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back to article Microsoft's $7.1bn Nokia gobble: Why you should expect the unexpected

With Microsoft’s purchase of Nokia’s mobile business for $7.1bn, the Redmond software giant has finally become a phone and device maker. The deal gives Microsoft Nokia’s global handset engineering, manufacturing, sales and distribution business; the family of Windows-Phone-powered Lumia smartphones; a war chest of 8,500 Lumia …

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Holmes

“Stephen will go from external [candidate] to internal”

Did Elop ever actually leave?

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Anonymous Coward

Re: “Stephen will go from external [candidate] to internal”

Of course. If the Nokia board had said "no" to his Windows Phone plan then he might have left.

Looking at the graphs of income and profit it seems when Elop joined there was a spike in income and profitability, so he must have won over the Nokia board. But this spike was sadly short lived and he made his burning platform speech instantly killing any confidence in current products.

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HMB

Re: “Stephen will go from external [candidate] to internal”

While I've no doubt that senior execs calling their platform a burning one does have influence, don't let the tail wag the dog on this one. The market was being torn away from it's long standing affair with Nokia in a powerful way and Nokia had no products that could compete on the level of innovation and slickness that the new arrival of the iPhone had. Nokia had become slow and complacent.

Even my old Nexus One was some way off the polish that Apple had achieved. It was Jobs that tore Nokia a new one, I don't think the average guy on the street cared very much about Elop talking about burning platforms.

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Silver badge

Re: “Stephen will go from external [candidate] to internal”

>Nokia had become slow and complacent.

Unlike Microsoft, who are fast and humble?

Nokia certainly had serious issues, not least of which were the disastrous effects of the increasing Americanisation of its corporate culture. But there was a huge amount of talent and potential there, and a good CEO could have turned the Big Finn around.

Instead Nokia got Elop.

Still - Elop haters will have their revenge if he gets the top job at MS, because he'll run MS into the ground too, turning a corporate farce into a rather predictable Greek tragedy.

As for the products - given WinCE, Kin, Win RT, Surface, Win 8, and other Redmond dodgy-fat-uncle-at-the-student-wedding products, it's hard to imagine a future that doesn't include a tsunami of utter mediocrity.

WinPho might be okay at some point. But okay is nowhere close to good enough. And MS really doesn't have the talent - or more specifically, doesn't have the management or the culture - to do better.

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Anonymous Coward

It's the shareholders who will seal the deal on November the 19th. They may also decide that their shares have not been valued high enough.

Lets face it, Microsoft is desperate and they should hold out for more. Of course Nokia is also desperate, desperate to offload a division producing products in a very difficult market.

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Bronze badge

Do you think they will learn how to pronounce the name of the company they've just bought?

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Anonymous Coward

How do they say it? No - kia?

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How is it pronounced in Finland? Does that matter?

I think it is Nok ee-a in UK and No key a in US. From Wikipedia it is noc-i-ar ('n'anny, ch'o're, s'c'old, k'i'd, f'a'ther).

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Headmaster

Knock-ya.

One video also shows the Bubbles lock screen, which was unceremoniously dropped because it might have drawn resources away from WP's amazing lock screen.

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Def
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Or maybe the bubbles lock screen was dropped because it's a terrible idea.

It looks cool, but breaks just about every rule of interaction design out there. Having moving hit targets that never start in the same place, or move in the same way will just frustrate users beyond belief. Especially on a device that requires you to block your line of sight to actually interact with it. Even if we do eventually get see-through fingers, it's still an awful concept.

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Interesting comparison with the Skype purchase

Nokia looks like somewhat better value for money

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Nokia is more than a single division

"Nokia’s stock actually rallied on news it was finally going to stop trading as an independent company"

They are buying one of its divisions (the loss making one) for about half of its market capitalisation at the last business day close. From a stock perspective Nokia is going to remain as an independant company, just not making phones any more.

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Re: Nokia is more than a single division

>remain as an independant company, just not making phones any more.

Well considering they killed most of their internal software on the phone side I am sure this is just a small bump and they will be just as big a few years from now. Probably not of course but they might actually start making money again I guess.

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Windows

Hum, I wonder.

Hum, I wonder what this means for Windows. Is Microsoft more than just assuming or betting that phones are/will be the natural evolution of the desktop?

If so, here we could be witnessing the beginning of the decline of Windows--desktop version. In the future, historians may call this date a turning point.

In the short term, I wonder what effect it'll have on the next few desktop versions of Windows.

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Re: Hum, I wonder.

