Microsoft to acquire Nokia
microsoft.comGreat move by Microsoft.
This is an acquisition that arguably puts Microsoft mobile capabilities above that of Google's, and closest to Apple's. They're getting industry veterans with great design talent. They're getting a Lumia product that has the best build quality of any non-Apple smart phone. They're acquiring proven channels to access global markets. Both Nokia and Microsoft have been floundering in the mobile space recently; neither have had any real explosive successes. Together they might make some really compelling offerings.
I'm not a fan of their mobile OS, but I am a huge fan of Nokia's latest smartphones, and if Nokia design's talent can figure out how to introduce a better UI, I'd seriously consider getting The Windows Phone as my next smartphone.
This is an acquisition that arguably puts Microsoft mobile capabilities above that of Google's, and closest to Apple's.
To have this loltastic sentence at the top of hn makes me wonder if MS or some PR has a bunch of shill accounts they roll out for occasions like this. Seriously? As the other reply said, they were already together. And losing. Badly. And hated, broadly.
And the reason the windows phone sucks so badly is that MS tied the PC and phone UIs together into a "push-me pull-you" (Windows 8 everywhere) that can't succeed at either task. And so to escape MS will have to back out of their deal entirely, go back to designing phones and PC OSes separately, and given MS' ingrown bureaucratic insanity there that seems less than likely.
Grafting a few more limbs onto a failing Frankenstein will ... create a bigger failing Frankenstein.
I take it you have never used a Windows Phone. The Lumia's Nokia make are well designed and high quality, WP8 isn't that bad at all and will undoubtedly get better in the future. Everyone I've met with a WP device (Which is a lot, a fair percentage of my coursemates own one) is happy with it.
And so to escape MS will have to back out of their deal entirely, go back to designing phones and PC OSes separately, and given MS' ingrown bureaucratic insanity there that seems less than likely.
Why would they ever want to go back to designing them separately? How would that benefit anyone in any way? In case you hadn't noticed phones are computers now, integration is the future.
I bought a Lumia 800 as my first smartphone and I'm not quite happy with it.
- It lost at least 60% of its value in less than a year (price for a new one dropped by that much)
- MS wants me to pay them if I want to build an app to use on my own phone
- And after I've paid them I can only put three apps that aren't published on there. If I publish them in the app store and would like to use them myself I have to buy my own apps. So basically just give them money.
- No significant software updates
All in all, it's a good dumb phone, but it's not a great smartphone.
Well you got screwed then. I just bought an 820 SIM free for £179 (Can buy three for the price of an iPhone 4S here). Buy a new car, lose WAAAY more than that in 6 months. Only Apple devices hold their value and I don't understand that as the market is saturated with them.
You don't have to pay them to build for your own device. Just register it as a development device and you can push your own stuff to it. I just did this with WP8 and it's fine.
Not published an app yet so can't comment.
No significant software updates (compared to Android that is). That's a good thing. The platform is pretty stable and consistent across all vendors. It's a shit trying to push an app to 5 different versions of Android.
The only PITA is to do WP8 apps, you have to use Windows 8 which I really don't like. It's bearable with Start8 though.
To be honest I've owned iPhones, Android handsets (Samsung, HTC) and the only thing I don't want to throw across the room due to stupid problems has been WP8.
That is to be expected from a first generation device unfortunately. Windows Phone 7 was Microsoft toe-dipping into the mobile space with the Metro UI to see if it could be viable.
While WP 7 was a huge success in this regard, the hardware / platform wasn't designed with a long roadmap set for its future, as in order to advance Windows Phone to WP8, the hardware specs of all of the WP7-generation devices was to be abandoned.
I just upgraded from my HTC WP7 device to a Nokia Lumia 1020, and the phone is amazing. I use Android on my tablet, but I prefer Windows Phone on my phone. FYI, the camera on the Lumia 1020 is as amazing as all the reviews say it is.
It costs like $19 to register an account on the WP dev centre (or free if you are a student), that's less than Apple and Google charge. For that you get Visual Studio and Blend all set up to develop with and can publish apps to the store.
What your parent wants to do, "build an app to use on my own phone", is free on Android.less than Apple and Google chargeIt's free to build an app and deploy it on your own Windows Phone(s) too - you only have to pay if you want to distribute it through the Windows Store.
It just changed some days ago
Since there, you CAN'T deploy a personal app in your wp8 because you need to unlock it first and to do that you need to have a developer account.
Yeah, it used to be much more than that. It is $19 a year though.
1) Somebody already told you this, only iDevices hold the value, everything else would value peanuts after a couple of months. 2) This happens with Apple too. 3) I don't have that problem, did you check that? Maybe is a problem in your end. 4) My 1 years old LG android 2.3 got stuck with that version for good. On the other hand, WP8 doesn't even have a year.
