Microsoft buys Nokia’s phone unit
It what came as a surprise to me, Microsoft has paid $7.2bn for Nokia’s phone unit (devices and services), its patents and its mapping service.
Nokia current have around 14% of the mobile market, but I believe only 8% of the smartphone market with its Windows Phone 8 operating system. Not sure what the remaining part of Nokia will now do with no phones or patents ? At its peak Nokia contriuted to a quarter of Finnish growth 1998-2007.
Microsoft has agreed a deal to buy Nokia’s mobile phone business for 5.4bn euros ($7.2bn; £4.6bn).
Nokia will also license its patents and mapping services to Microsoft. Nokia shares jumped 45% on news of the deal.
The purchase is set to be completed in early 2014, when about 32,000 Nokia employees will transfer to Microsoft.
Anyway I wish Nokia all the best in its Microsoft clothes.
B.T.W. Loving the speculation about whether Elop will be the new Microsoft CEO 🙂
Quite a surprise! Nokia actually has a really good mapping service and that piece might give MS an edge in that market.
So...what will Nokia do now? I remember having a Nokia television in my hotel room a couple of years ago...
Yeh I agree, excellent mapping service.
I bought a new Nokia 105 (series30) last week as an emergency car phone (Fantastic battery life) wonder what will happen to these products ?
I've also got a spare in case I go camping or on an overnight hike: the battery lasts 3 or even 4 days compared to half a day for my smartphone.
I anticipated that Nokia would have a chance with its entry level phones given the huge growth in African and Asian networks. However, it looks like Chinese handset makers were able to grab that market.
It also lasts for months if you switch it off.
A surprise? Really? Surely this has been Microsoft's plan all along?
I have a really bad feeling about this. Nokia might continue being Nokia for a year or two, but eventually I expect Microsoft will suck them in and ruin them. They were a fantastic company up until the iPhone appeared, and then they lost their way and never found a way to compete. Apple started the decline and I fear Microsoft will finish it.
I'm not sure where this leaves Windows Phone. If I was HTC I'd be a little worried. Will Microsoft go for a "wholly owned phone" and be less friendly to partners? It wouldn't surprise me, although I think that would be bad for the platform.
With Blackberry surely being close to disappearing also, I guess we're heading for an iOS/Android duopoly for a while. Until the next revolution.
I think Nokia (remains of) could just do with the money. Or perhaps Elop had a lot of shares and needed to realise them.
Having a duopoly of iOS/Android makes it simpler for coding 🙂
I had the good fortune, life opportunity, to spend 18 months at Nokia's Research Center (NRC) in Helsinki in 2001, and the situation today is a product of the sponsors/stake-holders not approving the projects running at that time the light of day and that is such a shame. The innovations on the research center desks at that time were so far ahead.
It was a life opportunity to be there and I will never forget it. Thank you Nokia.
I hope all of the great people at NRC have a good future.
All the best,
I experienced Nokia's forward thinking approach first hand in 2008 at an event in Helsinki they called "Openlab". An overview blog about the event is here: http://blogs.warwick.ac.uk/steverumsby/entry/nokia_open_lab/. I guess this was organised by the NRC? They flew me, and many others from around the world, there, provided accommodation, entertainment, etc. It must have cost a fair amount and they took it very seriously.
After that event I was really hopeful Nokia would be able to continue producing innovative devices and services. They certainly seemed to be trying hard. Sadly nothing came of it. At the time they said they were planning another openlab, but that never happened. I spoke to many Nokia people during the event and they were all enthusiastic about the whole process and what they were trying to achieve. I guess the management didn't share the vision?
Ironically, I and several other people there turned up with a shiny new iPhone 3G, and as I see it that was the device that marked the end of Nokia. They never came up with a device to match it.
I'm quite sad to see it end this way.
I just read the blog, it sounds like a very interesting event and a priviledge to attend.
Quite aside from the mobile stuff, the event showed me the possibilities of Twitter and got me using it properly. It is the event I mention in this blog - An introvert's journey with social media - that really started my social media journey. And that led to my use of SCN, getting to know so many other people in the SAP world, and ultimately to my Mentorship. That really is all Nokia's fault 🙂 .
Another reason to be sad to see their demise.
another nice blog.
I can say, this new SCN platform has accelerated my interest in the Social side of technology.
Although I was one of the stick on the muds at the time, I am thankful for SCN moving to this social platform.
I am wondering how good the gagging clause is ?
Could Nokia (remains of) invent a watch phone for instance and get away with it ?
I guess time will tell 🙂
A few random thoughts...
This acquisition is bound to help both Android (especially Samsung) and Apple. Mobile operators are not particularly enamored with Microsoft, even though their mobile OS is rather good (spend some time with someone that uses it to its potential). Still, what could happen is that Microsoft tries to create a somewhat "closed" mobile ecosystem not that dissimilar from what Apple has successfully done. That leaves Android as the more "open" mobile environment with all of its fragmentation. Of course, as noted by Mr. Rumsby, HTC should be worried, as this might not be too good for Microsoft partners.
Still, I'm curious to see how Microsoft would handle all of the non-Windows feature phones that Nokia has done well with.
Elop needs to completely exit Microsoft, as his history at Nokia didn't bode well for its "turnaround." Still, as evidenced by Microsoft not doing much with Skype (yet), I'm not holding my breath for a significant resurgence in the Nokia/Microsoft brand. Ian Fogg, a respected mobile analyst, noted that "Microsoft must increase both the quality and quantity of third party Windows Phone apps. It must spend tremendously on marketing and channel incentives to drive Windows Phone awareness with consumers and ensure Windows Phones are widely ranged by mobile operators."
