Official: Microsoft To Acquire Nokia Devices and Services Business 535
Many submitted, and symbolset emailed me to wake up, sending this bit of interesting news out of Redmond: "Microsoft Corporation and Nokia Corporation today announced that the Boards of Directors for both companies have decided to enter into a transaction whereby Microsoft will purchase substantially all of Nokia's Devices & Services business, license Nokia's patents, and license and use Nokia's mapping services. Under the terms of the agreement, Microsoft will pay EUR 3.79 billion to purchase substantially all of Nokia's Devices & Services business, and EUR 1.65 billion to license Nokia's patents, for a total transaction price of EUR 5.44 billion in cash. Microsoft will draw upon its overseas cash resources to fund the transaction. The transaction is expected to close in the first quarter of 2014, subject to approval by Nokia's shareholders, regulatory approvals and other closing conditions."
And, yep, Elop is part of the deal (quoting Ballmer): "Stephen Elop will be coming back to Microsoft, and he will lead an expanded Devices team, which includes all of our current Devices and Studios work and most of the teams coming over from Nokia, reporting to me."
Hmm... (Score:5, Interesting)
So Elop left Microsoft to head up Nokia, where he made supposedly very idiotic changes that had the effect of destroying Nokia's share price. Microsoft then buys Nokia at a fraction of the cost it would otherwise have been, and Elop returns to a prestigious role at Microsoft, where he's in with a shot at the CEO role.
That doesn't look the slightest bit dodgy at all.
Suddenly, the money is in hardware. (Score:5, Interesting)
Re:Hmm... (Score:4, Interesting)
One article says the share price is down 53% during his tenure, just under three years. That's damn fine work, especially in this market!
[aside: yes, we know pretty much everybody on Slashdot called this from day 1]
MS will be free to dump more money into WP (Score:5, Interesting)
Microsoft has been paying Nokia $1B/year. As part of a much larger organization, it will be much easier to hide how much money Microsoft is dumping into Windows Phone, including support for marketing and selling handsets below cost.
Nokia handsets, meet XBox!
Inspiring... (Score:4, Interesting)
How I read the open letter:
"Nokia has an identity spanning 150 years of heritage, innovation, excellence, and change. That ends today. By this evening those 150 years will be a rumor. They never happened. Think about that. Today is history. Today will be remembered. Years from now, the young will ask with wonder about this day. Today is history, and you are part of it..."
He Never Sold his House in Redmond (Score:5, Interesting)
Do you find it peculiar the Elop never sold his house in Redmond and his family didn't move to Finland though Stephen said hey would ? Can you avoid thinking of a conspiracy ?
Re:Hmm... (Score:5, Interesting)
What the hell was the Nokia board thinking?
The New York Times has that quote [nytimes.com]:
In a statement, Risto Siilasmaa, chairman of Nokia’s board and Nokia’s interim chief executive, said that “the deal offers future opportunities for many Nokia employees as part of a company with the strategy, financial resources and determination to succeed in the mobile space.”
In case you missed it in all that PR-talk, the Nokia board believes that Microsoft has the strategy to succeed in the mobile space, despite the fact that Microsoft's failed strategy and partnership with Nokia is what caused Nokia's failure. In other words, he's been asleep for the last three years.
A better question is "what was Microsoft thinking?" Nokia makes good hardware, but so does Microsoft. What Microsoft needs in the mobile space is a good operating system, which Nokia had until Microsoft convinced it to supplant it with Windows. Nokia's not failing because it didn't make a good phone, it's failing because it filled good hardware with Microsoft's software. Now Microsoft is buying a company allegedly for its expertise in cramming poor MS software into good hardware? It doesn't make any sense. If your head doesn't hurt yet, wait for the claims that Microsoft only bought Nokia to get Elop back to take a leaf out of Apple's playbook, buying next to get Jobs back.
A brief history of Stephen Elop:
-CIO of Boston Chicken (Boston Market) when it filed for bankruptcy protection and left that year. The company was bought by McDonald's for its real estate holdings two years later.
-CEO of Macromedia, acquired by Adobe three months after he took the job.
-Worked at Adobe for a year, resigned.
-Worked at Juniper for a year, resigned.
-Worked at Microsoft for two years
-Named CEO of Nokia three years ago this month, big contribution was throwing out in-house work and betting the company on Windows mobile, and ultimately oversees the sale of the company to Microsoft.
-Next up: Back at Microsoft, poised as the only act who could possibly top Ballmer as worst CEO ever. For the record, he doesn't throw chairs... he throws phones [youtube.com]. "I can take care of that for you right here. It's gone!" Remember those words when Windows is the next "burning platform." The problem is... Elop doesn't have anyone to sell Microsoft to...