I had been used 4 platform (ios, android, BB and WP7 & 8) And my Lumia 920 is my all time favorite smartphone and it is a pleasure to develop for it in comparison with Android and iOS. So I guess is a matter of taste
> I take it you have never used a Windows Phone.
I have. In fact, it's a perfectly good phone - works well, makes and receives calls with good quality, does not experience loss-of-signal too frequently and both browsing and e-mail work as expected.
But that is the feature set of a featurephone. Coincidence or not, former featurephone users are the only demographic where Windows Phone is growing.
"It doesn't suck" is not competitive these days. Certainly, there are iOS and Android and Blackberry devices that do suck, but there are plenty others that don't.
"not that bad" doesnt mean it's good when compared with the competition , "not that bad" is not enough today. A mobile OS must be excellent , not good , to compete. That's the problem of WP Os, it is just "not that bad"
I think WP8 is excellent, I meant that it is not as bad as he seems to think it is. Its also not all doom and gloom for WP, my employee (a large multinational company, thousands of employees) is switching all its employee phones from Blackberry to WP8. Even if its consumer market isn't that big you have to remember that a lot of the business world runs on Microsoft's software and it all ties together very nicely with Windows Phone.
The only way that Windows Phone ties to Microsoft's enterprise offerings better than iPhone is the name. Literally everything else can be done on iOS, often better.
At three times the price. You don't need any additional software to manage them (if you use System center that is) and it "just works" (tm). When your company runs on Microsoft it makes sense to go with Microsoft.
Is the iPhone version of Office better than the Windows Phone version? At least the WP version doesn't require Office 365.
And here we go with the shill comments...
If someone doesn't agree with you it doesn't mean they are a shill.
This isn't Slashdot!
> If someone doesn't agree with you it doesn't mean they are a shill.
Maybe, but sometimes this is the simplest explanation to a well-timed explosion of PR-like, blatantly untrue, astroturfish and "loltastic" statements.
Nokia is a failure in the smartphone business, only out-failed by Blackberry at the moment. Microsoft has been a has been in that sector since the arrival of the first iPhone. If anyone seriously believes two bricks float better than one, it's time to change the meds.
The simplest way to vet that explanation was to simply click on my profile and see that I've been here for years with a karma count that certainly doesn't trip any shill account alarms.
Indeed and if you look at the accuser's account, it reads like a Slashdot profile :)
I made a direct reply to your comment as well. Sorry if it looks like I am accusing you of being part of a deliberate PR attack on online communities. I still agree, however, with joe_the_user's comment: your claim looks a lot like what an astroturfer would say.
Then maybe you should recalibrate your expectation of what a comment is supposed to say a little bit, as any comment in support of some company's products is going to 'look a lot like what an astroturfer would say'.
Astroturfing is only one of many possible motives for a comment being left. We should not be so quick to jump on that as an explanation for anything which doesn't agree with our notions.
> maybe you should recalibrate your expectation of what a comment is supposed to say
Please refer to https://news.ycombinator.com/item?id=6320222 for the reasons I found kyro's comment very PR-like. I expect, and will remain expecting, HN comments to be based on reality.
The only reality that is acceptable on HN is that Google is unstoppable and benevolent to geeks. An optimistic view of their competitors counts as shilling.
Perhaps people are motivated by the news and wish to defend their knowledge investments?
It's not a failure, nor is it a success. Yet.
People were saying this a decade ago about the Xbox remember.
Microsoft only decided to compete just over two years ago and they're entering a very competitive market. It takes time to get traction on these things and they're doing it, just slowly. The potential to grow exponentially is still there.
As for the declaration of failure, are you really qualified to judge what a failure is or are you spouting the echoes of all the tech news journalists who like getting hits from slating Microsoft (which will never become unfashionable)?
> People were saying this a decade ago about the Xbox remember.
The Xbox was a failure.
The Xbox 360 was better executed than the more ambitious PS3. It succeeded while the PS3 did not do so well, yet the PS3 is far from being a failure.
> Microsoft only decided to compete just over two years ago
You are ignoring the decade+ behind WindowsCE and Windows Mobile. Microsoft has always been a player in this market.
> You are ignoring the decade+ behind WindowsCE and Windows Mobile. Microsoft has always been a player in this market.
It was a very different market that Windows Mobile competed in. A market that emphasized physical keyboards, rather than touchscreens. A market with $200 device subsidies, rather than $400 smartphone subsidies. That market disappeared, and so did Windows Mobile's chances. In fact, every major product from that market is either dead or on life-support. Palm, Blackberry, Symbian.
