ValueAct will have a significant amount of authority over yea'ing or nay'ing acquisitions and over who the new CEO will be.

I can't imagine there's any way Elop would agree to working under someone else again. He also seems like a not-unreasonable choice for CEO of Microsoft, outside of the fact that he hasn't exactly made Nokia back into a rip-roaring success, and doesn't represent much of a change from business as usual at Microsoft.

I'm not down voting you, but "end of story" is not a great way to begin a dialogue on your unsupported opinion.

How come Paul Allen left MS and never looked back?

Non-Hodgkins Lymphoma and a really bad falling out with Bill.

Why would Zuckerberg or Sandberg be good candidates from Microsoft CEO? Don't get me wrong, I'm not trying to slight Facebook, but in my mind Facebook and Microsoft operate on two completely different wavelengths. I'm confident they wouldn't perform poorly, but I find it hard to believe they could provide the type of leadership and vision Microsoft needs right now. I'm just interested in hearing your thinking.

Also not really thrilled about Carly Fiorina, didn't she gut HP R&D division? I'm not sure your list is actually serious. Either way I'm doubtful Elop will become CEO given that he wasn't really able to make anything good come from Nokia.

I was going for either people who are 'hip' enough or 'steady' enough to run Microsoft. Fiorina would be a total, unmitigated disaster.

Yeah, I strongly agree. I never understood why people think Sandberg or Zuckerberg would every be considered by the board. Facebook is such a totally different business to one building software and hardware for operating systems, office tools, web and email platforms, cloud services, systems management, identity management, mobile platforms, gaming platform development, unified communications, collaboration software, CRM, etc. etc. etc. (the list goes on and on).

A much better fit would be someone from Oracle or IBM. Or even someone from a large enterprise systems company with deep software background (e.g. someone from SAP, Cisco, CA).

That assumes you want continuity with Ballmer.

What ever I have seen in the media was bring in bunch of known names of execs in tech space and start speculation. They do not have any official hints or reliable sources guiding them. How about Mr.X. The whole argument can be discredited from the fact Ms.Sandberg is being discussed along with Mark Zukerberg, can we be reasonable people here. You might as well pick your local butcher to spice up the discussions.

I am being reasonable. I'm saying Elop will be the next CEO.

Are you a Bayesian? If so, what's your actual probability estimate? I think people are objecting to "will be" which indicates 100% certainty, and 100% certainty is not a rational position for anything, much less predicting a company's future CEO.

To put it in context, even if this is exactly MS's plan, you're stating that within the next 12 months, there's a 0% probability he'll have any sort of accident. Wikipedia says he's an avid recreational pilot. No one in their right mind would provide a 100% estimate on anything, much less Elop being MS CEO.

You must be tons of fun at parties.

I think Diane Greene would be a much better choice than anyone on your list.

Zuckerberg, Sheryl, Carly?? Seriously? I hope you are not on MS board of directors.

Nokia Solutions and Networks still makes plenty for money so they aren't dead quite yet. I think this makes sense for Microsoft seeing as how the redesign of Windows phone hasn't made back the money they put into it. It's becoming unprofitable for windows phones to be made so they are ensuring they have hardware.

Among many other things, with this, MS can now compete with Google Maps. Although they already had a partnership with Nokia, having them with a tighter team integration is a different story. I am sure both MS and Google will do drastic innovations with this renewed competition.

I hate to say that, but I told you so! :-D

More than two or more years ago, I wrote in different places, and probably in HN that when Microsoft partners he is always the winner, and the other is the looser, and that Microsoft was going to buy Nokia at a discount in the future.

History repeats itself.

So, it's lesser than the price for Skype? Wow. This makes no sense to me though. I mean Nokia has a lot more value than Skype!

Yes, hard to believe they paid more for Skype!

Clearly Elop agreeing on the acquisition by Microsoft was contingent on Ballmer resigning from Microsoft, Setting Elop up as the next CEO of Microsoft. So, not only was Ballmer fired, his replacement has likely already been chosen.

More here: http://www.microsoft.com/en-us/news/press/2013/Sep13/09-02An...

