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Comment by vnglst | Hacker News Reader

I don't really understand how this works. Microsoft bought Nokia for about $7B[1] and now Nokia pays more than twice that amount for Alcatel? Where is this money coming from and why is Alcatel worth so much more?

[1] http://www.businessinsider.com/microsoft-closes-nokia-acquis...

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Nokias handsets was a failing business, or at least seen as such, building networks is a growing business. There are still large parts of the world that does not yet have a mobile phone network, or where networks are still being upgrade.

The "new" Nokia is Nokia Networks (http://networks.nokia.com/), so it's the company that supplies the ISPs with their infrastructure.

And as more people go mobile, more towers and backbone is needed to further subdivide the cells to maintain bandwidth.

Microsoft bought Nokia's handset division (roughly half the company) and the right to use the Nokia name for a limited time. They didn't buy the whole company.

Microsoft only bought the handset business from Nokia, they didn't purchase all of Nokia. In fact, as I recall, they only got the right to use some of the brand names for a limited period of time.

Right, that makes sense! And the Alcatel that Nokia is buying here, is much more than a producer of phones.

Actually the Alcatel-Lucent they bought do not produce phones at all ;) A while ago Alcatel got with TCL, a Chinese company, to take care of the handset business through a joint-venture initially. Then TCL bought and integrated the JV, and kept the rights to the Alcatel brand for handsets. The brand is likely to stay but it's now fully TCL (with still some ex-Alcatel employees).

Nokia Networks has been very separate venture from the better known Nokia-mobile. It was previously a joint venture between Nokia and Siemens known as NSN (Nokia Siemens Networks). In 2013 Nokia bought rest of the stock from Siemens and renamed it Nokia Networks.

Yeah former Nokia Networks employee here, that whole NSN thing was a big mistake.

I'm also former Nokia Networks: I would not say the "whole" thing was a big mistake. I could understand the business sense. Some parts of merger worked better and some were worse. Myself, I got a new boss from Siemens who was a good guy. Got laid off later on, though. Overall, the execution of that merger seems to have been better than the Alcatel-Lucent merger a year earlier. Nokia Networks is actually alive, which is much better than what I thought back in 2006. And not only alive, but actually doing rather well (at least until this).

The bad feeling I have about this is that in the picture, Suri shakes hands with Hollande. That tells how political the deal is, and how wrong it can go (with all that protectionism etc).

On the other hand JTB says this is not good, so I have the instinct reaction that it must be good.

I remember that culturally Siemens saw itself as a oil-tanker plowing through, and Nokia saw itself as a nimble and agile fish school. No wonder it ended up where it did, if the cultural differences in the way of working was so different.

Microsoft bought Nokia's consumer cell phones division.

Nokia is also a telecommunication equipment designer and manufacturer (since long before cell phones even existed) similar to Ericsson, Huawei or Alcatel-Lucent. They also got into nav/geomapping after buying Navteq (then Ovi, currently HERE) but that's probably getting spun off.

Don't forget that Microsoft('s lackey) took care of lowering their value as much as possible before buying the Devices and Services unit for some spare change.

Come on. Nokia was doing a fine job of lowering the value of their handset business on their own.

He is absolutely right.

For those of you in the downvote mood please search about the hidden bonus given by NOKIA's board to Elop in his original contract for selling off phone division and then carefully evaluate the steps he did. His execution was almost perfect in the light of this "small part" of his contract.

Yeah. It wasn't Elop who created one of the most dysfunctional software development units ever. He was brought in when the damage of previous bad management was just becoming fully apparent.

Nokia in 2007-2010 was spending many times more than Apple on R&D. For that money, they got multiple infighting operating system teams each developing their own half-baked thing (Symbian, MeeGo, Qt, S40) and device teams that were building uncompetitive devices on top of 3-year-old software.

For anyone interested in this (very good) story, you can read about it here: http://taskumuro.com/artikkelit/the-story-of-nokia-meego

Two words: burning platform.

http://communities-dominate.blogs.com/brands/2012/06/the-fin...