Today, Windows Phone 8 shares very little code with Windows Mobile 6.5. Maybe some drivers, that's about it. It uses a different kernel, a different UI toolkit, a different API.
Microsoft failed horribly in the PC spreadsheet market, too. But they threw away their original product (Multiplan) and ported Excel to the PC. Laughing at Multiplan's failure would've been irrelevant when discussing the prospects for Excel. The introduction of the GUI disrupted the existing market for DOS spreadsheets.
Similarly, the failure of Windows Mobile 6.5 is irrelevant for the purposes of discussing Windows Phone's prospects. The problem with Windows Phone is that not that Windows Mobile failed -- but that Windows Phone has a low market share.
A lot of the financial world runs on Excel spreadsheets and VB macros. Its scary, but I wouldn't say they have failed horribly at the spreadsheet market.
If you read my comment, you will see that I was talking about Microsoft's failed spreadsheet, Multiplan. Not Microsoft's successful spreadsheet, Excel.
> It was a very different market that Windows Mobile competed in
It seems you assume Microsoft decided not to compete then. I wonder why they made Windows Mobile then...
> Similarly, the failure of Windows Mobile 6.5 is irrelevant for the purposes of discussing Windows Phone's prospects.
Forgive my lack of faith, but a company that has, consistently and for as long as this market existed, failed to deliver a decent product, even despite the huge mountains of cash spent in developing it, seems a very unlikely competitor now.
The 360 is only "not a failure" because the rest of MS had been keeping the XBox division's life support going for 5 years (their worst years being the 2 immediately following the 360's release). While they're no longer bleeding cash, the XBox division is still not a net-gain for Microsoft.
http://www.neowin.net/news/report-microsofts-xbox-division-h...
I'll always be an Android user, but even I admit the current Windows Phone UI is cleaner, looks better, and is easier to use. I don't have stats, but I can certainly throw my anecdotes in that people I see get them are happy with the UI and OS, although the don't have the level of apps the other platforms have.
Actually, I think M$ just bought themselves a lot of power. Microsoft's achilles heel was always hardware, and Nokia's was software until recently when they started pushing Windows Phone OS.
So the way I see it, M$ just bought a hardware company that already uses M$ software. No brainer.
I agree with you. I used to have a Nokia N900 and that thing was amazing. They abandoned it and switched to a crappy windows based OS which can't do half as many things as the N900 could and also had the potential to. I think they should have continued developing their Maemo OS, it was the best phone OS I ever used.
By potential what do you mean? To me anything that isn't too broken by design has potential and certainly WP8 isn't broken by design. I'm wondering if you are talking about ecosystem-related potential or something more technical.
I agree with another commenter.. Microsoft about a hardware company that already used its own software. No brainer.
But they were together already. This past time Nokia only developed Windows phones and Microsoft paid for the marketing of the Lumia. Nokia had Stephen Elop as CEO, for crying out loud. We already knew Nokia was a part of Microsoft. This is not a move, just a formality; the low price gives you another hint. If the partnership Microsoft-Nokia could have changed their positions in the mobile sector, it would have happened years ago.
Nothing will change as a result of this.
It's more than that. Microsoft is acquiring the Lumia brand. This gives them the ability to bundle both hardware and software to create one simple, cohesive experience. They will no longer be pushing the Nokia Lumia with Windows Phone 8, but The Microsoft Phone. And they can now brag about how they are the smartphone with the best camera. From a marketing perspective, this makes lots of sense.
Lots of that is speculation on what I hope Microsoft does with this, namely adopting Apple's marketing simplicity and control of the user experience.
I wonder if such bundling will be an issue with their existing anti-trust issues?
Microsoft hasn't had real anti-trust issues in a while. Windows 8 did lots of things they wouldn't have gotten away with 15 years ago; nobody's going after them because they don't really wield the monopoly power they once did.
My understanding is that Microsoft, like IBM and ATT before it, was permanently disallowed to do certain things? I understand that nobody is/has gone after them (yet?), but is that just prosecutorial oversight/prioritization issues, or is there actually nothing wrong?
Yes.
For example, Microsoft is permanently enjoined from restricting OEM crapware preloads. OEMs are allowed to preload whatever they wish on top of Windows.
However, it's perfectly fine for Microsoft to bundle an app store -- so long as an OEM is also allowed to load its own app store. (As Lenovo is doing.)
As for Windows RT and Windows Phone, Microsoft can do anything it wants. When the news came out that Windows RT would only allow Internet Explorer and would only allow programs to be loaded through the app store, the EU competition commissioner said in an interview that he saw nothing wrong with it.
That's because the antitrust case defined Microsoft's monopoly to be over x86 operating systems. Windows RT and Windows Phone run on ARM. What's more, Windows RT and Windows Phone do not have anywhere close to a monopoly of the tablet or smartphone markets.
