Microsoft Purchases Nokia's Device and Services Division to Unite Windows Phone Hardware and Software

[Gudi]

Does this mean Microsoft has decided it would prefer a high profit, low market share model similar to the one employed by Apple? Seems very un-Microsoft.

Microsoft prefers total market domination, so that their indispensable software licenses divert all the money made with selling computers in their own pockets. But they failed to maintain that total domination with the rise of two competing (mobile) computing platforms iOS and Android. Windows Phone isn't exactly indispensable for OEMs right now.

So they need to develop a new business model which acknowledges the fact, that they don't have a big market share to bank on. Apple back then found a solution for exactly the same problem. When Jobs returned he killed the Macintosh clones market and set the company off to make money by selling hardware not licenses.

So yes, Microsoft is the new Apple. Just with Steven Elop instead of Steve Jobs.

 

[irobot2003]

I'm pretty sure you've had two crashes of some sort in 2 years on iOS. Apple tends to hide crashes pretty well in that they make it look like you "did something wrong" when it occurs. No software is perfect. None.

But it doesn't matter because it's not really a [urinating] contest. Every platform is pretty darn stable these days. [...]

I wouldn't be that surprised at 2 years with zero crashes for iOS on an iPhone... haven't had a crash in ~10 months. I've had an iPad 1 for ~2.5 years now, and I believe that did crash once or twice early on, but I don't actually remember.

Now I have rebooted my iPhone a number of times to restart a misbehaving app, usually Safari. But Safari is not iOS...

 

[pacalis]

You can disagree all you want but until MS has an actual track record I don't see the rational to suggest its already a winner in the mobile space. It's like declaring the Yankees the 2013 World Series winners on the first day of spring training 2013.

I guess my edit was in progress when you were posting, so I agreed with you that I overplayed my initial comment. That wasn't my intent.

However, you underplayed MS existing position. They are already a winner in enterprise software. And the hardware category mobile is collapsing - everything hardware is becoming mobile - tablets, phones and computers are becoming increasingly substitutable and less differentiated. So calling a win for MS in enterprise hardware is premature, but I don't see any serious competition in enterprise software.

 

[Gudi]

I wish someone could answer one question for me.
If a directionless company buys another directionless company, does that give it direction?

Sure. Apple buying NeXT would be the obvious example.

The biggest turn-arround in economic history.
Happend before. Might happen again. Won't happen again.

 

[pacalis]

Microsoft prefers total market domination,

Dude, what company wouldn't prefer that?

 

[Chupa Chupa]

You just confirmed MS is willing to under price to get ahead (and they had 2 competitors, not just 1)
To be sure, Sony also under priced its PS2 to build the foundation.

MS has the resources to build a compelling ecosystem (which partly exists with .Net), and within 12 months the potential to get someone with the vision to do it.

1) No need to scream.

2) I didn't confirm anything. It's a well known fact the original Xbox was losing money.

3) MS has always had lots of resources. We'll see what happens. But MS isn't going to succeed just because its MS. It's reworking Windows 8 right now. It also has to choose a new CEO. I can't see it following Ballmer's path after pretty much forcing him out. Lot's going on a MS. I think your 12 mo target is ambitious.

 

[Vetvito]

Yes, but hardware is how the customer interprets and perceives the platform. Those differentiators -- camera, design of the case, etc are not insignificant to a products success. It's why Google bought Motorola. It's why Apple doesn't license out iOS. As Jobs demonstrated when a company has start to end complete design control of a product it can control it's own destiny. I'm not sure why that is so hard for you to understand as it's a well accepted business concept.3.

Omg. You clearly misinterpreted my argument.

My argument , Microsoft already controls the integration of the hardware and software. They already do that. Everything else is moot regarding the Speeding up of innovations and updates and getting it out to consumers.

 

[StoneJack]

Microsoft just became an integrated, world-class enterprise device company

you mean, like we're going to see Microsoft server PCs made by Nokia running Windows Server OS? Like Dell servers? Or HP servers? I guess then we will see all of enterprises moving actually to Linux!

 

[nofear1az]

How about making their app store usable? It's just a mish-mosh of colored tiles that makes it practically impossible to find anything (at least on Windows 8).