There was just no reason to write a memo like that. It destroyed their business, almost singlehandedly, and no, I'm not exaggerating. The consequences of that memo were insane: Nokia's handset sales died all over the world all at once.

We don't have more than quarter-level visibility. All we know is that Q1 2011 sales crashed and Elop wrote his memo. Which is the cause and which the consequence?

In Q4 2010, Nokia stuffed the channel with outdated products. In a market that was growing accustomed to iPhone and Android, Nokia tried to sell consumers products based on the first touch edition of Symbian S60 -- the same software that was considered outdated when it first shipped in Nokia 5800 years earlier. (Because of the way Nokia's product development pipeline worked, the mid-range phones they released in late 2010 contained software that was several years old.)

Isn't it possible that Nokia's Q1 2011 sales crashed simply because the channel was full of Symbian phones that just were not selling? As CEO, Elop would have visibility into that when he wrote his infamous memo.

A point against the "evil memo destroyed sales" theory is that purchasers at large operators don't turn on a dime. When they stopped buying Nokia's phones in Q1 2011, the decision was already made earlier.

The fallout from that memo was instantaneous and widespread. I worked in wireless at the time and everyone I knew at all of the carriers began to pull Nokia inventory. This was not true in many markets.

Even if the burning platform concept was correct, releasing it in a companywide email instead of strategically shifting the company and then announcing the change in a measured, considered fashion would've been much better for their cash flows.

Purchasers at large operators don't turn on a dime, usually, but I would argue that the CEO of a handset manufacturer declaring their entire existing lineup of products is going to be discontinued in viscerally graphic terms is one of the things that might spur such quick change.

> There was just no reason to write a memo like that

There was a very good reason to write it. Internally Nokia was delusional and confused, and desperately needed a wake-up call. Nothing less would have sufficed.

Nokia was delusional internally, but can you really make an argument that what they did was reasonable? Is there any world where it was better for them to choose Windows over Android?

That only happened because of Elop's previous Microsoft connections and it was clearly the wrong decision for the shareholders of the company.

"By every measure that the industry uses, Nokia Symbian smartphone sales grew from Q3 of 2010 to Q4 of 2010, literally the last full quarter before Elop released his Burning Platforms memo."

Q4 sales were higher than Q3 sales? I'm, uh... how about year-over-year comparisons? A seasonally-adjusted smoothed trendline? Anything OTHER than comparing sales figures in one quarter where there's Christmas and one quarter where there isn't?

Qt was bought in part to attempt to bridge Maemo/Meego and Symbian. Problem, in part, was that previous Maemo versions, as well as Intels Moblin project, used GTK. With Maemo5 you had a massive culture clash, that pretty much ripped the community down the middle.

Then the CEO was ousted, Elop brought in, and shit really hit the fan.

Then again, maybe Maemo should have just died at that point, rather than be resurrected as Mer/Sailfish. The whole thing produced ripples that seems set to yank the larger Linux community apart.

While Maemo was Debian in a mobile device, Mer/Sailfish at this point is as close to that as Android is.

    While Maemo was Debian in a mobile device, Mer/Sailfish at
    this point is as close to that as Android is.

Which is truly tragic. I'm not sure if many have experience using Maemo5 (especially the community build) but it represents the apex of phone operating systems in my opinion. Nothing is as pleasant to use, and to think that devices it was built for max out at 256MB of memory.

This is why the Neo900 is so interesting and needed because for the first time, we could get modern hardware in the n900's perfect case, with the community Maemo OS. I just wish it was easier to develop for that operating system >_<

Yes, but Symbian development was spinning up again, MeeGo had an amazing potential. WP was absolutely not ready to be sold.

I was working at a place trying to do smartphone type stuff with symbian way before it was cool and have been a MeeGo fan since the days when it was called Maemo so I'm about as a big a fanboy of both as they come.