This is a great move - for Nokia. Now Nokia has a huge pile of money to take on Huawei, Ericsson and Cisco etc in the mobile network field. Remember, Nokia bought out Siemens from NSN as recent as July this year:

http://www.businessweek.com/news/2013-06-30/nokia-said-to-ag...

With the money from the MS deal, the headache of a failing mobile phone business while retaining the patents and maps I think Nokia will be in a much better position witch a clearer focus.

Nowadays I measure acquisitions in Instagrams. At $7.2B Nokia cost Microsoft ~7 Instagrams. That sounds crazy when you think that Instagram had 13 employees, compared to 30000 employees moving to Microsoft from Nokia.

Nokia sold to Microsoft for ~$1.5 billion less than what Skype was sold for

It is $7.17 http://allthingsd.com/20130902/microsoft-to-buy-nokias-devic...

But still less than $8.5 paid for Skype. (Which I think is total waste of money)

Well it's not all of Nokia.

Skype accounted for an ungodly 167 billion international call minutes in 2012. It is perhaps not fair to belittle them.

No, but it still makes me sick, because Microsoft had Skype capabilities a decade before Skype. NetMeeting, then MSN Messenger supported audio/video. Messenger even had telephone integration to call out, but poorly done (some shitty partnership that made you buy an account with MCI). They had SMS integration to a better extend that Skype does today.

But MS's MSN/Live division was so terribly run, they missed out on turning MSN into a social network (FFS, they had everyone with their friend relationships already via Messenger!), and the Messenger software didn't promote audio/voice very well, nor did the session establishment stuff work well. They sat around for over a decade and let other people overtake them for no reason other than having terrible management. (Wave 11(?) had an installer that literally took over 30 minutes, as management wanted to search your entire disk for stuff.)

The deal is also very interesting as it clearly points to what the board of MS sees as the future - to truly become a device vendor. They have had success with Xbox, but failed with Zune and first generation Surface.

Can they really transform MS into a prosperous device company while not alienating their partners and affect their core enterprise SW business? I have my doubts and that they don't acquire the patents, just license them makes their position imho much weaker.

Also, the new Nokia feature phone, will it even appear on the market now before being killed?

Theory: Nokia went to Microsoft and said "we're going Android". This was the (intended) result?

Nokia was not acquired by MS, Nokia sold them their burning platform, their phone department.

Please correct the title on this post - Microsoft is only acquiring the devices and services branch of Nokia - they do have other departments (e.g. mapping).

What would this mean for all the Nokia feature phones ? The latest Asha series was very good and selling pretty well atleast in India. How would this figure in MS strategy? Are they going to ditch it? That would be sad, because Nokia still makes phones that can withstand rough use.

On the other side would Nokia start manufacturing Laptop in future. I would really like Nokia design team to come up with a good Windows laptop!

I'm wondering the same. My main phone now is an Asha 501 — great phone for a light user who wants a small, light device with a long battery life.

What else is part of Nokia other than their 'Nokia Devices & Services'?

- here.com maps

- mobile broadband

- r&d

citation: http://press.nokia.com/2013/09/03/nokia-to-sell-devices-serv...

Nokia Siemens Networks (NSN) is also not small

No longer Nokia Siemens Networks. Nokia recently bought out their share from Siemens, and now called "Nokia Solutions and Networks". It's been a solid revenue generator for them.

Just like Motorola which has a lot of cell tower/radio networking etc. that is didn't sell to Google, Nokia is a huge player in base stations/NodeB's, etc. that it's not selling.

> What else is part of Nokia other than their 'Nokia Devices & Services'?

As of recently, all their enterprise/industrial gear: DSLAMs, muxes, 3G/LTE gear, carrier hardware, etc. when they bought Siemens share of Nokia Siemens Networks (NSN), noting that Nokia was originally flying solo with this stuff before the JV with Siemens.

So now the Nokia employees who aren't let go can now experience the pleasures of Microsoft Stack Ranking.

3 walled gardens is a very, very bad thing. Couple this with what Google's doing with the new Play Services and Motorola and with what Apple's been doing the entire time, and we could be in for a world of hurt when there are no "open" platforms (as in, for OEMs to build for).