There may be some tying issues, but branding is not a form of tying.
Thanks for the explanation!
Exactly. My first reaction to this news was "wait, didn't this already happen?", before I realized that it didn't quite happen, but the speculation at the time Elop joined Nokia was precisely about an acquisition.
Actually I wouldn't totally agree to that. Some things will have to change. Now that Nokia is not a separate entity but a part of microsoft, it will have to fit within the microsoft way of doing things. This could probably mean more restrictions on whatever Nokia would have done as a separate entity.
>>Nothing will change as a result of this.
A good guess is that the enthusiasm at e.g. Samsung for making Windows Phones have gone down quite a bit...
Windows Phones seems to be an internal Microsoft thing now, Xbox style.
> the enthusiasm at e.g. Samsung for making Windows Phones have gone down quite a bit...
It's probably part of their IP licensing deal about the secret patent list Android violates. They pay less per Android phone if and only if they build Windows Phone devices.
How would that make any sense? Microsoft would be essentially paying Samsung (by not collecting licensing fees) to just keep 1-2 phones that barely sell / are available in the WP8 ecosystem. For what? Just to say "the biggest smartphone vendor uses our software"? How does that help anything?
> This is an acquisition that arguably puts Microsoft mobile capabilities above that of Google's, and closest to Apple's.
Man.. What have you been smoking?
> They're getting industry veterans with great design talent
Who consistently failed to exceed 3% of market share.
> They're acquiring proven channels to access global markets.
Very low-margin markets.
> Both Nokia and Microsoft have been floundering in the mobile space recently; neither have had any real explosive successes. Together they might make some really compelling offerings.
According to your logic, two bricks tied together float better than one.
> According to your logic, two bricks tied together float better than one.
A sail doesn't float and a hull doesn't move, but together they can make great boats
They're already making great boats, but nobody's* buying them.
* For nominal values of 'nobody'.
I think your definition of nobody is very narrow. Wp8 is the second best seller platform in Latinamerica.
Motorola and now Nokia, the last of the previous era big wigs have fallen. 13 years ago Lucent, Motorola, Ericsson, Sun, Nortel were huge. Now they are all gone. Even HP, Dell are no longer leading. That is a really short time span for a company to be on top of the world and disappear. Is this the expected life span of a tech company?
Motorola and now Nokia, the last of the previous era big wigs have fallen.
Actually, Nokia was slowly and steadily on a rebound in the markets where they were traditionally strong. E.g. market shares of Windows Phone in the five largest European economies has grown from 4.9% a year ago to 8.2% now [1]. That's almost half the marketshare of iOS (17.3%).
Most of those units were Nokia Lumias.
Sure, it's not where they were years ago percentage-wise, but the smartphone market has grown enormously since then, and WP is showing good growth (except in the US).
Source: http://www.nu.nl/tech/3565096/windows-phone-groeit-nieuwe-sm...
Are those WP's in the hands of customers or still in the sales chanel? I suspect the last, and i do not trust those numbers. It's MS after all. If you don't know what i mean with that last sentence then learn the "classics" first.
Btw, nu.nl is not a source, really not a source. Tweakers.net is also not a source, too biased (i know you didn't mention tweakers, just sayin').
Sent from my iPad
Are those WP's in the hands of customers or still in the sales chanel?
The report [1] speaks of sales and actually claims that 42% of the sales are actually coming from feature phone owners (who probably like the price point of the Lumia 520 and all). Retail channels are not feature phone owners ;).
Btw, nu.nl is not a source, really not a source.
Of course it's a source, but you can dispute its reliability. For a substantial part of the Dutch population it is reliable enough to read daily. And it's not as if they have an agenda here.
Tweakers.net is also not a source, too biased (i know you didn't mention tweakers, just sayin').
So, what's the point of dragging Tweakers.net into the discussion?
[1] http://www.kantarworldpanel.com/Global/News/Record-share-for...
Specialized hardware was always kind of a stopgap. Even now you can see networking companies facing the double threat of virtualized networking in software. Software is eating the world as Andreessen famously stated.
As to the life span of tech companies I think it will only get shorter. One thing I find interesting is that it's difficult for humans (including myself) to really internalize the overall effects of compounding interest. I read a comment the other day in which the author was joking about how they can't wait until 2023 when they get to look back and feel how they do now looking back at 2003. It doesn't always seem that the speed at which things are happening is increasing dramatically even if that's the case. The progress between 2003 until now will be completely overwhelmed just a few years from today.
We might not be enjoying that much growth in the next century (or we might, who knows).
http://blog.ted.com/2013/04/23/the-future-of-work-and-innova...