But the truth is that Symbian had simply been stagnant for too long and would never catch up and MeeGo for all its potential was just another platform with even less backing than WP and even less ready to be sold. Had they decided to really go for it with on of Symbian or MeeGo a few years earlier and gotten on the smartphone bandwagon then I might have my MeeGo Lumia device I so wanted, but they didn't and by the time they realized their mistake it was too late. As much as I hate to admit it and as much as it didn't necessarily work out very well, going with WP was probably a good decision at the time

Yeah, it's true that the stagnation was a huge letdown, but when N8 and later 808 came out, I strongly believe the OS was (and still is to a degree) competitive. Incomparably more so than WP7 devices which first came out around the time of 808 as well.

Just out of curiosity, what do you mean "smartphone type stuff"? Symbian has been a smartphone OS since its inception.

The iPhone set a new standard for smartphones. Symbian did not compare.

A new standard in "feed me entertainment!" perhaps.

At launch of iPhone Nokia had featurephones that were more capable.

You are maybe talking past each other a little. It wasn't case the case that the phones just lacked an app store. What really sucked about Nokia's symbian phones was the UI and the price tag. Now that's the fault of dysfunction within Nokia and not the fault of Symbian per se, but the fact remains if Nokia had just switched to Android it would likely still exist as a mobile phone company.

The argument against going Android was to avoid being another "me to" company. Back then the mantra of the Nokia leadership was "differentiation" (it was basically their response to why they could not open source the power management on the N800).

And if one look at the current Android market, they may be right. Samsung is only where it is right now because of a massive marketing push in the last few years.

@Sammi

Did not compare in speed/pretty animations, collection of "apps", and marketing. What else? Would you like me to list how doesn't the latest iOS compare to latest Symbian?

Did not compare in speed/pretty animations, collection of "apps", and marketing.

So you're saying it was slow, kind of ugly, had no apps and the brand was so tainted that nobody wanted it.

Don't you think those are good reasons for abandoning Symbian?

No, I'm not saying that. It's "slow" in comparison with whatever iPhone was out back then, but hardly slow in general. The same as Android is "slow" compared to latest iOS and WP. That argument is silly, sorry. Not to mention the speed was in part due to the low-performance hardware they used. I don't care about "pretty", I care about "functional". It had majority of necessary features built in. It wasn't tainted and nobody wanted it (the 808) because there was virtually no marketing for it and because it was simply unavailable on some major markets. Almost as if they didn't want it to sell.

So no, I don't think those are good reasons for abandoning any OS. Not for power-users anyway. iPhone is better in media consumption, that's it and that's what majority is after. And bandwagons, obviously.

Symbian may have been stagnant, but unless you are a Wall Street day trader you didn't much care. Symbian could demo capabilities that iOS and Android are just now sprouting (and the press is going gaga about it as if it is something completely new groan).

My best friend got an E90 shortly after it came out. I was so jealous of him for ages.

The dialer was particularly awesome. It was the first time I saw a dialer that a) had untrained voice dialing and b) had vocal caller ID.

I had untrained voice dialing IN GREEK for years on my Nokia 701. And it actually worked correctly!

My brand new kitkat-soon-to-be-lolipop device cannot even voice dial English names.

Every little bit helps!

Nokia were doing awesome right until then! I fricking loved Symbian, so much better than Android/iOS. Oh. wait, no, it actually was complete garbage. But yes, Elop ruined their kick-ass smartphones. Gimme a break.

:-)

I think that the truth is that: 1. The Finns got too cocky for their own good. 2. The forget to monitor the other guys. 3. Apple predictably made a smartphone (years after the ipod) and made a silly amount of money, and was dominating the high-end segment after a really short while. 4. Google decided to own the mobile ads market, and basically just not care about the hardware, and was starting to dominate virtually every other segment. 5. Nokia had a few platforms, some apps, and only the dying feature phone market, and they realized this.

They would have had a chance (maybe) to go for Android, but judging by for instance Sony (that I think build the best phones. period. ) it is really hard to compete with high-end stuff against Apple.

It's shares only (all-stock) deal. No cash changing hands. Did you read the Recode article?

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