2013 is the debut year of Firefox OS, Ubuntu Touch, Sailfish OS, and Samsung's supposed flagship Tizen phone. Now, the question is if carriers, consumers and OEMs will respond to them with any enthusiasm, or treat them like third parties in American politics.

That would depend entirely on how they present themselves. If those players decide to come off like Linux on the desktop does (where "open"-ness is the main selling point, something utterly irrelevant to people who aren't a particular breed of techie), nobody will care.

Nobody ever successfully sold a platform based on its political leanings.

Very interesting, since Stephen Elop was tipped to replace Ballmer after his departure.

I think the real coup is the access to the dumb phone market in places like Africa and India where Nokia is strong today but where their growing middle class will want to move to smart phones over the next 10 years.

Actually, I'd be really interested to see if Microkia could pull it off, could make an awesome phone that seriously challenged the iOS/Android hegemony. I think they have the resources to be able to do it in a way that Mozilla or Ubuntu or any other strictly software/no experience in hardware company could do. And if Microsoft can reinvent itself and snatch victory out of this, then that means the market is actually wide open. Ultimately, I'd like to see a true, open source, Linux phone, and Microsoft quite ironically could do a lot to prove that one could be successful.

In other words, Microsoft gets to take chances that anyone else gets to learn from. More competition is a good thing.

I feel like there are fundamental problems with MSFT (or INTC)succeeding in the mobile world

After the platform wars of 90s, the industry has scars (70% of economics went to two vendors - MSFT and INTC - Wintel)and would not want any potential repeat of the history

In many ways, ARM Holdings is anti-Intel. Same way, one can claim that Android is anti-Windows model (in many respects)

I am really curious what will happen here - and who are people in U.S. who still don't own a smartphone? (still 39% of the population - http://mashable.com/2013/06/06/smartphones-61-percent/)

Why would MSFT highlight the fact that the cash is coming from overseas in the PR? Is there a tax benefit to doing something like that?

Specifically:

Under the terms of the agreement, Microsoft will pay EUR 3.79 billion to purchase substantially all of Nokia’s Devices & Services business, and EUR 1.65 billion to license Nokia’s patents, for a total transaction price of EUR 5.44 billion in cash. Microsoft will draw upon its overseas cash resources to fund the transaction.

http://www.microsoft.com/en-us/news/press/2013/Sep13/09-02An...

It doesn't have to pay US taxes on money overseas to fund the transaction.

That's interesting.

"From January 2008 to September 2010, Elop worked for Microsoft as the head of the Business Division, responsible for the Microsoft Office and Microsoft Dynamics line of products, and as a member of the company's senior leadership team. It was during this time that Microsoft's Business Division released Office 2010.[15]"

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

Don't believe he'll be the next CEO but certainly a possibility given his previous engagement with MSFT...

Elop: Mission accomplished

It'll be interesting to see what happens with Windows Phone from here. As far as I know, nobody except Nokia was doing 'better' with WP than Android, and didn't seem to be putting much effort into it really. I imagine they might be further deterred by Microsoft buying the dominant manufacturer too. This seems to put all the momentum of WP with Microsoft, and it seems like the only real place to go from here is competing with the iPhone/iOS head on.

Gee, we didn't see that coming.

... and this is the part I say "I told you so".

Elop never really left Microsoft. All he did at Nokia's helm was to trim down the company to facilitate this acquisition.

So a has-been has been acquired by another has-been. Together they will unseat the Apple/Google juggernaut by beating IOS/Android.

No, I don't believe it either.

In Tel Aviv we have the Nokia stadium (that's because Nokia sponsored the reconstruction of the thing); will we now have a Microsoft stadium instead ?

Always loved #Nokia's design but hated their sw. One of my favorite designed phones EVER will always be the E71 http://bit.ly/14nbnC7 On that note, Microsoft should buy Blackberry too. Nokia design & hardware +WinPhone8 software +Blackberry's customers might be a winning combination.

