Microsoft to buy Nokia phone business for $8 billion

[Orphia Nay]

Microsoft has announced it will buy Nokia's mobile phone unit for almost $8 billion.

The Finnish phone maker will grant Microsoft a 10-year non-exclusive licence to its patents, and will itself focus on network infrastructure and services.

Nokia makes Lumia brand phones exclusively for Microsoft's Windows Phone 8 operating system.

The phone maker described the deal, worth 5.44 billion euros ($7.98 billion), as "the best path forward" for Nokia and its shareholders.

http://www.abc.net.au/news/2013-09-03/microsoft-to-buy-nokia-phone-business-for-248-billion/4932090

Is this good news or bad news?

Notice of interest: My current phone is a Nokia E71 and I hope my next phone will a new Nokia Lumia of some sort.

 

[theprestige]

http://www.abc.net.au/news/2013-09-03/microsoft-to-buy-nokia-phone-business-for-248-billion/4932090

Is this good news or bad news?

It's just news.

200 years ago, Nokia didn't exist.

200 years from now, I doubt any historian will be pointing to this event as meaningful in any positive or negative way.

Corporations are formed and dissolved, bought and sold, every day.

I'm not dating Nokia. Microsoft isn't my boyfriend or anything. Neither of them is my bulwark against the NSA. Neither of them is my best and final hope for a better tomorrow in cellular.

Microsoft makes a good OS for the end user, which is me. I had a Nokia phone once, it was okay. What's it to me if one buys the other?

 

[The Don]

theprestige is right, Nokia is just changing its focus again. It started off as pulp mill in 1865, branched out into rubber and wire manufacturing before focusing on telecoms and networking in the 3rd quarter of the 20th century. The move into handsets changed the company yet again.

It seems that Nokia will now go back to focusing on infrastructure and network hardware and software.

It's interesting that Stephen Elop is likely to return to Microsoft, perhaps to become Chief Executive when Steve Ballmer steps down.

 

[Jack by the hedge]

Is this good news or bad news?

Yes.

The good news is that now there will be no buck-passing over whether all the unfinished and buggy parts of my Lumia phone are Nokia's fault or Microsoft's fault.

The bad news is that in future it will all be Microsoft's problem so there will be zero feedback about whether they ever intend to do anything about it.

 

[icerat]

If Ballmer wasn't retiring, then this would probably be bad news for Nokia.

However Ballmer is retiring and Elop, who has been at the head of Nokia while it's been developing great devices, is now head of the line to replace him.

Which means it's good news for Microsoft.

I have a Lumia 920 and it's fabulous.

 

[elbe]

It's just my personal opinion but I'd worry that MS should probably not be bringing more products into the fold before they get their own house in order.

 

[timhau]

It's a 7-billion dollar deal in US dollars. Currently in the Nasdaq pre-market, Microsoft trading at roughly 3.5% down, which means it has lost about $9.7 billion in market value. Meanwhile, at the Helsinki Stock Exchange, Nokia is up by over 40%. Somebody thinks it's a fabulous deal for Nokia, and Microsoft is using $7 billion to buy something that has negative value.

As for users of Nokia phones... hell, what do I care, I have a Samsung.

 

[timhau]

theprestige is right, Nokia is just changing its focus again. It started off as pulp mill in 1865, branched out into rubber and wire manufacturing before focusing on telecoms and networking in the 3rd quarter of the 20th century.

I think it's more like in the 4th quarter. Back in the 1970s and 1980s, the best-known consumer products manufactured by Nokia were car tires and rubber boots, and nightsticks were commonly referred to as "the Nokia youth counselor". TVs and computer monitors were the first Nokia electronics products to hit my radar, and that was in the latter part of the 1980s (which was also the time they divested their tire manufacturing business).

 

[The Don]

I think it's more like in the 4th quarter. Back in the 1970s and 1980s, the best-known consumer products manufactured by Nokia were car tires and rubber boots, and nightsticks were commonly referred to as "the Nokia youth counselor". TVs and computer monitors were the first Nokia electronics products to hit my radar, and that was in the latter part of the 1980s (which was also the time they divested their tire manufacturing business).

My stupid fault for relying on Wikipedia for accurate information.

 

[timhau]

Oh, it's probably not so much factually inaccurate as heavily slanted towards the way Nokia wants to write its history -- as if the transfer from a this-and-that conglomerate went smoothly and had a clear direction even before the late 1980s/early 1990s.

 

[Cuddles]

It's just my personal opinion but I'd worry that MS should probably not be bringing more products into the fold before they get their own house in order.

That's exactly what they're doing. Microsoft has made a really rather decent mobile OS, but have sucked at making devices to go with it or convince many other companies to do so. Nokia, on the other hand, still make some great phones but have really been struggling on the software side of things since the advent of smartphones. If they don't somehow screw things up, it's pretty much a perfect match for both of them.

One interesting point is that the deal apparently includes licensing Nokia maps to Microsoft as well. Their map services are very well regarded and the satnav app is far superior to Google's (and there's no point even mentioning the laughingstock that is Apple maps). If they play their cards right we could finally see some real competition for Google's dominance of mobile maps.