I took one look at the mail app on the Windows phone and immediately dismissed Windows Phone as an option. The OS is very UNprofessional looking, and looks geared towards the younger, social media-minded consumer. MS really needs to make the OS more corporate friendly if they want to sell these things. People don't keep a phone for work and a phone for play...they need a phone they can do both.

Whaaaat? What part of the mail app is unprofessional looking. I've used iPhones, Android phones, and Windows Phone 8 and I have no idea what you are talking about. And yes, I have used all of those phones professionally.

 

[Gudi]

Microsoft is a software company in need of a new direction and real future - this isn't it.

No, Microsoft is a products and services company.
Have you never listened to Steve Ballmer?

Ballmer to Microsoft shareholders: 'a fundamental shift [is] underway in our business'

All what Microsoft needs is execution on their new direction.

 

[WilliamLondon]

Then what is their future? I'm honestly curious what you think, not trying to be sarcastic.

Microsoft is king of the enterprise, and we are moving towards a more mobile work environment. I'm not talking 'mobile' in the sense of being able to work anywhere where there's an internet connection, that's already huge. I'm thinking your phone/tablet will be your office. Skype, Yammer, now mobile devices through Nokia (look at the Nokia tablet running RT that's coming out). They are absolutely headed in the right direction.

Timing, on the other hand, they could've done this a long time ago.

What I see is a software company in search of a future that does hardware failures very well just bought a dying hardware company. What I see is Microsoft trying to figure out a way to shoehorn in their "enterprise skills" into a future mobile device oriented world.

What I don't see is vision.

I don't see a software company, through a simple reorganisation and corporate acquisition, becoming tomorrow's mobile devices company for the enterprise.

What I see is that WP just lost every single hardware partner going forward, and Nokia will be the only phone with Windows phone on it going forward - how's that for penetration and how's that for getting their enterprise software on mobile devices?

What I see is other hardware manufacturers watching this and realising MS's desire to be a hardware company and that leaves no room for OEMs in the future with Microhard?. What I see is a company with more money than sense.

A new CEO could come on board and turn it all around (that would be exciting to watch), but it's looking like that's not what they want, they want someone to implement a strategy they've already decided and locked in, and any CEOs worth anything will not implement someone else's vision or strategy, so I see Microsoft becoming Microhard and I hear the wails of a dying giant on the horizon, and I see a lot of Nokia shareholders squealing with glee, saying, "thank you for bailing us out, Microsoft!"

 

[gorskiegangsta]

cant resist to 'fix' the logo

I like this one better

 

[Gudi]

Dude, what company wouldn't prefer that?

Apple – they go for profit share not market share.

Tim Cook: Apple Makes the Best, Not the Most

 

[WilliamLondon]

No, Microsoft is a products and services company.
Have you never listened to Steve Ballmer?

Ballmer to Microsoft shareholders: 'a fundamental shift [is] underway in our business'

All what Microsoft needs is execution on their new direction.

Yeah, I'm quite familiar with what they "claim" to be lately, but what they are, where they come from, is software, it's the "soft" in Microsoft. I know what they want to be, but they are a software company and I'm not convinced they'll make a successful transition to this "devices and services" company they want to be. Hardware and software are two separate beasts, just ask their OEM partners.

As for executing Microsoft's "new direction," any strong CEO will want to come up with his/her *own* direction, what they need is a strong leader with vision and until they come up with those goods, I'm not convinced.

 

[pacalis]

you mean, like we're going to see Microsoft server PCs made by Nokia running Windows Server OS? Like Dell servers? Or HP servers? I guess then we will see all of enterprises moving actually to Linux!

In modern times device usually means mobile device, not a truck with an IBM 360 in the back.

 

[itguy06]

Oh? And what's YOUR source on that, "Jack"? Here's an article from Forbes. The American market is not everything, and indeed, mobile trends often begin in Europe.

And that article said Windows Phone is doing well in low to mid end phones. My guess is people are settling fo Windows Phone. And if the iPhone 5c is real and cheap why would I get a knockoff when I can get the real deal?

Heck look here:
http://www.androidauthority.com/android-and-ios-brand-loyalty-251756/
and see that the majority of people that own a Nokia will not buy another.