7.2 Billion USD for Nokia sounds like a much better deal to me than 12.5 B for Motorola. Kudos to MSFT on finally making that move!

iPhone destroyed Microsoft, BlackBerry and Nokia high end smartphone products. Android crushed the rest. End of story.

Wow. So he kept nokia stagnant while samsung and apple exploded in the smartphone market and now he gets to be CEO of another company thats been stagnant for years(he was already passed up for being CEO at MSFT before he left to nokia). I guess microsoft's strategy is to keep chasing after the devices market.

I'm not sure what world your on. Elop would not have been in the running as CEO of Microsoft. I don't believe he would have had enough experience at that time. Was there anybody other than Ballmer and ray Ozzie epwho would have been considered.

He's actually brought Nokia back from the brink and kept a sinking ship somewhat afloat, in my opinion. At the same time, I don't think he is enough of a visionary to lead Microsoft.

> He's actually brought Nokia back from the brink and kept a sinking ship somewhat afloat, in my opinion. At the same time, I don't think he is enough of a visionary to lead Microsoft.

I share the same opinion. I think Elop cops a lot of flak from mobile enthusiasts, but the Nokia he took over had a lot of downward inertia that he needed to overcome and their new devices are actually pretty nice. They might never catch up (although I hope they do) on the ecosystem front. I believe that Nokia + Android and/or Nokia + Maemo were untenable, especially given the internal software politics Nokia was known to suffer.

Ok well...MSFT could either choose to focus on enterprise or pick up Nokia and their CEO as a pat on the back for only losing 25% of its value every year. This plan seems more like a hail mary to catch up to apple. It could pay off but its certainly the riskiest and least logical route. I think there's significant room for innovation and profit in enterprise tech right now and much more room for failure in mobile.

Giving up in the mobile space isn't an option. In these situations, Microsoft had to take action. If they just give the mobile sector to apple and google, they also potentially weaken the windows ecosystem itself.

Microsoft may be slow, but they have enough momentum to make a small dent in the market and grow from there.

Taking risks is a necessity.

Here is the Microsoft Strategic Rationale presetation: http://www.facebook.com/l.php?u=http%3A%2F%2Fwww.microsoft.c...

This also probably means that Nokias very good map technology will now merge into or replace Bing's.

My initial thought was "didn't that already happen?" It's an easy mistake to make.

Wow, interesting timing. I wonder if Elop will end up in the running for CEO of MS as part of this.

PLease microsoft..just make Visual Studio free and you will lead mobile market in no time..

They already have a free version for creating WP apps.

The fall of giant. A domino effect may result in Samsung buying Microsoft in 3-5 years.

The title is wrong. Nokia is not being acquired, it's selling the phone business.

All the other comments are too focused on the front-end Nokia Lumia vs iPhone vs Android.

Microsoft buying Nokia is kind of the same as Google buying Motorola for 12 billion $ :

Nokia has 10k patents in the mobile phone world.

So a 10-year license to its patents has its importance

That pretty much means that the biggest owner of patents for mobiles does not manufacture them anymore. Thus the mutually assured destruction does not hinder them anymore.

I'm not surprised if we'll see a bunch of patent lawsuits against everyone else except Microsoft within an year.

Ballmer confirms what we all knew: Elop candidate for Microsoft CEO job http://www.engadget.com/2013/09/03/microlop/

If you wonder how the market reacted: http://nokiastock.tumblr.com/post/60266789816/here-the-answe...

This title is here more than 50% wrong. Microsoft bought Devices and Services business, and large portion of patents. This is about 50% of Nokia revenues, less than 50% of employees, and about 0% of the profits.

Anyone know price per share? I was not able to find it in the press release.

Nevermind. Nokia itself was not purchased by microsoft. Only part of the company (Devices & Services buinesss) was purchased.

It seems like this will be very interesting fight between Apple, Microsoft, Google, and Samsung in next few years. I assume the first three will do relatively well - the only looser here will be Samsung.

Why do you assume so?

What does this mean for Qt?

What do you expect it to mean?