 

[icerat]

That's exactly what they're doing. Microsoft has made a really rather decent mobile OS, but have sucked at making devices to go with it or convince many other companies to do so. Nokia, on the other hand, still make some great phones but have really been struggling on the software side of things since the advent of smartphones. If they don't somehow screw things up, it's pretty much a perfect match for both of them.

One interesting point is that the deal apparently includes licensing Nokia maps to Microsoft as well. Their map services are very well regarded and the satnav app is far superior to Google's (and there's no point even mentioning the laughingstock that is Apple maps). If they play their cards right we could finally see some real competition for Google's dominance of mobile maps.

Yes, HERE maps and Bing maps together should make a good product. Nokia Music & XBOX Music are another interesting proposition, though I'm not sure if the Nokia product brings much to the table.

And lets not forget Microsoft owns Skype.

ETA: Hmmm, but according to this article the deal only includes limited use of the Nokia brand. That's a major mistake I think, but I suppose it's likely Nokia wouldn't have done the deal otherwise. MS does get "Lumia" and other brands though.

 

[varwoche]

Nokia has been going south for several years, due in large part to failure of Windows phones, while being run by a former MS exec. And now this. Comical!

This move reeks of desperation.

 

[elgarak]

One German headline I read translates to "the union of the lame and the blind" (sorry, too lazy to search for a link).

 

[theprestige]

If Ballmer wasn't retiring, then this would probably be bad news for Nokia.

However Ballmer is retiring and Elop, who has been at the head of Nokia while it's been developing great devices, is now head of the line to replace him.

Which means it's good news for Microsoft.

I have a Lumia 920 and it's fabulous.

Wasn't Elop also the author of the infamous "burning platforms" memo, and the architect of Nokia's dramatic fall from grace?

 

[timhau]

Wasn't Elop also the author of the infamous "burning platforms" memo, and the architect of Nokia's dramatic fall from grace?

Yes, and... no, not really. Nokia's mistakes predate Elop by several years. Their trip to the top of the mobile phone world made them large and profitable, but also comfortable, complacent, and more than a little arrogant. You can probably trace a lot of this back to the man behind Nokia's 1990s success story, then-CEO and Chairman of the Board Jorma Ollila. He took a company that was in a real danger of bankruptcy and turned it into a major international player -- and later, his own plaything and an extension of his ego. When he retired from the CEO post in 2006, he stayed on as chairman and hand-picked his successor (Olli-Pekka Kallasvuo) to make sure his legacy in the company lived on. The company was already stagnating at this point, and this made things worse; as a result, they were caught completely off-guard by the success of first the iPhone and then Android. By the time Kallasvuo was let go, he initially still wanted to bring in one of his insider yes-men to lead the company, but at this time several major shareholders told him in no uncertain terms that if he doesn't bring a fresh face and an outsider, they'll call an extraordinary meeting and kick him out of the board. Elop didn't turn out to be a good choice, but he took over a company that had already tripped over its own feet and was starting to fall rapidly.

 

[icerat]

Nokia has been going south for several years, due in large part to failure of Windows phones, while being run by a former MS exec. And now this. Comical!

This move reeks of desperation.

So they go from losing smartphone marketshare to gaining smartphone marketshare and that's "going south" due to the failure of their smartphones?

It's only really in the US where it's struggling, and even there it grew share.

It took nearly 2 years for Android to match iPhone, and that was primarily by growth of the market as a whole. Windows Phone, particularly in the US, entered a relatively mature market. Much tougher to grow, particular when matched with the botched Windows 8 launch.

 

[varwoche]

So they go from losing smartphone marketshare to gaining smartphone marketshare and that's "going south" due to the failure of their smartphones?

It's only really in the US where it's struggling, and even there it grew share.

It took nearly 2 years for Android to match iPhone, and that was primarily by growth of the market as a whole. Windows Phone, particularly in the US, entered a relatively mature market. Much tougher to grow, particular when matched with the botched Windows 8 launch.

Too little, too late. Hence the sale to MS.

 

[elbe]

That's exactly what they're doing. Microsoft has made a really rather decent mobile OS, but have sucked at making devices to go with it or convince many other companies to do so. Nokia, on the other hand, still make some great phones but have really been struggling on the software side of things since the advent of smartphones. If they don't somehow screw things up, it's pretty much a perfect match for both of them.

I do see the benefit to them for their mobile market share but I also see the questionable choices they've made in their other OS and gaming divisions of late. I certainly wish them no ill will, but, I don't know, I guess I just don't fully trust the management there.

 

[The Don]

As a loyal Nokia user (I've had them since around 1995) my chief frustration of late was the Symbian operating system. The latest versions are a lot better but in the last 2-3 years too many have been clunky to use.

The reason I've stayed with Nokia is that the phones have always been durable and the last few I've had came bundled with Ovi (now Nokia) Maps which is an excellent GPS and SatNav system that allows map caching so I don't attract data charges overseas. When I got my last phone a couple of years ago I plumped for the x7 instead of the Lumia because of the voice guidance caching.

Now that the top models of Lumia come with global licence for whatever the maps application is called these days then there's no reason why I wouldn't go for a Lumia model on my next upgrade.

I really only use my phone for making calls, GPS and taking the occasional photo so a lot of the Apps are completely wasted on me.