6 ms·

Microsoft 'mulled Nokia buyout, ran away screaming'

71 points by antr 14y ago

SlipperySlope 14y ago
"The nightmare scenario for Nokia is that the one I [the author] described here back in January: that there really isn't room, in reality, for a "third ecosystem". In this scenario there's Apple and Android, leaving RIM and Nokia fighting for crumbs. Today, the health of WP as an "ecosystem" isn't obvious: Samsung, Dell, LG and HTC all seem to have given up. Only Nokia makes a noise."
- hef19898 14y ago
  depends what kind of impact win8 has on the tablet market. seems like android is kind of weak here compared to iOS. If Win8 gets a big enough chunk of that and if WP8 is more or less compatible with win8 on an app level win8 powered tablets could pull windows phones along enough to get reasonable market share. Microsoft certainly has the reasources and cash to at least try that. As far as RIM is concerned, I see their future as kind of bleak...
  - technoslut 14y ago
    Leveraging tablets to increase WP sales is the best path for MS to take but they are playing a dangerous game. Windows 8 on the desktop will be a serious adjustment for consumers and very early reviews seem to indicate that. The perception of Windows 8 on the desktop could adversely affect WOA.
    - hef19898 14y ago
      Sure it's a gamble, and a risky one for that. But continuing business as usual is IMO even riskier. Possible that Win8 could face the same fate on desktops like Vista did. How that wuld effect customer perception of Win8 on tablets, well good question. the main benefit I see in Win8-tablets is that you finally get a real computer for the price of a real computer and not an oversized smartphone you can't use to make phone calls for the price oy a computer. But that's just my opinion.
- inoop 14y ago
  Windows Phone is not something that stands on its own, Microsoft is building a powerful ecosystem comprising a desktop OS (win8), tablet os (win8), smartphone os (wp8/apollo), gaming platform (xbox), and tying it all together with a cloud infrastructure (skydrive, hotmail, bing, bing maps, etc.). Of course, the desktop/tablet OS and smartphone OS are going to be merged in the long run and it's possible (probable?) that eventually phones will even be able to run the full metro desktop when inserted into a dock, to act as a cheap computer replacement. Of course, Apple has had this for years, but I think that WP holds some pretty good cards for the long run ...
  - tsunamifury 14y ago
    Windows 8 Phone has nothing to do with Windows 8 Tablet. You have to build from scratch for each. How in the world is that an 'integrated ecosystem'. I've been to the developers conferences and tried to build products for their launch devices. There is no grand plan, word on important issues come down the pipeline in real time, are later taken back or only addressed when a developers brings up a serious issue. At close range, it often appears as if the Windows 8 team has no idea what they are doing, and actually two silo'd communities of Mobile and desktop.
    - excuse-me 14y ago
      >How in the world is that an 'integrated ecosystem'. It is to the marketing dept. Suppose you are a huge and stupid corporate or government customer. Your users want to have smartphones. A MSFT rep convinces you that using Windows is the safe and reliable choice and with Windows 8 you have the same OS 'brand' on your desktop. The same argument has kept IBM's mainframe salesmen in new cadilacs for decades.
liotier 14y ago
Why buy them when you have already infiltrated and neutralized them ?
- davidw 14y ago
  As a channel to push your phone OS, of course.
  - betterth 14y ago
    Looks like they didn't have to buy them to get those perks.
- SlipperySlope 14y ago
  Because Nokia will burn through its remaining cash within two years at the current loss rate and otherwise go bankrupt - perhaps fatally tarnishing Windows as a phone operating system.
- Nelson69 14y ago
  The belief is that with China and Nokia building middle classes, there will be a gigantic market for $25 phones. Not smartphones, but just phones, like Nokia is really good at making. Thing is, it's a telco company, they are all horrible.
  - powertower 14y ago
    The only way they are going to make money in China on a $25 phone is if they tie it into a monthly or pre-paid plan. Otherwise, the margins are going to be slim, non-existent, or in the red on those phones.
  - fpgeek 14y ago
    I wonder how $25 Nokia dumbphones will do against the $25 Android phones that are coming (a bit more than a factor of 2 to go - we've already $50 off-contract during the right sale).
mtgx 14y ago
"Elop has already halved the time it takes for Nokia to make a smartphone, simply by shifting to Windows." Yeah, that was because before that Nokia had double the time it takes to get a phone on the market compared to everyone else who has already joined Android. HTC, Samsung and Motorola can put a "next-gen" phone on the market within 10 months, maybe even 9. So can Apple, but they prefer to keep it on a 12 month cycle. Same goes for Sony Ericsson until more recently, but they've almost caught up with the others now. It's not a coincidence that the former 2 phone manufacturing leaders were the slowest. Nokia's "last good Symbian phone", the N8, took like a year and a half to get launched, maybe more. The "Meego based" phone, the N9, was also delayed a lot (had different name for a while). Does this mean they have caught up with everyone else now? I don't see it. Maybe it's because WP7's slow adoption rate for latest hardware, or it's Nokia's fault again, or maybe both. But I still see them using very old hardware in their phones, which means their development cycle for "current" phones started quite a while back. Otherwise they should be able to make phones with cutting edge technology, like most Android manufacturers and Apple can.