Re:Suddenly, the money is in hardware. (Score:5, Interesting)
You know what's sad? Nokia's smartphone division, back in the Symbian days, was consistently profitable. They used to sell more phones than Apple and Samsung put together. Since the move to Windows Phone, they were never profitable. Not a single semester out of the red... except that one time when they sold a building and did some scuzzy math with that.
Re:Hmm... (Score:5, Interesting)
What the hell was the Nokia board thinking?
Best guess seems to be: The largest shareholders of Nokia (the type that get people on the board) are even larger shareholders of Microsoft. Microsoft has been clearly failing (I don't mean losing money; failing to keep mindshare and deliver new things) for several years. The idea was to sacrifice Nokia's success to bolster Microsoft's. This move seems to back that up. How the hell someone would prove this I have no idea, but anyone who is employed at Nokia, has evidence of this and hasn't given it to the Finnish financial authorities should do that now.
Re:Hmm... (Score:5, Interesting)
A brief history of Stephen Elop:
-CIO of Boston Chicken (Boston Market) when it filed for bankruptcy protection and left that year. The company was bought by McDonald's for its real estate holdings two years later.
-CEO of Macromedia, acquired by Adobe three months after he took the job.
-Worked at Adobe for a year, resigned.
-Worked at Juniper for a year, resigned.
-Worked at Microsoft for two years
-Named CEO of Nokia three years ago this month, big contribution was throwing out in-house work and betting the company on Windows mobile, and ultimately oversees the sale of the company to Microsoft.
-Next up: Back at Microsoft, poised as the only act who could possibly top Ballmer as worst CEO ever. For the record, he doesn't throw chairs... he throws phones [youtube.com]. "I can take care of that for you right here. It's gone!" Remember those words when Windows is the next "burning platform." The problem is... Elop doesn't have anyone to sell Microsoft to...
So is Elop a raging idiot who runs companies into the ground out of incompetence or rather a stealthy hitman who failed his missions inside Adobe and Juniper? I'm inclined to believe the latter.
Re:Hmm... (Score:5, Interesting)
Yet he's touted as the likely heir for CEO when Ballmer retires.
It reminds me of the resume of Gil Amelio, who had a similar record of failures yet people managed to convince themselves that he was some sort of CEO genius. He took Apple to the lowest point, when in desperation tried to buy BeOS. He fscked up that deal and then, to his incredible luck, bought NeXT instead. Jobs forced the board to fire Amelio and the recovery of Apple began then.
Re:We saw it coming (Score:4, Interesting)
Its not that anyone didn't see this coming, both inside and outside Nokia. I wrote at that time that clearly Elop was doing the same thing Belluzo did to SGI, all the time working for Microsoft's benefit, not the shareholders of Nokia. And that the reason he would go along and do so is that he was promised to be Ballmer's heir when he returned after Microsoft purchased Nokia cheaply. But where are the Finnish authorities in all this? They should arrest that thug for securities fraud if nothing else, and run him out of the country.
Re:and there goes the Nokia Android (Score:3, Interesting)
MeeGo was another WebOS: late, buggy, and basically going nowhere with the organization they had and the cannon ball of Intel shackled to their leg.
Nokia would have made a glorious last stand with it, open source geeks would support them (never mind an occasional grumble about the bugs, wanton platform changes, and closed components, what's this between friends), but in the end it wouldn't bring bread to the table without substantial cultural changes and a lot of development. Yes, I'm familiar with The Legend of Spectacular N9 Sales.
Re:Who didn't see that coming? (Score:5, Interesting)
Yeah, everybody could see it coming, but it doesn't make sense from the POV of Microsoft shareholders.
Nokia Mobile built its success on two things: excellent relationships with its channels, the telcos; and a superb market segmentation model. (Its designs were robust, reliable, and well-liked by their users, but conservative; and its manufacturing division ... did tolerably well, considering the tens of models and hundreds of variants. Not brilliantly, but tolerably; perhaps less so in the year before Elop was brought on board.)
Nokia's value resided in these two things: channel relationships, and a deep understanding of all market segments: a willingness and ability to make phones for every demographic and national market, and sell them via the established channels. Those were Nokia's core competencies, the places it created value, the things it did better than its competitors. Not manufacturing. Not design innovation. Marketing, market research, selling a large range, nearly everywhere. (The one geographical market in which Nokia didn't have good telco relationships was the USA. So it didn't sell many phones, except to the discriminating.)
That was before Elop and the "only Winpho, only North America, Apple me-too" strategy. Elop has admitted to channel resistance to selling Windows Phone, and he has pruned Nokia's tree of products down to a stump, pretty much. He's ignored (at best) nearly all markets outside North America.
Nokia's value is gone. Sacrificed to the belief that Nokia could out-innovate companies which excel at that.
Microsoft's buying Nokia in the hope of obtaining massively successful product innovation is ... misguided? Optimistic? An interesting idea? Unlikely to be in the shareholders' best interests? What the hell is a suitable euphemism for "deranged lunacy"?
