The Nokia-Microsoft deal: what it means for all concerned

The Nokia-Microsoft deal: what it means for all concernedMicrosoft's acquisition of Nokia's devices and services business is one of the biggest mobile tech deals ever made, bigger even than Google's buyout of Motorola two years ago.

So who stands to gain, who stands to lose, and how is the £4.6bn deal going to impact on the wider mobile industry at large? Let's look at some of the key players:

Microsoft
On the surface, this is what Microsoft wanted all along. In one cash transaction it has become the mobile hardware heavyweight it was never going to be on its own steam, and has inherited one of the biggest patent libraries in the business. It is also inheriting some 32,000 new staff members, which will be a challenge logistically.

Windows Phone
Microsoft says it wants to triple Windows Phone's market share come 2018, but it remains to be seen how many Nokia Windows Phone users will remain loyal once the Nokia name falls away. And how will the other WP8 OEMs react to Microsoft taking what was already a massively dominant favoured partner and pulling it even closer to the fold? If I was Samsung, LG, HTC or the like, I'd wish Microsoft luck and say we'll talk again in 2018.

The Asha brand
The acquisition of the Series 40-based Asha brand isn't the most glamorous aspect of the buyout, but it's probably the most interesting. Microsoft will see the feature phone brand as pivotal in its plans to effectively groom mobile first-timers in developing nations as future Windows Phone users. Will that see the Asha range gradually evolve into some sort of Windows Phone Lite brand? Nokia is well known for its focus on grass-roots innovations in developing communities as part of its Next Billion philosophy. Will Microsoft be as committed?

Stephen Elop
Well that worked out quite nicely, didn't it? The Nokia Windows Phone experiment is struggling (another bad set of results are expected in Q3), Nokia traditionalists are calling for your head and the wider world still thinks it's not too late to jump to Android, and Elop gets to step down from the Nokia hot seat and take up a powerful role right under Steve Ballmer's wing back at Microsoft, just as Ballmer's about to head into retirement. Regardless of anything else, you have to say well played Stephen Elop. It must make all those pretend on-stage buddy-ups with Ballmer you've had to go through worth it. Almost.

Nokia
The big loser in all of this is of course Nokia itself, which will continue to exist but in a much diminished capacity that will consign the notion of Nokia mobile phones to the history books. Sentiment has little place in corporate business, so on that basis Nokia surely deserves this – the past few years have seen too many bad decisions and too few good phones emerging from Espoo. But for many of us, this is also the company that was with us when we took our very first steps into the brave new world of mobile phones, back when they represented an exciting new world of communication, rather than just another always-on uber-gadget helping to fuel our digital existence.

Android and iOS
In truth, this may be a big deal for Microsoft followers, Windows Phone users and most of all Nokia fans, for everyone else this isn't actually that big a deal. The immediate impact of today's news on market leaders Samsung and Apple will be pretty much nothing at all – in the short term anyway – and considering how hard Microsoft and Nokia have had to work just to get their partnership to where it is now, there won't be much sleep lost over this. Not even at BlackBerry, since in truth it's already lost its battle against Microsoft for “third ecosystem” bragging rights.

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27 comments

JanSt / MOD  Sep. 3, 2013 at 19:18

Shame about the Asha brand and the feature phone segment in general.

As to Elop? What can I say? He probably did what he had to do. I was never convinced Android would have been the better route. But enough of that.
In the greater scheme of things his bumbling appearance/s have served him well. I'm much more afraid of the like of Schmidt and Brin to be honest.


I feel for the many Nokia employers who will, without a doubt, lose their jobs as a result of the shenanigans. Though, they had to have seen this day approaching!

Wonder also what effect this has on Finland's 'collective identity' - Imagine GM bought VW, or a foreigner Harrods ... oh, oops.

AhmadCentral  Sep. 3, 2013 at 19:50

Did you guys here elop is now head of devices at Microsoft including stuff like Xbox.

Microsoft - Kinnecting people

;)

JanSt / MOD  Sep. 3, 2013 at 19:53

I heard he IS the head device :p
I guess the next Xbox will run flash games?