[In March 2011] Nokia announced the sale of Qt's commercial licensing and professional services to Digia [1]

[1] http://en.wikipedia.org/wiki/Qt_(framework)

Nokia is still one of the primary developers behind Qt, or at least they were... has that changed?

It has changed. A Finnish company called Digia owns Qt completely and is the main developer. That's why Qt is now available even for Android and iPhone. The Nokia-MS deal does not affect Qt.

Considering the amount paid for Motorola by Google, isn't it cheap?

Google bought Motorola for 12.5 billion and then sold off it's Home division for 2.3 billion. At the time of the purchase, Motorola had 2 billion in cash so in the end, Google probably paid 8 billion ish for Motorola. Considering that in those 1.5 years, Moto and Nokia's values have been decreasing as well, I think they are pretty close in value.

Nokia 7.2bn$

Skype 8.5bn$

I think, it is reasonnable to say it seems to be a better move this time.

What does this mean for Nokia's remaining feature-phone business?

I was under the impression that there was still a global market for people wanting cheap, low-function, phones.

I was thinking the same thing. What is Microsoft going to do with that part of the business, that's the part that's doing well.

Nokias feature phones are still huge in Africa and large parts of Asia. If Microsoft is just going to ignore that part of the business, then they are opening the marked for the competitors. If they just bought Nokia for their smartphone, then they are making a giant mistake.

I think they will operate it as long as it runs a decent profit.

this makes Elop the most dangerous trojan horse of all times

Anyone else see this and think of their Nokian Tyres? Nokia has an interesting history, including owning Nokian which makes some very good winter tires.

"hi everybody, i'm bill gates. buy this phone and 15 dollars will go to support malaria research".... is what i want to see on tv.

Well, RIM is now RIP. Microsoft was their last hope

If you think this gonna bring better phones, with better OSs, you're wrong. Look back into the history of these companies.

For less money than they spent on Skype.

Misleading title - Microsoft acquired the handset division; Nokia lives on in infrastructure and maps.

I wonder if it's the last present Ballmer left to whoever succeeds him, or the last spat.

maybe it sounds irrelevant, but always i wonder that, why Nokia pays less attention to Linux, a Finnish company and an OS born in Finland? Only a few Nokia devices run some kind of Linux and i think they are not so bad (my favorite is N9, btw).

Once more we marvel the prophecy of this designer: http://stocklogos.com/topic/past-and-future-famous-logos First he predicted next Microsoft logo, now Nokia. Bravo!

> Nokia Windows Phones the fastest-growing smartphones in the world

Huh?

Expensive signing bonus to pick up their new CEO?

Why is this not reported in mainstream media yet?

The release came out 15 minutes ago. They are simply not that fast.

Because most people in Europe and North America have to wake up first? ;)

I concur, I'm just awake, good morning.

At the time of your comment, it was already on the Wall Street Journal and on Rueters. Within the next 20 minutes it was on Forbes, BBC, New Zealand Herald, and Synfney Morning Herald. 10 minutes after that, it was on Seattle Times and ABC.

Now we find out if Failure has a critical mass.

CEO reverse acquisition? Elop 4 MS CEO 2014?

This was pretty much almost expected. What microsoft did was made nokia very much dependent upon microsoft. Then it buys it, a stroke of genius i tell you.

Might I know the reason for the DownVote ? I just presented my observation , if you disagree then please by all means let us have a gentleman's discussion.

Cue Snake on Windows RT jokes

Well, it finally happened...

damn. would have really like to see an Nokia based android phone.

I called this on Friday after looking at the stock market. Too bad I didn't bet too much money on it, but I still made a bunch :)

http://stocktwits.com/bluercloud/message/15522482

http://stocktwits.com/bluercloud/message/15522546

By the way, this looks like an acquihire for Elop being the next MSFT CEO.

I wonder who knew?

I love this. Virtually irrefutable evidence of insider trading, and everyone goes "meh".

Happens all the time.

1 living dead + 1 living dead = ...

an unproductive comment on HN?

at least you're honest with yourself!

Hey guys, stop it, April 1st is like 8 months away!

Ohh my GOD... now MS introduces the bugs, not only in OS, it will be in phone HardWare also.

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