13 years ago was the dot-com bubble. What about Microsoft, IBM, Apple, Intel, Oracle?
IBM doesn't count because that company is almost as old as the invention of the computer itself.
IBM is actually older than the computer, it was founded in 1911. (Unless you count Babbage's machine.)
That's almost exactly what I wanted to write until I read the definition of his analytical engine on Wikipedia. Although IBM says they formed through a merger of three companies in 1911, it's origins started in the 1880s and I count that as the true beginning of IBM. Note that in 1911 the company was called CTR and they kept that name until 1924, so either way I don't think 1911 accurately reflects the founding year of IBM.
Nokia started in 1865 as a pulp mill and paper manufacturer.
I found this statement interesting - "Microsoft will draw upon its overseas cash resources to fund the transaction." I've seen it mentioned quite a few times that tech companies end up with massive overseas cash reserves they can't repatriate for tax reasons. Anyone with better knowledge of finance/tax want to chime in with whether this makes the deal even more attractive for MS?
The corporate tax rate in the United States is 35%. The corporate tax rate in Ireland is 12.5%. (This is why multinationals like to incorporate their European subsidiaries in Ireland.)
If Microsoft moved money in the United States, it would pay the difference in taxes -- namely, 22.5%. But if Microsoft spent the money outside the United States, then it would not pay this difference.
Incidentally, Finland will be reducing its corporate tax rate next year, from 24.5% to 20%.
A summary of the tax arrangements used by some large American multinationals, including Microsoft, Google, Facebook, Apple, Oracle and Adobe:
http://en.wikipedia.org/wiki/Double_Irish_arrangement
As I understand it, these international profits remain in the tax-haven-resident Irish company, and cannot be repatriated to the US parent without incurring an undesirable taxation event.
It's highly likely that Finland-based Nokia is a fiscally efficient purchase for Microsoft. Both Finland and Ireland are EU countries, are in the Eurozone, and have a customs union.
(It would be interesting to compare this to Google's purchase of Motorola Mobility, which was an American company.)
This is the ultimate indictment of Steve Ballmer's "I like our strategy, I like it a lot" statement. This is the final admission that their strategy of licensing a mobile OS to phone manufacturers, just as they licensed desktop Windows to PC makers, has completely failed. This must have been in the works for months, so now finally the other shoe has dropped and we know why he had to leave. There's no way he could save face over something like this.
Just to be clear, the strategy itself wasn't the problem, just look at Android, the problem was that technically their product was technically deficient. They failed to execute the strategy effectively. What I have always wondered is whether this was simply due to hardware limitations of the day, or whether the old Windows Mobile was deliberately held back technically to prevent it competing with Desktop Windows. If the former then Microsoft just suffered from a form of first mover's disadvantage, and a lack of foresight. If the latter then they richly deserve all the failure they've reaped. I'd love to know.
Well, it's possible that the model of selling an OS to phone manufacturers has been destroyed by Google giving an OS to manufacturers as a loss-leader.
There's nothing inevitable about that though. It only works if the freebie is sufficiently attractive. For example being free hasn't helped Linux succeed on the desktop, despite it's strong position in the server space.
This can change with the open web as software and services are moving to webapps and apis, BUT asically , Linux lacks of attractive software ,services and business providing services , for the public and businesses. And no , Open Office is not a replacement for MS office, nor Gimp can replace Photoshop for professionals.
Linux is not hard to learn, has great guis and works on most of the hardware.
There is potential but all the services are not there yet. Android is valuable because of all the service intergration it offers, not because it is *nix based , same with IOS.
> This must have been in the works for months
This thing started before Elop left Microsoft. They have perfected executive outplacement as an offensive weapon.
An amusing thought, but if Microsoft was that effective at executing covert strategic initiatives, you'd think that would cross over into their public strategic capability. Sadly the evidence of events over the last few years doesn't bear that out.
Seems like Elop stayed true to his nickname - of a trojan horse. He never really worked for Nokia. He's been working for Microsoft the whole time, just to sell it for this low price.
How the hell are the shareholders okay with this? I'm shocked it sold for under $10 billion. Nokia's total valuation is about 15 billion, and you'd have to imagine they'd have to pay a 30 percent premium when buying it, so that's $20 billion for the whole. I assume the devices division was worth at least half of that. Didn't Nokia already sell the telecom part?
Presumably Nokia's management thought they were getting a good deal for the devices business, since its long-term value to Nokia seems to be approaching zero.
Now if you ask: was Windows Mobile all a plot to blow up Nokia? That's an interesting question. I can't confirm that.
