Microsoft has acquired Nokia Devices & Services

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#889849 4-Sep-2013 18:27

semigeek: Will their phones be called "Micro Phones" now?

Nokia phones I expect. Nothing will change brand wise, but their mobile stuff will move forward more

alexx

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#889876 4-Sep-2013 19:41

semigeek: Will their phones be called "Micro Phones" now?

Depends on which phones you mean.

Reading the various reports, it appears that Microsoft gets to use the existing Nokia brand for existing models and gains ownership of the "Lumia" brand and continues to use the Nokia Asha brand on the low end phones (perhaps dropping the "Nokia" part).

But "Microsoft's licensing deal for the Nokia brand doesn't include future Lumias".
http://www.theverge.com/2013/9/2/4688530/microsoft-buys-nokias-devices-and-services-unit-unites-windows-phone

So that would mean no Nokia branded smartphones after the end of production of the current models.

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#889884 4-Sep-2013 19:59

tdgeek:
Technofreak:

Since Nokia started selling Windows Phone devices their worldwide market share of the smart phone market has shrunk from over 30% to about 5%. I don't see this improving just through Microsoft owning Nokia's handset/devices operation.

Wasn't that because Nokia dominated the featurephone, but did not join the touchscreen smartphone until relatively recently?

Do you call 2008 relatively recent? Nokia has been in the touchscreen smart phone business about as long as most other manufacturers.

The point being made was that even though Nokia's old platform, Symbian, was being slated by many it had a significantly bigger share of the smartphone market than Windows Phone currently has. One might have expected that the Symbian market would have flowed onto the Windows phone market. It hasn't, why not?

On a slightly different tack this below from the Wall Street Journal

More than seven years before Apple Inc. rolled out the iPhone, the Nokia team showed a phone with a color touch screen set above a single button. The device was shown locating a restaurant, playing a racing game and ordering lipstick. In the late 1990s, Nokia secretly developed another alluring product: a tablet computer with a wireless connection and touch screen—all features today of the hot-selling Apple iPad.

Former Nokia designer Frank Nuovo says the company had prototypes that anticipated the iPhone.

"Oh my God," Mr. Nuovo says as he clicks through his old slides. "We had it completely nailed."

Consumers never saw either device. The gadgets were casualties of a corporate culture that lavished funds on research but squandered opportunities to bring the innovations it produced to market.

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#889891 4-Sep-2013 20:12

jpoc:
alexx:
jpoc: It's quite sweet really. They can hold onto each other for comfort as they sink into oblivion.

Not sure about Microsoft, but the Nokia share price went up by more than 40% when the deal was announced.
http://www.channelnewsasia.com/news/business/nokia-share-price-soars/800516.html

Indeed but that is based on the fact that before the deal, a Nokia share gave you an interest in a successful and profitable cellular network infrastructure company with a great future that was tied to a sinking handset maker that had lost its way and had a murky future whereas, post the merger, that same Nokia share will give you an interest in the infrastructure company plus a huge pile of cash. Of course the share price rose.

In you own post you said Nokia (along with Microsoft) "can hold onto each other for comfort as they sink into oblivion", so I'm not sure what you are trying to say here? Was this week's deal a terrible one for Nokia (therefore Nokia sinking into oblivion), or a good one for Nokia?

I think it was good... they got rid of the part that was losing money and losing market share.
They kept the good parts (networks, mapping and patents).

The market would appear to agree.

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Technofreak

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#889894 4-Sep-2013 20:20

So that would mean no Nokia branded smartphones after the end of production of the current models.

Perhaps not. I found this interesting statement.

“Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current Mobile Phones products. Nokia will continue to own and maintain the Nokia brand. Under the terms of the transaction, Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current and subsequently developed products based on the Series 30 and Series 40 operating systems. Upon the closing of the transaction, Nokia would be restricted from licensing the Nokia brand for use in connection with mobile device sales for 30 months and from using the Nokia brand on Nokia’s own mobile devices until December 31, 2015.”

Nokia are restricted from licensing the Nokia name for mobile devices for 2.5 years from the time the deal takes place plus it would seem that from Dec 2015 there's nothing stopping Nokia from making their own mobile devices again.