Re:Suddenly, the money is in hardware. (Score:5, Interesting)
Google bought Motorola for the patents. Microsoft bought Nokia because everyone else had almost abandoned Windows phones and Nokia was about to abandon them as well.
Only Samsung and Apple make money from phones. Nokia, HTC, Blackberry, and Motorola all make a loss. Btw, Nokia and HTC are 9th and 10th on the top smartphone list. Blackberry and Motorola aren't in the top ten.
At this point the phone business has turned into the PC business. Phones are a commodity. They all have 300-400 ppi screens. Anything higher than that is silly. The screens are all as large as you can hold comfortably. They all have the same CPU and and the same RAM and the same battery life. It's easy to design a high end phone.
For some reason it's harder to make money with smartphones than with PCs. You have to first become one of the few subsidized phones. I think the phone companies know you have to go through them so they don't pay very well?
Re:and there goes the Nokia Android (Score:5, Interesting)
Perhaps he will replace Ballmer. He does appear to have the desired 'consumers should just shut the fsck up and buy what we tell them to' attitude to consumer relations and seems as adept at handling employees and morale to make the shift in leadership seamless.
Somehow I suspect the problem at Microsoft is the board. They aquired the stock while liking the mindset of the management and having kept Ballmer for so long they obviously want that. They'll keep running it the same way, all the way into the eventual crash into the ground.
Re:and there goes the Nokia Android (Score:4, Interesting)
Time to kiss my karma goodbye, bring on the Trolls (Score:5, Interesting)
Bollocks to it.
We just can't let this happen, it's almost a full blown disaster, the one ray of sunshine is the patent deal.
We need to find a way to buy Nokia out before this deal goes through.
Seriously?!
Microsoft gets a free pass for all the damage they did and gets a licence to all the Nokia patents that they know they cannot survive in mobile without?
For the price of the Nokia-Siemens buyout?
So Nokia shareholders are to sell their entire mobile business to the scumbags that ruined it for just enough money to own the rump end of their own business free and clear?
Screw that.
I'll offer the Nokia board $7.5B for 51% of the whole company, less any long term investors that want to assign their proxies to me, and I'll re-organize the whole company, turf out all the losers that have managed the company into the ground and spank the living crap out of the company that did this to them. The company that deliberately did this to them.
If Microsoft thinks those patents are worth so much, stick 'em under a GPL-like licence that lets anybody play in mobile so long as they share and tell Microsoft and Apple to go screw themselves.
I posted the following on Groklaw the day it died, in the desperate hope of getting some reasoned help. I was too late.
Looks like I might be too late again.
Stuff that for a game of soldiers, Slashdot might be full of loonies and Trolls but there are still some sane voices hidden amongst the noise.
Have at it.
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I've been working up to posting this for weeks.
I don't really want to post it now but I may never get another chance.
I'm not ready so the link will be to nowhere till at least tomorrow.
Apologies in advance for any offence but I won't take the chance that I miss the opportunity to reach members of the Groklaw community that I may never be in contact with again.
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I'm hoping you guys will be able to help me out.
I've been silently standing on the sidelines here almost since the very beginning. I, like you, feel very deeply that what we have been watching happen here is an outrage.
Watching monopolies desperately trying to destroy the open-source world like a bunch of petulant toddlers makes me want to bang my fists and smash things with rage. (Yes I do see the irony there.)
I have, for a long time, felt powerless to do anything about it but I have come to a decision to make a stand.
The real problem is that we lack the sort of wealth and influence that the corporate elite possess. We are forced to contend with them on a battlefield of their choosing with little or no resources.
I think it is about time we stopped putting up with that and started fighting fire with fire.
If we want to win this war we need to acquire more money and influence than our opponents and, ludicrous as that idea seems on the surface, I don't think it's something that is beyond the realm of possibility.
You see the thing is that the businesses that we face here are either monopolists or practising outmoded models, they are desperately trying to hang on to a way of doing business that has been out-evolved. They look on the surface like the 800lb Gorillas but in reality they are more like Giant Pandas. They are tottering on the edge of extinction because they are too myopic to realize that their ecological niche has gone or that they are in the process of destroying it with their own stupid greed.
So here's what I plan to do and what I think I can achieve given a bit of help.
I plan to buy Nokia.
I think Nokia could easily be re-organized into a vastly profitable enterprise and its enormous collection of patents could be used to beat the snot out of the trolls and proprietary monopolists. I think a licensing scheme similar to the GPL could be created that forced everyone in the mobile space to 'share and share alike' and to compete on merit rather than in litigation.