Look here for markershare stats:
http://www.idc.com/getdoc.jsp?containerId=prUS24257413

2Q 2012
iOS - 26 million
Android - 108 million
Windows Phone - 4.9 million

2Q 2013
iOS - 31.2 million
Android - 187.4 million
Windows Phone - 8.7 million

Net Change
iOS - +5.2 million
Android - +79.4 million
Windows Phone - +3.8 million

So where is Win Phone outpacing the industry? iOS is beating them almost 2:1 with an "aging" platform... Only going to get woese if/when non MSFT/Nokia OEMS drop like flies.

personal experience. It's taken my mom years to learn how to do anything on her iPhone, but not long ago she picked up my Windows Phone and managed to figure out what to do.

Interesting as most usability put iOS at the very top.

...and in terms of developers, Microsoft has made developing apps for their platform pretty easy. A lot of new developers are popping up because of it, and there are TONS of apps available.

Yeah when MS throws piles of cash at them and writes them for the companies (documented facts) they will come and most will be a distant 3rd rate app or abandonware over time. As it is now, most WP apps are lacking many features of iOS or Android versions.

Sorry, WP may have some initial success but it will gain very limited traction, like Sidekick, Zune, and Surface.

----------

HTC also makes windows phones, as do sony and samsung. It just happens that Nokia makes the BEST.

And how long do you think HTC, Samsung, and Huawei will support their direct competitor? How many non SurfaceRT tablets are there? I predict as soon as the contracts with MS from HTC, Samsung, and Huawei are done they will exit the WP business and nobody will enter to replace them.

 

[Krazy Bill]

But what's the point of buying a money losing hardware business?

Because those are usually cheap. (And it was).

All Microsoft gets for $7B is more employees (even thought they're bloated as is) and uncompetitive manufacturing facilities.

But MS never had control over the infrastructure (the way Apple and Google have). That's all going to change for them. At least the attempt anyway.


On Tiles:

I havent used it enough as to have a clear opinion

Neither have I other than toying with them in a Verizon store and of course using them in Windows 8.

I still think they maximize space on a small display. Unlike the huge gaps in iOS icons. I dunno... maybe it's just different than what I'm used to and I find it refreshing at first glance.

 

[Gudi]

Vertical integration? They don't make the software. They get the glass, CPUs and batteries from other manufacturers - some of the same ones used by Apple and Motorola.

They make TouchWiz, they just don't make Android. The OS is a commodity, Google gives it away for free. Vertical integration is all about controlling what is important for the creation of value. Apple buys a lot of cheap stuff from its suppliers. But when they put it all together the value is created. You could give the same glass to anybody else and they couldn't make a $600 device and sell it a couple million times. The glass has no value of its own, its given to it by Apple using it. Can you make the whole device without depending on someone as your sole supplier of one critical component? Than you can keep all the profits for yourself.

I would argue that Samsung took the lead in the android phone market because of good marketing and timing when other makers slowed down development.

Yes marketing and timing. Thats also the standard explanation for why Apple became such a hugely profitable business. For some reason success has never something to do with the product and how it is made. Its always marketing and timing.

 

[musika]

You rant about a box and then you don't even show a pic of it. FYI all phones used to be branded by the carriers. Nokia is an old player in the game so this is how they always give the phones to the carriers. Wouldn't surprise this is part of an old contract w att that is still active so they have to carrier brand the box. Anyways it seems you return the phone because of the box? I don't think you understand unboxing videos... They are not about the box being 'pretty'.

Here's a picture of it for you.

Sure, Nokia is an old player and I think that is partly the reason why this whole buyout is taking place, isn't it? They were an old player, playing by old rules and that's simply not acceptable.

That's like saying that if Microsoft had kept making software for command line interfaces in the '90s, years after the Macintosh, that it would somehow be okay.

Microsoft adapted. They stole, they copied, etc. But at least they evolved.

Being an old player is no excuse to make the experience of a product sucky. They should be doing everything in their ability to make the experience better. And the way this device's packaging experience (and many others are) are not better, they actually suck.

I didn't return it because of the box, but for a number of reasons, and I chose to focus on the box. Because it's important.

Until other companies besides Apple realize that compromises to the experience of buying and using a product should not be acceptable, they won't be getting my money.

 

[nofear1az]

I agree that this is so; but in a larger sense it calls into question the whole way in which Windows 8 was developed. Why and how did this happen? What critical parts of the design and vetting process were left out? Was it imperial arrogance ("We know what they need") or something like that?

