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Comment by rayiner | Hacker News Reader

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...

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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.

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.

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.

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?").

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.

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.

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.

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.

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

"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.

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.

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..

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.

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.

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.

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?

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