I want to create something that is inherently, by
Re:and there goes the Nokia Android (Score:5, Interesting)
Indeed, that is exactly what I said would happen at the time, too... that he made a deal to return and be Ballmer's successor once he was done doing to Nokia what Belluzo did to SGI. The similarities are strong too; remember, Microsoft then needed Belluzo to take down a unix workstation vendor to help establish market presense for it's own crappy new proprietary workstation OS that nobody would want then either; it was called NT. Thugs rarely change their MO, unless or until they are finally imprisoned for it.
Forgot the Chinese companies (Score:4, Interesting)
"Only Samsung and Apple make money from phones."
You missed the two mainland Chinese companies. Too lazy to Google for them right now but that would be two of the following: Lenovo, Huawei or ZTE. LG is probably still porfitable until they get steamrolled by yet another rising Chinese company.
Re:Beware of Microsofties bearing gifts (Score:5, Interesting)
I think Microsoft is making their best possible move, given the situation. The future is mobile. There will always be servers, and there will always be desktops and laptops, but their share of the world market is diminishing. Phones are the future of computing, if Microsoft isn't a major player in that market in ten years they will be declining. They are a huge company with billions in the bank and billions in profit, they won't fall quickly. But if 90% of home users do most of their gaming on a tablet and most of their computing with a phone that uses MHL to plug into a monitor and bluetooth to connect the keyboard and mouse, then Microsoft will start to see its fortunes fade.
The advantage with Android is that it's open source. Amazon has their own flavor of Android. Vendors in China have their own flavors of it too. If Windows Phone is ever killed, Microsoft could put out an Android core, compatible with Android apps, but with Bing for search and Nokia's Navteq for maps. Instead of having multiple competing mobile operating systems, you have one dominant mobile operating system with multiple competing proprietary layers on top.
If Google's flavor of Android just becomes dominant, then I agree too that it's a serious problem. I think Google's behavior has shown that they're fundamentally no different from other big tech companies. They're open precisely until they get a dominant market position, and then they're closed in order to slam the door against the next set of innovators. Hence Google Plus has no open third party API - Google wants to suck users into their social network, not make it easier for Facebook (or the next Facebook, whatever that is) to suck users out.
Re:Beware of Microsofties bearing gifts (Score:4, Interesting)
Do you have another explanation?
From what I can see they sent in Elop to use Nokia to make WinPhone popular and if that failed were prepared to buy Nokia to keep it selling WinPhone.
Re:consistently profitable? (Score:4, Interesting)
Actually the Android game is very very tight on margin.
Samsung makes money only because the basically build the entire supply chain from essentially raw materials. HTC is loosing money badly. LG I don't know. Motorola well they are now google so those books will be cooked.
I love Android it's just a game that Nokia would never have been able to profit. I thought they should have gone with Android myself back a few years ago. But clearly that was a bad idea in hind sight.
Nokia was caught with their pants down. The worst thing was they didn't even know it for 3 more years. By then they lost the market they owned. They simply could not grasp touch screens. The N95 was a phone that should have opened the eyes at Nokia. Here was a popular device that did pretty much every thing. It had a huge screen for the day. Did it really have a successor. Did they try to innovate after it? Nope. They just rehashed the same format a few more times.
The next device needed to be touch. And it needed to be good. They didn't even try. They put out what was it 4 rev's of the same format? Then they basically collapsed, living off the life support of a HUGE cash balance. Which is now long gone.
In the end the only option was sell to MS.
Shareholder lawsuit? (Score:4, Interesting)
The CEO has a fiduciary duty to his company and its shareholders. Elop pretty obviously violated that duty by acting in the best interests of MS, not Nokia. It seems to me that there would be strong grounds for a Nokia shareholder lawsuit against Elop personally, and possibly against MS as well. Discovery proceedings could be quite interesting – civil attorneys can demand just about any relevant documents, emails, and so forth. Unless everything was done verbally with no record, there ought to be some evidence of Elop's malfeasance.
Re:Beware of Microsofties bearing gifts (Score:4, Interesting)
Beautiful. Simple. Brilliant. Out of place and hardly on time. Timeless. The Nokia N9 is a story with no happy ending but you want to enjoy every word. Sad story. Post-coital kind of sad.
And that’s not because the Nokia N9 let us down. On the contrary, we found it to be a revelation: gorgeous design and the divine simplicity of the all-screen experience.
If anyone is let down, it's the Nokia N9 itself. The platform is as good as doomed. Forsaken by its own creator. With Nokia giving up on MeeGo and a price tag that confines the N9 to a premium niche, it will be next to impossible for the OS to grow a substantial user base. Without users, developers won’t be too interested in MeeGo either. And the limited number of apps is the platform's biggest weakness.
Google a few other reviews and they will all be along those lines. I didn't buy it because it was dead on arrival, I bet a lot of others did the same. And it's a shame because it could have been a great platform, especially because it was a fairly standard Linux system below the hood.