Microsoft buys Nokia's phone unit

[Satellite]

http://www.theverge.com/2013/9/2/468...-windows-phone

Microsoft buys Nokia's devices unit in a $7.2 billion bid for its mobile future

One of the most enticing "what-ifs" of recent years has come true: Microsoft has purchased Nokia's Devices and Services unit, bringing the Lumia lineup under the Redmond roof. The move unites Windows Phone 8 with its biggest hardware supporter, giving the company the integrated mobile offering it's been looking for with Surface and other devices. When the deal closes in the first quarter of 2014, Microsoft will pay 3.79 billion Euros for Nokia's business, plus another 1.65 billion Euros for its portfolio of patents. (The 5.44-billion Euro total is considerably less than Microsoft paid for Skype in 2011.) 32,000 people are expected to transfer from Nokia to Microsoft, including 18,300 that are "directly involved in manufacturing."

The purchase comes on the heels of what appeared to be a failed acquisition in June, at which point it seemed conversations had broken off entirely. Now the two come together, in what outgoing Microsoft CEO Steve Ballmer called "a bold step into the future." In an email, Ballmer cited the Lumia 1020 as an example of what the companies could do together, but said the phone hadn't caused the marketshare bump it deserved. "Now is the time to build on this momentum and accelerate our share and profits in phones," he wrote.

"Asha will be an on-ramp to Windows Phone"

A driving force behind the sale seems to be Nokia's low-end Asha brand, which Microsoft has acquired outright. Asha gives Microsoft a far larger footprint for Windows Phone, and access to millions of customers in developing countries that it plans to use as an "on-ramp to Windows Phone." The emphasis also lends some credibility to the notion that Nokia's high-end strategy isn't working — analysts predicted a horrific Q3 for the company, and its struggles to find a foothold are well-documented. In fact, Microsoft's licensing deal for the Nokia brand doesn't include future Lumias — Nokia as a smartphone brand is effectively dead, as Microsoft takes the lineup in-house.

"Nokia's days as a smartphone brand are over"

Though Nokia was by leaps and bounds Microsoft's best hardware partner for Windows Phone 8, EVP of Operating Systems Terry Myerson was careful to note that Microsoft's purchase doesn't come with nepotism. As Google has with Motorola, Myerson promised every partner would be treated the same, even quoting a song by The Killers to make his point. And from Huawei to HTC, there are still other partners — Nokia's coming in-house, but Windows Phone 8 isn't being walled off.

Its device business now gone, Nokia's plan is to focus on three core technologies: NSN (its network infrastructure) HERE (its maps and location-based services); and Advanced Technologies (a licensing and development arm). Microsoft will pay Nokia for a four-year license of the HERE services, bringing the new company more revenue and stability than it had previously. But it also makes Nokia a much smaller company.

"Stephen Elop is going back to Microsoft"

As part of the agreement, Nokia CEO Stephen Elop is stepping aside; he's now leading Microsoft's Devices team. That puts him in an odd position with Julie Larson-Green, who Ballmer said will be joining his team, but will also be responsible for other hardware like Surface and the Xbox One. The exact scope of Elop's role isn't exactly clear, and with a soon-to-be-vacant CEO seat we expect plenty of rumors to fly as the acquisition closes. Risto Siilasmaa was named Nokia's Interim CEO — he was previously chairman of the company's Board of Directors.

For $7.2 billion, Microsoft bought its way into the category of "devices and services company." It gives Microsoft the kind of end-to-end control in mobile that only Apple and BlackBerry have enjoyed (to varying success), and a critical measure of quality control. But can Microsoft succeed where Nokia failed? Was Nokia holding Windows Phone back, or was Windows Phone the problem? The big questions aren't going away, but maybe now we'll get answers.

F'uck that Elop trojan horse. It's ironic that back in 2011, everyone in Finland seemed to know what Stephen Elop's job in Nokia was, everyone except the people in control of the company. Hiring an ex-Microsoft boss is not a good idea. He destroyed Nokia by switching to Windows Phone instead of Android. Every step he took was made in a way to progressively destroy Nokias value in the stockmarket so Micro$oft can buy it for a ripoff price.