AhmadCentral  Sep. 3, 2013 at 20:14

I heard he IS the head device :p
I guess the next Xbox will run flash games?


Xbox One
Now with Nokia Drive

AhmadCentral  Sep. 3, 2013 at 20:16

Still wish they'd stuck with Symbian or something. Hell even Meego.

If they'd actually developed it a bit more and made it from the bottom up to work with a smartphone type device then it really would have been great.

JanSt / MOD  Sep. 3, 2013 at 20:21

Yes, Meego with an Android emulator. The way Symbian had a JVM.

AhmadCentral  Sep. 3, 2013 at 20:35

Yes, Meego with an Android emulator. The way Symbian had a JVM.

That's probably a better idea. Similar to how a blackberry z10 can run all android apps.

matt101101 / MOD  Sep. 3, 2013 at 21:08

Yes, Meego with an Android emulator. The way Symbian had a JVM.

...Similar to how a blackberry z10 can run all android apps.


Apparently...

JanSt / MOD  Sep. 3, 2013 at 21:10

Ahmad, the Z10 cannot run ALL Android apps. Not by a looooooong shot. It's a convenient myth. A fraction of, mostly, old apps versions can be successfully installed and used. In some cases uselessly because APIs were changed (e.g. various Twitter apps can be installed. yes. But they don't work)

AhmadCentral  Sep. 3, 2013 at 21:27

Tbh i've never even touched a blackberry before so what do i know.

timy  Sep. 3, 2013 at 22:08

Ahmad, the Z10 cannot run ALL Android apps. Not by a looooooong shot. It's a convenient myth. A fraction of, mostly, old apps versions can be successfully installed and used. In some cases uselessly because APIs were changed (e.g. various Twitter apps can be installed. yes. But they don't work)

http://forums.crackberry.com/bb10-leaked-beta-os-f395/berryleaks-presents-leaked-unlocked-android-runtime-842651/

not tried this yet but looks like most apps are gonna work fine

JanSt / MOD  Sep. 3, 2013 at 22:09

Tbh i've never even touched a blackberry before so what do i know.

You said it :p :D

matt101101 / MOD  Sep. 3, 2013 at 22:12

Tbh i've never even touched a blackberry before so what do i know.
How oO!? I thought you worked in the industry?

JanSt / MOD  Sep. 3, 2013 at 22:12

Ahmad, the Z10 cannot run ALL Android apps. Not by a looooooong shot. It's a convenient myth. A fraction of, mostly, old apps versions can be successfully installed and used. In some cases uselessly because APIs were changed (e.g. various Twitter apps can be installed. yes. But they don't work)

http://forums.crackberry.com/bb10-leaked-beta-os-f395/berryleaks-presents-leaked-unlocked-android-runtime-842651/

not tried this yet but looks like most apps are gonna work fine


Thanks. Been using various Blackberry devices. I'm right now considering an older Bold.
But I do not find Cr**kberry to be the most reliable source. They tend to err on the side of fanboy-ish wiping-problems-under-the-rug kinda way.

They have published various lists of Android apps that are oh so great on the Z10... They weren't.

matt101101 / MOD  Sep. 3, 2013 at 22:13

Tbh i've never even touched a blackberry before so what do i know.
How oO!? I thought you worked in the industry?

AhmadCentral  Sep. 3, 2013 at 22:20

Tbh i've never even touched a blackberry before so what do i know.
How oO!? I thought you worked in the industry?


Yeh but i've never owned a blackberry. Always had a trusty Symbian or Android device. (My work allows me to purchase any handset out of a certain group)

I've never got on with blackberries before tbh.

(of course i've actually used one, but not extensively)

satchef1  Sep. 4, 2013 at 09:33

If Nokia continued to used their own operating systems they'd have gone bust eventually. We've seen over the past couple of years just how difficult it is to stop Android's momentum - Microsoft couldn't do it, BlackBerry couldn't do it, HP chickened out, and no doubt Mozilla and Cannonical will realise the same thing before too long; to really excel in the smartphone industry today, you need deep pockets. Imagining a 'what if' scenario is a nice romantic vision, but it has always been a matter of time for Nokia. If you aren't a tech giant or a Chinese ODM then you aren't going to survive the decade in the smartphone business.