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#889911 4-Sep-2013 20:40

Technofreak:

So that would mean no Nokia branded smartphones after the end of production of the current models.

Perhaps not. I found this interesting statement.

“Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current Mobile Phones products. Nokia will continue to own and maintain the Nokia brand. Under the terms of the transaction, Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current and subsequently developed products based on the Series 30 and Series 40 operating systems. Upon the closing of the transaction, Nokia would be restricted from licensing the Nokia brand for use in connection with mobile device sales for 30 months and from using the Nokia brand on Nokia’s own mobile devices until December 31, 2015.”

Nokia are restricted from licensing the Nokia name for mobile devices for 2.5 years from the time the deal takes place plus it would seem that from Dec 2015 there's nothing stopping Nokia from making their own mobile devices again.

Yes, well spotted and perhaps this is part of the reason for the deal to include the sale of the Asha range.

Once the deal in final, Nokia will have no smartphone or feature phone manufacturing, sales channels or product development facilities (or agreements with third parties) and in late 2015, they would essentially be starting from scratch. Perhaps they can license the brand name or something, but it would be a very difficult road back to phone production at that stage.

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#889927 4-Sep-2013 21:04

Once the deal in final, Nokia will have no smartphone or feature phone manufacturing, sales channels or product development facilities (or agreements with third parties) and in late 2015, they would essentially be starting from scratch. Perhaps they can license the brand name or something, but it would be a very difficult road back to phone production at that stage.

Yes and No. Check out what/who Jolla are, what they're up to and where they came from.

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#889955 4-Sep-2013 21:50

alexx:
jpoc:
alexx:
jpoc: It's quite sweet really. They can hold onto each other for comfort as they sink into oblivion.

Not sure about Microsoft, but the Nokia share price went up by more than 40% when the deal was announced.
http://www.channelnewsasia.com/news/business/nokia-share-price-soars/800516.html

Indeed but that is based on the fact that before the deal, a Nokia share gave you an interest in a successful and profitable cellular network infrastructure company with a great future that was tied to a sinking handset maker that had lost its way and had a murky future whereas, post the merger, that same Nokia share will give you an interest in the infrastructure company plus a huge pile of cash. Of course the share price rose.

In you own post you said Nokia (along with Microsoft) "can hold onto each other for comfort as they sink into oblivion", so I'm not sure what you are trying to say here? Was this week's deal a terrible one for Nokia (therefore Nokia sinking into oblivion), or a good one for Nokia?

I think it was good... they got rid of the part that was losing money and losing market share.
They kept the good parts (networks, mapping and patents).

The market would appear to agree.

I meant that the Nokia phone division that has been sold to Microsoft and the windows/office part of Microsoft can hug each other.

The deal is great for the continuing Nokia - as you said networks, mapping and patents - because is has a good ongoing business and has traded a bad, loss making division for a suitcase-full of cash. Hence the boost to Nokia shares.

It is an awesome deal for the Nokia phones division because they have a new owner who has deep pockets and a desperate need for them to succeed.

It's a mixed deal for MS themselves.

Positives:

+ The deal is paid for with offshore money. MS has lots of this and they cannot bring it back to the US without paying tax. Since the whole Nokia deal is offshore, MS can find a use for that offshore cash.

+ It negates the platform support payments. MS has a commitment to make payments to the Nokia handsets division in return for that division using an MS OS on its flagship phones. The sales of those phones have fallen short of expectations so that MS is paying a lot more in terms of platform support payments than they have been receiving in the form of windows licence fees. I do not know how much more as the full data is hard to obtain but I have seen suggestions that it may be of the order of hundreds of millions of dollars.

+ It gets MS more skin in a mobile field in which they are currently losing big time.

+ It gets Elop back on bard as a potential replacement for Balmer.

Negatives:

- If Nokia could not turn the phones division round, how will MS get on? It will be a harder task and the only new weapon that they bring is a pile of cash.

- Will MS make things worse when it comes to relationships with other phone makers?

- What does MS do with the feature phones and dumb phones parts?