In case you don't know, Nokia is probably the most succesful Finnish company ever, and this deal means tons of jobs lost and a hit to the economy of this country. Worse than that, it means losing one of the biggest icons of this country.

[Dudewitbow]

following any kind of tech site, its expected. Nokia was crushed underpressure of other phone giants primarily due to branding and advertising. The latest Nokia Lumina 1020 has a superb camera, and acts like a camera with phone capabilities rather than a phone with camera capabilities to some extent. The problem that nokia has is purely advertising money. Most of the people who own smartphones probably dont know much of the 1020. the smart phone market being the current mainstream market is dominated by big names in the industry. With companies making phones/tablets for google(e.g LG nexus 4), as well as the fact that google owns manufacturing at motorolla, while the other 2 giants, Apple, who has a large cult of followers and samsung, who actually owns the majority of the android market, as well as own the manufacturing to many key parts of the phone(they own a fab lab, so samsung most likely fabricates their own memory, they also get priority in screens due to their large tv/monitor department) simply because they are one of the biggest companies in the world. Albeit I would love to see nokia survive on its own, the likelihood of that happening is low. similarly to this, Blackberry has pretty much put itself in the market as well, as they more or less come to realization that racing the top companies in the world will eventually degrade into a advertisement battle, one that they have almost zero chances at winning. Microsoft is trying to take this chance to inject itself in the mobile market(which it was late in). Its also part of the constant battle between microsoft and google.

[Fiel]

I have actually been looking at smartphones recently. I've already looked at the SG4 and HTC One and I might end up going with HTC. However, I thought I'd also consider the Lumia 1020 just to check everything out. It's something else entirely - a high end camera slapped on a smartphone. It reads like the friggin' A-10 Warthog.

"Dude... For the A-10 Warthog, some guy looked at a friggin' gatling gun and wanted to give it wings. That is the essence of the A-10."
"Dude... For the Nokia Lumia 1020, some guy looked at a friggin' DSLR camera and wanted to give it smartphone. That is the essence of the Lumia 1020."

Yet I almost feel like it's the jack of all trades and master of none. Whereas mixing the pager and phone back in the 2000's led to the smart (dumb) phone, I doubt everyone wants a high end camera on their phone. I sure as hell don't want to pay for a feature like that, so I don't find the Lumia that attractive of an offer.

I'd really like to see Microsoft take Nokia into the more high end competition arena of smartphones because there really isn't anything Windows at the high end. It's all midrange stuff.

I'd love to see more of the Surface in a smartphone design. The ability to have the Windows operating system on a tablet is a game changer and makes Android/iOS offerings definitely less appealing on a tablet.

[Niernen]

I have actually been looking at smartphones recently.

Wait for a sale at target. Trade in your old phone and get the $20-25 coupon when you trade in an old phone. Ended up getting the s4 for like $65. (Traded in my old Blackberry for $53)

[Fiel]

Wait for a sale at target. Trade in your old phone and get the $20-25 coupon when you trade in an old phone. Ended up getting the s4 for like $65. (Traded in my old Blackberry for $53)

Don't see why I would do that when Samsung offers an upgrade rebate that far outpaces the Target offer. I can get $50 from Samsung. Also, I would be paying full price for the phone since contracts are way too expensive.

[madanthony]

This is interesting. Had the luck of camping with Bing's director of engineering while in Olympic. He talked about how Microsoft realizes they're getting destroyed on hardware by Apple's direct control over design and manufacturing and the quality that comes from that. So they're aggressively going after stuff like this. They've already got Xbox going strong, they're trying with Surface, and now they've grabbed a phone manufacturer. Fiel, I don't think you'll be waiting long for Surface in a phone/tablet package.

But the marketing... Microsoft should acquire a stellar ad firm.