Afterthought, perhaps too this is Ballmer's parting shot at Google. (Strikes me he's the sort of guy who doesn't get over a grudge easily.)

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The dancing dad of IT

They bought aQuantive to challenge Google, and in doing so dissolved $6bn dollars to nothing in a matter of months. To challenge Google they've thrown cash at Bing, and created the search engine nobody uses. The wasted money on Soapbox to challenge Youtube - anyone remember Soapbox now? They blew billions adding a touchscreen interface to Windows 8 to challenge Android, and the world and his dog hate it. They conjured up Surface to challenge Chromebooks even after Google had largely strolled on from them.

Seems to me that Microsoft are really desperate to be Google, ignoring the fact that Microsoft investors can already have their share of Google simply by buying the shares. Like a badly dancing dad, Microsoft are embarrassing themselves with failed attempts to keep up with the kids. Nokia have actually done the decent thing here, and let go of a business that they can't be successful in any more. Microsoft on the other hand have failed to learn that their business is a monopolistic enterprise gouging cash cow, and that's all their investors want. The laugh is, that even if they did make a Googlealike, by the time they have achieved that Google and its current business model will have either been supplanted by a newcomer, or morphed into something different.

Milk the existing franchises, but stop pretending you're going to create anything new, Steves.

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Re: The dancing dad of IT

I think they try to be Apple more than Google here.

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Re: The dancing dad of IT

Suppose somewhere in the Nokia patent portfolio there is one on saying the word "hello" on a mobile phone or something similarly ridiculous - that Microsoft can use to threaten all the other makers.

Remember they already make about 4x as much from patents on Android phones as they do on their own winPho.

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Anonymous Coward

Re: The dancing dad of IT

Bing is good for finding porn, because you can turn SafeSearch completely off, something Google doesn't support anymore.

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Windows

Re: The dancing dad of IT

Bing is good for finding porn, because you can turn SafeSearch completely off, something Google doesn't support anymore.

You can't? News to me.

Maybe you should talk to your mom.

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Thumb Up

Re: The dancing dad of IT

I think what he means is that you can use Bing to expressly search for these um... Highly educational clips from other sources and, not just those that land on YouTube. To be fair its about the only thing I can honestly say I have ever used Bing for....

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Thumb Up

Re: The dancing dad of IT

I will admit Bing is quite good for video searches, it even plays previews on mouseover. Which can be more of a hindrance than a help if you accidentally leave the mouse in the wrong place and the audio of a, er, Party Political Broadcast starts blaring through the house...

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Re: The dancing dad of IT

"Remember they already make about 4x as much from patents on Android phones as they do on their own winPho."

Wouldn't it be nice if those companies paying that patent fee found a way out of it. It would do them good. It's bad strategy in the long run to keep financially supporting a monopolistic tyrant company that exerts control over the computer industry. One that is doing great harm to it with that control.

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Trollface

Way out of patents

Way out of US patents == Way out of US market. If those companies slap a sticker on their product "Not for sale or use in USA", who's to stop them? It seems to me, the USA market is already saturated with both mobile phones and patent lawyers, anyway…

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Facepalm

Re: The dancing dad of IT

"...thrown cash at Bing"

But ... Microsoft’s Bing uses Google search results—and denies it.

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Anonymous Coward

Microsoft need to change

They need to make products that CONSUMERS want. Right now their strategy is to force feed consumers what MICROSOFT wants consumers to want.

Until they understand that they can't polish the Windows Phone, Surface Xbox and Windows 8 turds to be any brighter, and that they need to reboot, nothing is going to change, no amount of acquisitions, no amount of changing of CEOs, no amount of press bribery.

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Windows

@A.C. - Re: Microsoft need to change

We know that, and many wish Microsoft would change. But think of it from Microsoft's perspective: the way MS has been doing business over several decades has made shareholders, Gates, Ballmer et al filthy rich. As Sir Humphrey would say, it's a courageous decision to bet the company on a complete change of direction.

As they say, watch this space.

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Holmes

Re: Microsoft need to change

Where have I read this before...

Oh, here: http://forums.theregister.co.uk/forum/1/2013/09/03/microsoft_just_bowled_a_googly/#c_1945098

Hmmm. Anti-Microsoft; overuse of capital letters; repeating the same line over and over; bellicose language; posting anonymously (perhaps to avoid some sort of ban)........

Could it be....?

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Thumb Up

Re: Microsoft need to change

Be vewwy vewwy quiet... I'm hunting Eadons...