That's what I thought when Elop went to Nokia and even in hindsight it seems to be the case. As a share holder, I definitely would ask questions. It seems hard to prove though; their market was falling anyway, but there are a lot of what ifs: like if they would've done Android, continued with their own OS but made it really open etc.
> Seems like Elop stayed true to his nickname - of a trojan horse.
Wonder if it was intentional to run Nokia into the ground or just sheer incompetence?
Remember Hanlons razor...
There is a running joke about the irony of the board chairman Siilasmaa of F-Secure letting in a Trojan Horse.
"Microsoft will draw upon its overseas cash resources to fund the transaction."
This is an important aspect of the deal - bringing money earned overseas into the US is often costly (taxes, etc.). As a result, US companies often end up with cash sitting overseas with nothing to spend it on, and are hesitant to take the hit that happens when they bring it to the US... so this is a great way for Microsoft to use that money in an effective way.
According to this article, Microsoft has $60 Billion sitting offshore in order to avoid US taxes: http://www.forbes.com/sites/connieguglielmo/2013/08/01/apple...
Key graff: "The average tax rate these companies currently pay to other countries on this income is just 6.9 percent, well below lower the 35 percent statutory U.S. corporate tax rate."
As I recall we (the US) have the highest corporate income taxes in the developed world. It would be a gross dereliction of management's duty to shareholders to repatriate it unless really needed.
No corporation pays 35%. There are far too many loop holes. The US has the highest rates ON THE BOOKS if you take ZERO deductions and write-offs.
http://thinkprogress.org/economy/2013/04/01/1804801/no-ameri...
Trivially falsified (the link):
"Total corporate federal taxes paid fell to 12.1% of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30.... And well below the 25.6% companies paid on average from 1987 to 2008."
I wonder just what happened starting in early Federal FY 2009, which started on October 1, 2008. Perhaps this: https://en.wikipedia.org/wiki/Great_Recession?
Now, when we're talking about seriously profitable companies I don't deny there are tax breaks to be had, some easy, but does anyone think these companies are better off focusing more on financial engineering or software and electrical engineering?
You might compare the parking of cash offshore to Microsoft's buying a $100K Treasury instrument whenever they had too much cash on hand, as their first CFO was horrified, amazed and delighted to discover.
ADDED: is this double taxation? In another HN item on this, it was commented that this parked money has already been subject to local taxes: https://news.ycombinator.com/item?id=6321925
I know we do that with personal income taxes, absent a tax treaty with the other nation.
Microsoft also used offshore money to buy Skype.
Software is eating the world. For real now. And it is eating hardware. This is such a strong force that even old time franchises like Microsoft and Motorola can't do anything about it. And apparently "pure software" companies don't mind venturing into it. They know it's software, for the most part, and believe vertical integration is worth the trouble with the messy hardware parts.
How deep is the integration anyway? Did Google and Microsoft end up owning the manufacturing plants? Apple is known to outsource the manufacturing itself.
This news may sound exciting/disappointing to the developed countries, but it is certainly extremely disappointing for people in third-world countries, especially India.
It is not at all hyperbole to say 'Nokia played a key role in India's mobile penetration'. They sell affordable, reliable and rigid phones for rough use in rural places of India. And I think it's true for most other countries like Africa. On the other hand Microsoft mostly makes premium software and hardware. I don't know any affordable tool(w.r.t developing countries) from Microsoft. This may put Microsoft in a better position in terms of smartphone. But in other terms this may be a step towards 'diminishing power of poor people'.
On the other hand, the low end lumias are more usable than most of same priced android phones in Brazil, I know that here and parts of africa is the way the market is going. I hope they don't stop serving this market.
The low end android sets made by Micromax, Lava etc. are priced very affordably (Rs3000-5000/$50-80). And the market is still flooded with even cheaper feature phones. I don't see how the power of poor people is diminished.
Motorola is building featurephones until this day. Lots of them. Nokia is not going to abandon that market (India's) anytime soon while they are selling there. I would not worry about it too much.
I think this has been expected since the Nokia Windows Phone bet. I suspect that this is not unrelated to the Ballmer departure.
I'm not sure it does either company much good. If anything it looks to me like a panic move of two companies who while from te outside they seem huge and successful to many are actually seeing the writing on the wal and have no real plan for the future.
This won't make Microsoft competitive with Apple where it wants to be despite the hopes of Redmond.
Annual cost synergies of 600MM within 18 months - sounds like they plan to kill 3000 jobs.
http://www.microsoft.com/en-us/news/download/press/2013/Stra... (page 21)
Nokia, rest in peace - we will miss you. Your phones were legendary.
Erm, they still are and will be in the future.
they bagged the guys who designed them as well.
You might be unfamiliar with what happens after a corporate merger.