The reality really isn't a bad outcome for Nokia. They've basically 'done an IBM' and got out of the hardware game before it killed the company. They're now free to develop their HERE mapping/location services business, NSN, and any new opportunities that they see, without the burden of the smartphone arm. The scale of the company is massively diminished compared to what it was five years ago, or even today, but it's now a business with a future.

rash  Sep. 4, 2013 at 10:24

I knew it Elop was just a trojan horse!

He just screwed Nokia over basically. There are a few mistakes he made (not from M$ perspective of course!). The first was putting all his eggs into one basket.

Nokia should have gone Android - they would been the largest manufacturer right now instead of Samsung.

Take a leaf out of Samsungs book - they are selling bucket loads of Android phones but STILL they have their own Tizen OS, Bada OS and WP8 too!

Nokia needed to release Android phones - it would have made their balance sheet look good and they could then continue developing Meego/Maemo etc.

matt101101 / MOD  Sep. 4, 2013 at 10:31

Nokia should have gone Android - they would been the largest manufacturer right now instead of Samsung
No, they wouldn't. Nokia were still messing around with Symbian for ages after Samsung had made a name for themselves with their Galaxy line of Android devices. If Nokia had have chosen Android, they'd be in direct competition with HTC; premium looking and feeling Android based phones.

The only way Nokia would have had any chance of competing with Samsung would have been to pick up Android when Samsung did...then again, HTC did that and they still can't compete. The only company with whom Samsung are in direct competition, is Apple.

Stelph  Sep. 4, 2013 at 10:36

I knew it Elop was just a trojan horse!

He just screwed Nokia over basically. There are a few mistakes he made (not from M$ perspective of course!). The first was putting all his eggs into one basket.

Nokia should have gone Android - they would been the largest manufacturer right now instead of Samsung.

Take a leaf out of Samsungs book - they are selling bucket loads of Android phones but STILL they have their own Tizen OS, Bada OS and WP8 too!

Nokia needed to release Android phones - it would have made their balance sheet look good and they could then continue developing Meego/Maemo etc.


Disagree - TBH a lot of the points Elop raised when he made his burning platform talk were spot on, Nokia were in a Jam as Symbian was dying, and taking on Android wouldnt have helped as they still would have had to wait an age for the first device to come out, and would then have had to battle both the Nexus range and Samsung and wouldve become another "me too", im yet to see any evidence that more than one big manufacturer can do well on Android (sorry HTC)

What I disagree with still was his dismissal of Meego, althogh the N9 reception was lukewarm and I think Jan, who had one, said it was far from perfect, I think it wouldve been a solid alternative had they thrown everything behind it, plus I imagine with 100% of resources the N9 wouldve come out a lot sooner than it did IMO, which wouldve helped slow Nokia's decline

Its a shame but its the inevitable outcome ever since Nokia took on Windows Phone, its a shame the whole mobile division is gone as it wouldve been nice to see Nokia go back to its roots and perhaps produce and support quality "dumphones" as I think there is a market for them, although not as lucrative as the smartphone market. I suspect MS has no interest in dumphones

JanSt / MOD  Sep. 4, 2013 at 11:54

matt,
I disagree. Samsung are in competition with Apple in the same way Blur competed with Oasis in the mid-nineties...
The real competition is: who rules Android.
Apple are not in this league. Apple do not offer £60 and £600 devices and hundreds inbetween.

Apple's sales are unaffected by Android launches.
Fluctuating "shares" are based on fiddly data - browser usage etc.
Nor do Apple compete vs Windows 7 or 8... If they felt they were, they'd license OSX to OEMs

That is all total and utter bullsh*t.
PR smoke and mirrors and unicorns.
You need a 'nemesis' - something to be better than or threatened by! It's creative writing 101.