Given the drop in MS shares, it seems that the markets think that the negatives are in the ascendancy.

tdgeek

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#889971 4-Sep-2013 22:32

jpoc:
Negatives:

- If Nokia could not turn the phones division round, how will MS get on? It will be a harder task and the only new weapon that they bring is a pile of cash.

- Will MS make things worse when it comes to relationships with other phone makers?

- What does MS do with the feature phones and dumb phones parts?

Given the drop in MS shares, it seems that the markets think that the negatives are in the ascendancy.

1. Forget history, Nokia dominated, now its minimal. Windows Phone is the new big thing for Nokia
2. Other phone makers will still use WP, more so as it gains traction.
3. Who cares about the feature and dumb phone parts, that is a cost, but its yesterdays news

To me, its all about Windows Phone, and Microsoft owning Nokia phone division means they can evolve the Nokia Windows Phones faster. They doubled market share to a now 7% or so, thats a start. Look at Apple, they have the iPhone, but what is bigger is they have the phone, tablet, AppStore and seamless integration. Microsoft will make money from margins, thereafter those same users will bring revenue from the Windows app stores, etc, etc. Having their full blown own phone brand, a big name brand is a huge boost. Its about mobile dominating the IT space these days, and that flows to margins, appstore revenues, and that the owners are more likely to go Microsoft for the tablet, desktop OS, game console. Integration of hardware and software and keeping the users locked in to everything MS.

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#890075 5-Sep-2013 08:11

jpoc:
- If Nokia could not turn the phones division round, how will MS get on? It will be a harder task and the only new weapon that they bring is a pile of cash.

In 2008 Nokia dug a big hole and jumped in it with their decision to buy Symbian Ltd and continue with Symbian as their smartphone OS. Symbian had market share but wasn't sophisticated enough for the future. Even then, UIQ (Symbian-based) was better with the touchscreen but it too died when all the other Symbian vendors jumped ship in 2009. Effectively, Nokia 'wasted' 2-3 years of smartphone development in the Symbian hole before adopting Windows Phone in 2011. Now that they have a competitive OS it is turning the phone division around.

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#890229 5-Sep-2013 11:46

Technofreak: Do you call 2008 relatively recent? Nokia has been in the touchscreen smart phone business about as long as most other manufacturers.

Nokia was selling touch screen phones in 2004

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#890559 5-Sep-2013 19:58

1. Forget history, Nokia dominated, now its minimal. Windows Phone is the new big thing for Nokia

Not sure I agree based on the results so far. Nokia's share of the smartphone market has shrunk substantially since they adopted Windows Phone as their smartphone platform.

2. Other phone makers will still use WP, more so as it gains traction.

Perhaps but so far there's been a move away from Windows Phone by some manufacturers with none moving in to take their place. Samsumg has been reported as trying to move away from dependence on outside OEM platforms as they introduce Tizen.

3. Who cares about the feature and dumb phone parts, that is a cost, but its yesterdays news

Not everyone wants or in some regions can afford a smartphone, having a good dumb and feature phone range is a great way to build a market for the future when smartphones are wanted or become affordable.

To me, its all about Windows Phone, and Microsoft owning Nokia phone division means they can evolve the Nokia Windows Phones faster.

Reading between the lines Nokia was frustrated with Microsofts development of Windows Phone so I don't see any faster evolving coming from Microsoft.

They doubled market share to a now 7% or so, thats a start.

Doubled market share to 7%, WOW!!!!!! As I said before Windows Phone shrunk Nokia's share, 7 % is way smaller than what Nokia had before Windows Phone. It would have been reasonable to assume that Nokia's share to at least sustain what it had with it's old platforms but instead it shrunk dramatically. Windows Phone had it's chance and didn't deliver.

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#890573 5-Sep-2013 20:18

In 2008 Nokia dug a big hole and jumped in it with their decision to buy Symbian Ltd and continue with Symbian as their smartphone OS. Symbian had market share but wasn't sophisticated enough for the future. Even then, UIQ (Symbian-based) was better with the touchscreen but it too died when all the other Symbian vendors jumped ship in 2009.