Usually there is a decision to remove duplication within the corporation. If you were Elop next year running MS in Redmond, who would you lay off? The people in your building or those in the opposite side of the world in Finland?
Update: On a side note, manufacturing usually stays until the machines are no longer worth using. Then they shut the place down claiming inefficiencies and build a new factory somewhere else. They don't mention the lack of investment for 10 years of course.
On the software front, that already happened when Nokia decided to use WP8 and ditch their own software.
On the hardware front, MS might actually enjoy having more hardware engineers to help with the Surface/Xbox stuff.
HR, payroll, etc might be not that safe though.
Sad to see Nokia going the way of the dodo.
Hear hear.
A black T-shirt today. :-(
The press release says Microsoft will acquire Nokia’s Devices & Services business and license Nokia’s patents and mapping services. So what happens to the rest of Nokia?
> So what happens to the rest of Nokia?
Nokia keeps the other two divisions.
Nokia is now primarily a telecoms infrastructure company, like Alcatel-Lucent. They're pretty closely matched. Alcatel-Lucent had €14.4 billion of revenues in 2012, while Nokia Siemens Networks took in €13.1 billion of revenues.
There's also the mapping division, but that's just 10% of the new Nokia's revenues. I'm surprised Microsoft did not buy it, as Google and Apple both own their own maps. In fact, I wonder if the mapping division wasn't what scuttled the previous attempts to reach a deal.
> Nokia Siemens Networks
NSN is no longer Nokia Siemens Networks; it's Nokia Solutions and Networks now, and Siemens is no longer part of it.
The deal closed in August 2013. It would have been inaccurate to refer to it as Nokia Solutions and Networks when giving 2012 results.
"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)."[1]
It'll still exist. Most of the top executives are moving to Microsoft as part of the deal though.
I am curious if this deal required shareholder consent of any type. I'm sure the board had to approve. Still I don't know how I'd feel if I was holding onto a decent chunk of Nokia stock right now and I didn't get any say in selling out our core business.
[1]http://www.theverge.com/2013/9/2/4688530/microsoft-buys-noki...
"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."
So yes, it will require consent from Nokia shareholders.
Nokia bought Siemens part of Nokia Siemens Networks earlier this year. That will be their focus onwards. Ericsson did the same many years ago (when Nokia started to dominate the mobile phone business) and is now the biggest networking company.
And now Microsoft has a hardware division. I can easily see most hardware vendors being ousted by the trio of Google/MS/Apple - all of whom now either make or have been making their own hardware to go along with their software. And so the walled garden grows...
They already have several hardware products including Xbox, Kinnect, keyboards, mice, and the Surface.
With the exception of the folks doing keyboards (which they have been serially been screwing up for the last ten years) Microsoft has some very good hardware people. The Surface was a nice piece of kit, but way expensive (for unavoidable reasons, I hear) and running the wrong software (also for unavoidable reasons).
I remember their developer evangelists were running around showing off some $3000 Samsung tablet PC prior to the Surface and Surface Pro being released.
People think the Surface is expensive because they compare it to the iPad or Nexus 7/10 product lines, but it seems like Windows RT is closer to a port of Windows 8 to ARM than anything else, which makes it seem odd that you'd think to run Windows Rt on a $200 tablet.
The surface is using the same CPU as the 199$ nexus 7 (tegra 3) so the internals are more or less the same.
I think (s)he was talking about what used to be called "Surface", which is now called "PixelSense".
But now they're in control of a hardware vendor - one in a position to allow them to close off WP8 to other OEMs, and potentially a future version of Windows.
Right, don't mention ze Zune.
How did I forget Zune?
Forget what?
We've yet to see Google do anything interesting w/ Motorola though (unless I've missed something). The Nexus line are all currently built by LG, no? So sure they own Motorola, but they haven't (tightly) integrated it into their Android plans.
Moto X
> Interesting...
The Moto X has two interesting clusters of features:
1) The obvious one and only mildly interesting is the customization. I believe that will appeal to a large market segment.
2) The less obvious and more creepy one is the battery saving combined with the always on features. I believe this is very much the Google vision at play. The Moto X is always on, aware of its surroundings, and integrated with Google Now. I see this is part of the same vision that created Google Glass, and ultimately will be a Google chip in your brain.
How well it works in practice I have no idea. Google Now haven't impressed me, it best it tells me what I wanted to know 15 minutes ago. The Moto X features be utterly useless. But the direction is definitely interesting.
The phone is clearly not interesting to those mainly interested in peak CPU performance, DPI, or screen size. I'll also skip it for now. Let someone else be guinea pigs.
Exactly. This acquisition gels well with the "devices and services" narrative. It helps that Microsoft has good hardware division, and combined with Nokia I hope they find traction in Mobile market. This is a good acquisition for MS, as Nokia was already on WP. I wonder what happens to the rumored Nokia tablet now.