It's an old saying "If it ain't broke, don't fix it". Did they "fix" Windows 7 (which was pretty good IMHO) just to sell more copies of Windows? Who knows, but the result has not been pretty, as you correctly point out.

Windows 7 was an improvement on Vista but it's still slow, lethargic, and bloated - check out the Control Panel, see how many steps it takes to get your IP Address without using cmd - all in comparison to XP. It's too wordy and linky in the control panel or properties instead of just the meat.

Windows 8 is actually good if it could be defaulted to the Desktop and had a Start Menu. I'm all about efficiencies and Windows does not do it for me.

 

[cgsnipinva]

They make TouchWiz, they just don't make Android. The OS is a commodity, Google gives it away for free. Vertical integration is all about controlling what is important for the creation of value. Apple buys a lot of cheap stuff from its suppliers. But when they put it all together the value is created. You could give the same glass to anybody else and they couldn't make a $600 device and sell it a couple million times. The glass has no value of its own, its given to it by Apple using it. Can you make the whole device without depending on someone as your sole supplier of one critical component? Than you can keep all the profits for yourself.
Yes marketing and timing. Thats also the standard explanation for why Apple became such a hugely profitable business. For some reason success has never something to do with the product and how it is made. Its always marketing and timing.

Google may "give" Android away - but not with license and patent ownership on their end. What if they decide not to license Android to Samsung - can you run a phone on touch-wiz - which sits on top of Android? No. People use Android for their Gmail (Google), gTalk (Google), Google Drive (Google), Google Photo, Google Maps - all of which are good apps running on Google Servers and linked with services on the back end (its not just software) - what have you left? A phone with Touch-Wiz? I will say the Galaxy is a well designed phone but without the software - not that unique.

Is the Galaxy's camera unique? No. Is there speakers/audio? no (in fact HTC has the best audio to date on phone. Does Samsung make the Qualcomm Processor? No - that belongs to Qualcomm and is sold to other device makers. Apple is unique in it designs its own chip. So I don't see where Samsung controls the supply chain to its own benefit exclusive of everyone else.

 

[nofear1az]

Here's a picture of it for you.

Image

Sure, Nokia is an old player and I think that is partly the reason why this whole buyout is taking place, isn't it? They were an old player, playing by old rules and that's simply not acceptable.

That's like saying that if Microsoft had kept making software for command line interfaces in the '90s, years after the Macintosh, that it would somehow be okay.

Microsoft adapted. They stole, they copied, etc. But at least they evolved.

Being an old player is no excuse to make the experience of a product sucky. They should be doing everything in their ability to make the experience better. And the way this device's packaging experience (and many others are) are not better, they actually suck.

I didn't return it because of the box, but for a number of reasons, and I chose to focus on the box. Because it's important.

Until other companies besides Apple realize that compromises to the experience of buying and using a product should not be acceptable, they won't be getting my money.

You're too focused on the small stuff... sure the box isn't as pretty as Apple's but it's only noticed now that Apple has set the standard. I'd rather have them concentrate on a good phone than a pretty box. just me of course.

 

[DanCorleone]

New Job for Elop

Here is what Elop=Flop should be doing for his next job. I can just see him as a member of this choir:


www.rightthisminute.com/video/russian-army-military-choir-skyfall-adele-stpetersburg-breakfast

Trust me is is worth watching for 30 seconds.

 

[musika]

You're too focused on the small stuff... sure the box isn't as pretty as Apple's but it's only noticed now that Apple has set the standard. I'd rather have them concentrate on a good phone than a pretty box. just me of course.

They should focus on everything.

If I'm gonna spend my money on their product, even the little things have to be up to par and they're just not.

 

[PracticalMac]

I fail to see the point of this acquisition. Microsoft already essentially "owned" Nokia. Not only was a Microsoft mole at their head (Elop), but they were exclusive to Microsoft software. What is the gain here?

The loss is the sure abandonment of Windows Phone by other hardware manufacturers.

Oh, and I see the Microsoft astroturfers have been mobilized for this thread. Some of these ringing endorsements of Windows Phone smell suspiciously like press releases and PR copy.

Considering the stunning success of WinPhone, I doubt Nokia will make an Android phone.