I disagree that Symbian wasn't sophisticated enough. I'm not alone in this assessment. This from Forbes http://www.forbes.com/sites/haydnshaughnessy/2013/09/03/microsoft-lucky-beneficiary-of-nokias-screwed-up-strategy/

There were critics who argued that Symbian was too old school, and a lost cause already. Williams disagrees:

Symbian was a system that was way underrated and received virtually no marketing. The value proposition of the platform was never really presented to the consumer. People know what a iOS device is…they know what an Android device is, and they understand the inherent value of those products and the overall ecosystems. It is a mistake to assume that the reason Symbian didn’t end up holding the reigns as a dominant mobile platform were technical in nature or based on the limitations of capability or design.

Effectively, Nokia 'wasted' 2-3 years of smartphone development in the Symbian hole before adopting Windows Phone in 2011. Now that they have a competitive OS it is turning the phone division around.

Nokia weren't wasting time they were developing another platform Meego, which at it's release was streets ahead of Windows Phone, and in my opinion is still a superior OS, albeit lacking any decent support for app development. Elop killed Meego off and ensured it never got released in any major markets where it might get compared head to head with Windows Phone.

No doubt about it Nokia screwed up, they had their chances and blew them, they had the OS's and the technology and innovation but failed big time to bring them to market in a timely effective fashion.

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#890971 6-Sep-2013 15:09

Technofreak:
In 2008 Nokia dug a big hole and jumped in it with their decision to buy Symbian Ltd and continue with Symbian as their smartphone OS. Symbian had market share but wasn't sophisticated enough for the future. Even then, UIQ (Symbian-based) was better with the touchscreen but it too died when all the other Symbian vendors jumped ship in 2009.

I disagree that Symbian wasn't sophisticated enough. I'm not alone in this assessment. This from Forbes http://www.forbes.com/sites/haydnshaughnessy/2013/09/03/microsoft-lucky-beneficiary-of-nokias-screwed-up-strategy/

There were critics who argued that Symbian was too old school, and a lost cause already. Williams disagrees:

Symbian was a system that was way underrated and received virtually no marketing. The value proposition of the platform was never really presented to the consumer. People know what a iOS device is…they know what an Android device is, and they understand the inherent value of those products and the overall ecosystems. It is a mistake to assume that the reason Symbian didn’t end up holding the reigns as a dominant mobile platform were technical in nature or based on the limitations of capability or design.

Effectively, Nokia 'wasted' 2-3 years of smartphone development in the Symbian hole before adopting Windows Phone in 2011. Now that they have a competitive OS it is turning the phone division around.

Nokia weren't wasting time they were developing another platform Meego, which at it's release was streets ahead of Windows Phone, and in my opinion is still a superior OS, albeit lacking any decent support for app development. Elop killed Meego off and ensured it never got released in any major markets where it might get compared head to head with Windows Phone.

No doubt about it Nokia screwed up, they had their chances and blew them, they had the OS's and the technology and innovation but failed big time to bring them to market in a timely effective fashion.

Good article on Nokia management issues. It is hard to believe that they did so many things wrong and, rereading that article, it does make me wonder if the same is possible at Microsoft.

I didn't say Nokia wasted "time", I said that they wasted "smartphone development" and I should have included Meego. But the two overpriced Meego models I evaluated were hardly memorable marketing propositions.

Nokia certainly squandered lots of work and Williams is justifiably peeved but he doesn't say anything to change my view that Nokia Symbian phones were underwhelming and he is hardly an unbiased or disinterested observer. I knew nothing about Android or iOS at the time, their ecosystem or products. What I saw with Nokia/Symbian was that important features were slow to appear and integration with online features was always disappointing. And integration with my PCs was even worse. In terms of handset features, I found my productivity was so much better with a Sony Ericsson UIQ phone. Android was a bit crappy to start with but I found it better integrated with online features.

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#890988 6-Sep-2013 16:02

On reflection, about the management issues, is there fodder for conspiracy theorists. It reminds me of the grand plan in the Headhunters movie where one company attempts to gain another company's competitive advantage?

[Edit: added link]

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