I found Microsoft's strategic rationale for this deal interesting: http://www.microsoft.com/en-us/news/download/press/2013/Stra...
Speaking of handset makers that missed the revolution, I wonder who will pick up RIM as they circle the drain. Microsoft is probably the favorite right?
Now that Microsoft is buying Nokia, it seems unlikely that Microsoft will buy Blackberry. Unless it's a firesale for the patents.
Note: RIM changed its name to Blackberry Ltd, with a stock ticker of BBRY.
I'd say Blackberry is the big loser in this deal, since it probably takes one of their more plausible options off the table.
RIM's two selling points still seem as relevant as they did last week for MS: patents and the loyal but shrinking customer base.
How loyal would the customer base be if Blackberry switched to Windows Phone? Would they be any more loyal than Symbian users when Nokia did the transition?
This is why I mention only the patents. Those are clearly valuable. The customer base is debatable.
If Blackberry goes into liquidation the customer base breaks more or less like the market and WP get's .1% market share. Otherwise if they buy BB and can hang onto half of those customers. That would almost double WP's market share. Those customers are worth more to also ran WP than anyone else.
I'm just guessing that MS would probably want to digest one phone manufacturer before immediately buying another. Integrating one team is more than hard enough.
With the apparent growing trend on emerging markets of Windows Phones (the Lumia series produced by Nokia, and pushed by carriers on LATAM like Telcel/America Movil)
This seems like a great move from MS, they have bought more runway.
But come on, the move was telegraphed a couple of years ago.
What would this mean for all the Nokia feature phones ? The latest Asha series was very good and selling pretty well at least in India. How would this figure in MS strategy? Are they going to ditch it? That would be sad, because Nokia still makes phones that can withstand rough use. On the other side would Nokia start manufacturing Laptop in future. I would really like Nokia design team to come up with a good Windows laptop!
One of Microsoft's documents about the acquisition calls out that it is getting the Asha brand and a 10-year license to the Nokia brand for feature phones, so I expect that line will stay for now.
I wonder if the Asha design will go from Meego-like with Nokia squircles to a Metro-like square theme? I personally love my Asha 501, but wouldn't want a WP8-light version.
Also, will they "upgrade" Nokia Xpress's (proxy browser) backend to use the IE engine in place of Gecko?
Wow, I can't say I'm completely surprised but still. It is an amazing thing. It has to be pretty scary these days to be a phone maker.
The old fat couple in the room had a dance and #microsoft just ran out of things to say, so in order to avoid an awkward moment (high end sales are abysmal) he proposed. #nokia looked around, didn't want to die alone, and like any scared middle aged woman, said yes.
I hope Ballmer and Gates have a dedicated CEO in mind now that Ballmer's leaving... very few people will be able to lead a company this large, and it will be quite a tragedy if Microsoft's reputation declines and takes down Nokia with it.
I heard a rumor that Paul Graham is being courted, but it is probably disinformation.
Microsoft could do a lot worse :-)
I would be very surprised if either party was interested in PG being CEO of Microsoft.
Haha good lord no. I doubt either party would be in any way interested.
Slightly off-topic : For hackers outside the USA/EU I think Microsoft succeeding can be a bad thing since Macs are really expensive here and Microsoft silently allowing piracy means that everyone uses Windows. I feel that ISVs better supporting Linux would be a nice thing and one of the important things to happen for that is for Windows to loose its monopoly ( second is of course some sort of agreement between all Linux distros around some standard ). I can't but feel that is to be a distant dream, since Microsoft seems to have infinite pockets and can buy their way out of any trouble for years to come.
Microsoft has destroyed companies before :
See : http://www.theregister.co.uk/2009/09/09/microsoft_destroyed_...
I wonder if this played into Ballmer leaving. Odd to have a massive re-org and massive purchase, only to have the CEO turn around and leave right afterwards.
The timing of this is completely laid out. It looks too perfect and these deals take time to arrange and agree, they are not done in a week.
So, is there any Nokia left after all this?
> So, is there any Nokia left after all this?
Yes, it leaves Nokia Siemens Networks and HERE Maps.
Last quarter, NSN accounted for 49% of Nokia revenues, and 108% of operating profit. (Not a typo -- the phone division lost money.) HERE Maps is insignificant, but for some reason Nokia wanted to hang on to it.
So, Nokia now has a slightly increased operating profit, plus an extra €5.4 billion from Microsoft. According to the press release, when you subtract out the purchase price for the "S" half of NSN, Nokia has €7.8 billion in net cash. For a company that closed yesterday at a market cap of €11 billion.