Here's Ian Fogg's analysis: http://www.screendigest.com/news/2013_09_microsoft_raises_mobile_stakes_by_buying_nokias_devices_business/view.html?start_ser=mi
And remember that Nokia (what is left, which is basically the infrastructure group - NokiaSiemens), cannot launch a new mobile handset device until 2016.
Any commentary about Nokia cannot be complete without Tomi Ahonen - noted mobilist, speaker, and author: http://communities-dominate.blogs.com/brands/2013/09/another-death-in-smartphone-bloodbath-windows-phone-strategy-so-failed-now-nokia-handset-unit-sold-t.html
on top of what Ian Fogg says, I think in general, Microsoft needs to make their pricing more competitive especially in the Tablets market.
This year, as a Performance Management Process Benefit Bonus, Father Christmas is expected to bring my daughters ipads. They won't be ipads, I expect they will be Android, but in my daughters' world, Tablets are catagorised as ipads.
As my daughters are using Microsoft pc's at school and at their younger age, to stay on the same platform, I was curious that maybe Father Christmas would bring them Microsoft Tablets, but having checked out the prices, Father Christmas's helpers in Lapland said, "that's too expensive", and so, the Tablets will be Android.
I think this is another mistake of Microsoft's because once my daughters get started with Android products, it is more than likely that they will continue with the Android family of products in the future, and by having such significantly higher prices for Microsoft Tablets, Microsoft are missing out on locking in the next generation of customers.
Just my two cents.
All the best,
thank you for posting this blog.
I am highly disappointed with this news. I remember when I purchased my first mobile phone Nokia 1100 during my engineering . Its battery was just awesome. I just loved it. Nokia had been market leader for 14 years and provided a significant boost to the Finnish economy. After launching iphone and Android OS, Nokia failed to meet the smartphone challenge.
I read it somewhere that Nokia was also hit by a shift in electronics manufacturing from Europe and the U.S. to Asia and other low-cost regions.
To rejuvenate itself Nokia teamed up with Microsoft replacing its old operating system with one based on Windows and consumers didn't warm to it.
I believe Nokia managers failed to recognize the popularity of clamshell models and were slow with touchscreen phones, even though its own engineers reportedly had developed a touchscreen model years before Apple and other competitors.
The biggest mistake was killing s90 UI.
Yeh I love Nokia for its engineering too, my first one was a Nokia 2110i which was a very early SMS Short message service phone ! AKA texting. And it could do internet comms via its onboard modem. (Pre GPRS era)
Microsoft acquiring Nokia, It was a rumour from last one year when Nokia started failing in the smartphone competition. And now it became true.
So I am eager to see what Microsoft can do with Nokia. Expecting a new innovation.
- Midhun VP
I think Microsoft will try and do its best, but its Microsoft ! I guess Microsoft Nokia might get the XT tablet business as well ?
Nokia with its series 30/40/asha phones is still number 2 worldwide. (See chart on original blog) wonder if Microsoft will continue these curious phones ?
Hello All, It's 2016 and I wish I saw it in 2013. Nokia is a great company and great brand, they had UI mistakes with Symbian, Symbian belle should have came out in 2010 but it came a year late and then asha should have been launched in 2010 that too came late.
Nokia made a big mistake when s90 was merged with s60 and keypad based ui were given preference as only a few years later Apple came with iOS and Nokia was playing catchup putting touch capabilities to s60 and the N97 was a disaster the software killed the beautiful hardware Nokia created. Nokia should have kept s90 investments going and may be at a lower scale but they would have had a pure touch UI that they could have easily scaled.
Nokia always was and is an engineering company that has excellent industrial design talent and they continued the tradition with Fabula design and PureView(Nokia Lumia 1020 still the world's best cameraphone) till the last Nokia Lumia 930 🙂
As reported here and in a wrong way Nokia only sold design patents not utility patents and they are major revenue contributor today. True to Nokia spirit the excellent NRC that was always ahead of it's time is now part of Nokia Technologies creating amazing new technologies like Nokia OZO first professional VR camera and they are about to enter teh digital health segment. Nokia introduced Z launcher and Nokia N1 tablet and finally by 2016 Q4 the non compete agreement with bloodthirsty Microsoft will be over and the beautiful Nokia branded phones designed by Nokia and true to Nokia quality that we love will be back in the market. The main business of Nokia today is Networks and they have combined with Alcatel Lucent to create an innovation powerhouse. They are leaders in LTE and upcoming 5G and IP and optical, etc etc but best part is a connected future society with 24X7 connectivity needs smart 5G networks, the success of IoT, connected driving, remote health monitoring, smart cities all will be built on top of the technology foundation that pioneers and true innovators like Nokia.
Android is a commodity game copy pasted from iOS and people have started understanding that each new successive generation of iOS brings nothing new except screen size and CPU, RAM changes with incremental software updates. The spell will break.
Nice summary Prasenjit,
I was at NRC in 2001, an amazing building near the center of Helsinki.
The entrance hall to the building was as big as a cathedral, a huge room, and it was empty, apart from a wooden box, a big wooden box, but on the scale of the room, the wooden box didn't look very big.
When you entered the wooden box, it was actually a lecture theatre, a big one, but from the outside, because of the cathedral like size of the empty room, the wooden box lecture theatre didn't look very big.
There used to be lectures in that theatre from visiting stars of the IT world like Linus Torvolds.
Must have been great experience of the good old times, Nokia was the dominating the industry and Linux was catching up towards it's dominance.
Nokia and Linux --> Finland rules a small country but brilliant innovation and a great company and brand.