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Microsoft to buy Nokia's Devices and Services unit

  1. #11


    Toronto
    Posts : 82
    Microsoft Windows 7 Enterprise 64-Bit


    Hi Everyone,

    Analysts: Microsoft Bought Nokia Because Nokia Was Going To Stop Making Windows Phones


    Last night Microsoft bought the smartphone division of Nokia for ~$7 billion. Nokia will present to is shareholders in November, and both companies expect the transaction to close in the first quarter of 2014.
    So, why did Microsoft do this deal?
    Two analysts, Ben Thompson of Stratechary and Benedict Evans, assume that Microsoft had to buy Nokia because Nokia was going to stop making Windows Phones very soon.
    Thompson writes:
    I have argued that Stephen Elop made a massive strategic error by choosing Windows Phone over Android; coming from Microsoft, he failed to appreciate that Nokia’s differentiation lay not in software, but in everything else in the value chain. It would have been to Nokia’s benefit to have everyone running Android, including themselves. Everyone would have the same OS, the same apps, may the best industrial design, distribution, and supply chain win.
    Elop threw it all away.
    Today no one cares about Nokia’s industrial design, distribution, or supply chain, because their devices lack an app ecosystem, the price of entry into smartphones. Perhaps even now, Nokia was considering going to Android, or maybe even going out of business.
    And thus I believe we’ve arrived at the rationale for this
    I theorize that Nokia was either going to switch to Android or was on the verge of going bankrupt. (I suspect the latter: part of the deal included €1.5 billion in financing available to Nokia immediately, and the fact Microsoft had to take Asha but not the brand or maps suggests they were trying to keep the price as low as possible). And, had Nokia abandoned Windows Phone, then Windows Phone would be dead.
    Windows Phone has already been largely abandoned by other OEMs; Samsung and HTC make warmed-over versions of 6-month old Android hardware, and that’s really about it. Of course that will now stop, Microsoft’s protestations to the contrary, but regardless, without Nokia it would be over.
    And so, I would argue that this deal is not unlike the Motorola one, where I believe Google had its hand forced by Motorola’s threat to sue other Android OEM’s for all they were worth.1 Microsoft felt they didn’t have a choice.
    Evans says:
    "It’s been very clear that for some time that Windows Phone was not working. It isn’t failing, exactly - sales are drifting slowly upwards and it’s ahead of Blackberry in some markets (as though that was an achievement), but it sold 20-25m units in the last 12 months where Android sold 430m or so (and perhaps another 150m in China) and the iPhone 143m. It’s irrelevant in the scope of the industry, and for Microsoft that counts as failure. For Nokia, meanwhile, simple finance was an issue: Microsoft’s announcement says that operating break-even is 50m units, a long way off at current growth rates. So, something had to change…
    …the acquisition solves Nokia’s problem (running out of cash) and hence is a tactical move by Microsoft: it prevents the only significant Windows Phone OEM from exiting the market. It is possible that Nokia threatened to switch to Android otherwise (the relevant contracts are getting close to renewal), rather as Motorola threatened to sue other Android OEMs before Google bought it."


    Read more: Analysts: Microsoft Bought Nokia Because Nokia Was Going To Stop Making Windows Phones - Business Insider

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  2. #12


    Posts : 5,360
    7/8/ubuntu/Linux Deepin


    Interesting piece, the quote is too long.

    More like this so the author doesn't complain:
    Two analysts, Ben Thompson of Stratechary and Benedict Evans, assume that Microsoft had to buy Nokia because Nokia was going to stop making Windows Phones very soon....It would have been to Nokia’s benefit to have everyone running Android, including themselves...Elop threw it all away.

    ..the acquisition solves Nokia’s problem (running out of cash)... it prevents the only significant Windows Phone OEM from exiting the market. It is possible that Nokia threatened to switch to Android otherwise...
    Read more at:

    Analysts: Microsoft Bought Nokia Because Nokia Was Going To Stop Making Windows Phones - Business Insider
      My System SpecsSystem Spec

  3. #13


    Toronto
    Posts : 82
    Microsoft Windows 7 Enterprise 64-Bit


    Hi Everyone,

    All Microsoft Employees Should Read Stephen Elop's 'Burning Platform' Memo Right Now!!!


    If you're a Microsoft employee and you want to know what kind of strategic thinking Nokia CEO Stephen Elop is going to bring to the company in the former's $7.2 billion acquisition of the latter, then look no further than his famous "Burning Platform" memo to Nokia staff, written in February 2011. The memo describes in brutal terms how Elop saw Nokia's business — as an oil rig that's on fire, forcing workers to jump into the North Sea. Clinging to a "burning platform" only means certain death, in Elop's thinking for Microsoft at the end of the day...

    Read More: Stephen Elop's Burning Platform Memo - Business Insider
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  4. #14


    Posts : 5,360
    7/8/ubuntu/Linux Deepin


    Interesting idea from Tom here, the video interview bottom of the page is worth a look.

    We already have a team of senior former Nokia executives ready to run the business, and we are confident that we can attract the talent from those people who want to develop a competitive phone on the Android platform.
    By attracting key people (veterans) from Nokia who would like to develop a successful Android phone, Newkia potentially has the makings of something great.


    Former Nokia CEO founds Newkia, aims to create the Nokia Android phone you've always dreamed of - Android Authority
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  5. #15


    Interesting interview that...Nokia as a brand still have a lot of goodwill to trade on... unfortunately M$ has slowly tarnished that (kinda like Sony did with Ericsson - total arrogance IMHO)

    Although I have my doubts about Newkia being able to mirror the feats of Nokia and re-attain the brand name (in this competitive market with established players already, and mainly as I'm not sure how well structured that management team will be)

    ...but nevertheless, I completely agree with the idea of running Android on 'Nokia' hardware - if for nothing else the eco-system of Droid apps... makes business sense.. M$ store getting off the ground on windows phones?.. well they will have to sell a hellva lot more before they can compete in that 'space'

    ... M$ have and will support store dev's I'm sure to this end...but will that be enough?
      My System SpecsSystem Spec

  6. #16


    Posts : 5,360
    7/8/ubuntu/Linux Deepin


    Be interesting to see if Tom can get this off the gorund. Nokia is still a well respected brand. Match legendary Nokia design and distribution skills with the most popular os.

    He will need to assemble the right team, and get the finance. Plenty of rich folk in the Pacific rim , not just the mainland, they may well be interested in this.

    There are new players to contend with as well as Samsung, Xioami is going like a rocket.
      My System SpecsSystem Spec

  7. #17


    Yeah, I agree with that strategy - .. I'm sure with the right backing they could make a huge impact... eagerly waiting to see how it unfolds..
      My System SpecsSystem Spec

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Microsoft to buy Nokia's Devices and Services unit
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