+1 for spotting the copy-pasted anti Microsoft rant and giving me a smile on a crappy sleepless night.

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Holmes

Re: Microsoft need to change

"no amount of press bribery."

Hmm ... you know, Orlowski *is* very quiet on this whole subject right now.

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Unhappy

Hey, Steve... it's MicroSOFT, not MicroPHONE...

If I owned a cash cow like Windows, I'd certainly take better care of it and pay it more attention. Instead of always looking for some other pet project to play with...

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Re: Hey, Steve... it's MicroSOFT, not MicroPHONE...

Just like Dec did with minicomputers, Sun did with workstations and IBM didn't do with mainframes ?

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MS's most successful venture in the phone business has been bullying smaller companies into licensing its patents. What's the betting that in a few years they will drop the hardware AND the software and become a full-time patent troll?

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So:

MS fail to negotiate a Nokia buyout around 2 months back

Last week or so we discover Lenovo failed to negotiate a buyout

Today MS rush into a buyout

Tempting to think someone just shafted MS before Elop could destroy enough value, using Lenovo to panic them into hasty action. Wouldn't want them talking to Google or Samsung and buggering up the plan. Helped by Ballmer quitting, any trojan horse plan would need finishing in a hurry while people that knew about it were still employed - there won't be a paper trail.

If true, just how little is Nokia really worth right now if $7.2bil is assumed more than it's worth?

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"Tempting to think someone just shafted MS before Elop could destroy enough value, using Lenovo to panic them into hasty action.

Elop was a Trojan Horse.

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Anonymous Coward

"Elop was a Trojan Horse."

A very poor one then. Lumia sales are increasing at over 30% a quarter and Nokia were expected back into profit before the end of the year...

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"A very poor one then. Lumia sales are increasing at over 30% a quarter and Nokia were expected back into profit before the end of the year..."

Hehehe. This is cute :)

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"A very poor one then. Lumia sales are increasing at over 30% a quarter and Nokia were expected back into profit before the end of the year..."

Hmmmm ... unrealistic conclusions drawn from unsubstantiated figures. If it wasn't for the fact that Elop's ego wouldn't allow him to admit being "poor" at anything, I'd suspect that AC might stand for SE!

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I predict that sales of my dog turd powered phone will increase by 100% over the next year (someone might actually buy one)

just saying an objects sales have increased by a percentage quantifies nothing (a million percent of nothing is till nothing)

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Anonymous Coward

Copying Google

Google bought Motorola for a hardware division / patents.

Microsoft bought Nokia for a hardware division / patents.

Not sure Motorola has been a particularly spectacular investment for Google...

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Joke

The real reason

Microsoft made this purchase not for the patents but for the real crown jewel. The service formerly known as the Ovi store.

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Re: The real reason

As easy to as it is to take potshots at Ovi it still better than Microsoft's online offering by quite some distance.

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Bod

Re: The real reason

"As easy to as it is to take potshots at Ovi it still better than Microsoft's online offering by quite some distance."

Have to admit, you're right there, and that's saying something considering how awful Ovi is/was? !

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So who makes MS phones?

To their advantage, they aren’t major shippers of Windows Phone handsets: 81 per cent of Windows Phones sold were made by Nokia, with Samsung third a long way behind on 11 per cent, according to number crunchers at IDC.

So No 1 makes 81%, number 3 makes 11 percent leaving at most 8% for number 2, err that's less than 11%?

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How the heck?

"... 8,500 Lumia and Asha phone patents ..."

How on earth can you get 8,500 patents from developing two smartphones.

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Re: How the heck?

How? The same way you can for rounded corners.

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Re: How the heck?

I'm guessing they've amassed those from their decades of work on materials, earlier UI/X design work (e.g. the NaviKey, menu structures, and fancy hinges - even if they never used them in Lumias/Ashas); baseband technology (e.g. ISI, antenna design, and power management) - even if some of it was hived off onto Renesas, who eventually flushed it away; core telephony standards; cameras/imaging tech (especially after they absorbed Scalado), and probably whatever they acquired from Symbian, SmarterPhone, and a bunch of other companies, or otherwise developed themselves.

I'm assuming that a ton of patents went to MS, and some troll/"licensing" firms, though.

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Too late. All my customers want:

Apple

Google Apps

Amazon

VMware

Red Hat

Cisco

EMC

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Anonymous Coward

Shame

Can anyone name a Microsoft acquisition that they didn't completely ruin? Usually almost immediately?

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Re: Shame

Visio?

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