MS tried Ultrabooks and luxury tabs and UMPCs and and and... Didn't hurt Macbook sales.

Sometimes things seem to affect one another when they don't. Some things look similar when they aren't. Squids eyes look like mammals eyes although their evolution, their 'building blocks' are TOTALLY unrelated.

As to "Nokia should've gone Android"?!
The N97/97 Mini sold loads. They weren't awful because they ran Symbian. They were awful because they were buggy, chunky, underpowered, had sticky plastic screens etc etc... The iPhone and later Android changed not only the WHAT but also the HOW. Nokia didn't get that. The N900 was a beast, with a 5 year old screen and a processor that wasn't up to par. From that POV Elop was maybe even right to dismiss MeeGo?! The N900 wasn't ready for mass consumption. It was a geek's dream. And it looked as if the N9 was gonna be the same.

I think even with Android Nokia would've made the same mistakes. They can engineer and build whatever they set their minds to; but they frequently misinterpret what people want!!!
People didn't like the iPhone's touchscreen because it was touchscr
een. They liked it because it worked! No matter how 'retarded' the first iPhone was as a smartphone. What it did it did well, and differently enough to be exciting - AS A PACKAGE. Of course nothing about it was unigue and new; but the WHOLE was.

Android struggled too. In 2009 it still got very mixed reviews! Lets not forget that.
And all early prototypes were BB style Qwerty devices. Old news, But Q4 2010 the N8 outsold the Samsung Galaxy S!!! So, at that point gor Nokia to say only Android can save us wasn't all that clear.
Apparently a well crafted N8 with an exceptional camera and a cr*ppy OS could still play in the big league and score.

The other issue with going Android: Maps! Nokia's main service. And email... directly attacked by Google! Seems like a good partner?

Anyhoo: Elop did his job. I have NO doubt he would've taken Nokia to WP even if the X7 or E7 or E6 would've sold 10s of millions upon launch. People could've squatted for an N9... He would have gone WP. That is what I believe. It was his job. His only purpose for being in Finland.

AhmadCentral  Sep. 4, 2013 at 12:45

I still think they should have built their own OS from the ground up rather than going with WP or Android.

Stelph  Sep. 4, 2013 at 15:30

I still think they should have built their own OS from the ground up rather than going with WP or Android.

I wouldve liked to see the N9 followed up with the N808 running MeeGo rather than Symbain, it wouldve stopped all the moans about how Symbian was on its way out (which although true was an overally harsh judgement)

I think that really wouldve sparked interest in Nokia and MeeGo and probably was Nokias last chance of going solo

rash  Sep. 4, 2013 at 15:44

I absolutely agree Nokia should go solo - however given the condition they were in (i.e. cash balance) the most prudent course of action would have been at least give Android a try. I'm pretty sure it would have got the dough rolling - remember this is Nokia and if you have been following Nokia since the Nokia 3510/3310 days you will know that Samsung had been trying to muscle in on Nokias market share for quite some time, but just couldn't do it! They even released quite a few symbian phones!

So if Nokia decided to show up to the Android game - with their rock solid build quality, quality cameras etc, I think we'd all be talking about the Lumia range and not the S4.

Obviously in the meantime they would also have taken Maemo/meego to the next level and have a range of those phones too.

My biggest issue is NOT that Nokia make WP8 phones - but that Elop deliberately put all their eggs in his previous bosses basket!!!!!!!!!!!

Whatever his reasons I don't think he had Nokias best interest at heart.

satchef1  Sep. 5, 2013 at 08:41

The sentiment is great, but it still doesn't change the fact that Nokia didn't/don't have the money to play big in the smartphone market. The rules changed - to excel you now need to be a large corporation with a diverse portfolio and deep pockets. That, or you're a Chinese ODM and can simply undercut everyone else because your staff are paid peanuts.
Android could certainly have worked for a time, but like HTC and BlackBerry, Nokia don't have the required attributes to compete going forward. Going exclusively Windows Phone was a duff decision, but migrating towards becoming a services business was inherently sensible. That is the bit Mr Elop did right.

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