- solnyshok 14y ago
  I find it strange that you tie adoption of latest hardware as a sign of ... whatever. Good user experience has only very little to do with adopting latest (multicore) chipsets. Polished software is far more important. On the other hand, I see SGS2 and SGS3 dying in 3-4 hours under load. Just my 5c.
  - mtgx 14y ago
    Polished software is important. But Nokia has outsourced most of that to Microsoft now. The SGS2 and SGS3 dying in 3-4 hours? What do you mean? Like playing a 3D game? The SGS3 is one of the most battery efficient phones on the market now. Are you saying a WP7 phone can outlast it? In Anandtech's benchmarks I've only seen WP7 phones with mediocre battery life and very poor Sunspider performance. I've seen nothing that shows that overall WP7 phones are more battery efficient than Android so far.
  - huggyface 14y ago
    On the other hand, I see SGS2 and SGS3 dying in 3-4 hours under load. Just my 5c. The current crop of Windows Phone devices have miserable battery life, where the SGS2 and moreso the SGS3 have excellent battery life. I am profoundly confused by what you are claiming.
junto 14y ago
I love elreg. They have the best articles title ever!
superxor 14y ago
> Microsoft has time to generate an "ecosystem", the clunky technology buzzword for what the rest of the world calls "markets". That was arrogant! Ecosystems are more than just markets.
- pwang 14y ago
  Of course they are - but Microsoft only knows how to make platform plays. It seems to have forgotten that platforms are bootstrapped on the basis of killer products, and sustained by interop between a continuous stream of great products. For so long, its platform play was based on extending the Windows platform ("windows everywhere"), and it seems to have institutionally forgotten that the only reason this worked is because WORD AND EXCEL ARE KILLER PRODUCTS. If Word ceased to be the way that 99% of business users interfaced with text of any significance, and if Excel ceased to be the way that 99% of business users capture and analyze data, then the Windows platform "advantage" would evaporate overnight. So, Microsoft's DNA is to attempt to create "ecosystems" because it considers itself a platform company, whereas most smaller or saner companies look to build great products. Heck, even Apple has to do this. Could it have created an iOS ecosystem if the iPhone was a dud? (An aside: Android might seem to be an exception to this, because it's not a killer product in the way that iPhone and iPad were. But that's only if you think that phone subscribers are the customers of Android. They're not - the carriers are. Which is why Google's acquisition of Motorola is so interesting and yet so expected at the same time. They've gotten as about as far as they can get on the back of an "OK" product, and need to make a stellar product in order to build an ecosystem of users instead of partners. The carriers don't have it in their DNA to deliver stellar software, and the hardware guys don't either, so Google has to buy a hardware company so it can build a great integrated device.)
saturdaysaint 14y ago
Buying a major phone company would have been a pretty risky strategy shift. Google's Motorola acquisition is one of Microsoft's best selling points for getting HTC/Samsung/etc. to take Windows Phone seriously, perhaps more seriously than Android. With Windows 8, Samsung and others will have unique incentive to push Windows Phones over Android - they'll have a full lineup of modern phones, tablets and enterprise-ready PCs. Acquiring Nokia would soured a lot of partners who are just as capable of delivering great hardware without taking on the risks of a hardware company.
- gnaffle 14y ago
  If Nokia has blockbuster sales with WP7, or other companies with Win8 tablets, expect those companies to be on board pretty quickly. So far, though, it's not happening. Also, those companies know that Microsofts strategy can (and will if needed) change overnight just like it did with PlaysForSure (replaced by the Microsoft-made Zune).
chris_wot 14y ago
Uh... perhaps I misread this story, but nowhere do I see Microsoft "mulling" a Nokia buyout. Nice headline, but seems very misleading.
Jabbles 14y ago
There is no evidence to distinguish between "running away screaming" and "eventually deciding not to buy".

71 points by antr 14y ago

"The nightmare scenario for Nokia is that the one I [the author] described here back in January: that there really isn't room, in reality, for a "third ecosystem". In this scenario there's Apple and Android, leaving RIM and Nokia fighting for crumbs. Today, the health of WP as an "ecosystem" isn't obvious: Samsung, Dell, LG and HTC all seem to have given up. Only Nokia makes a noise."

hef19898 14y ago
depends what kind of impact win8 has on the tablet market. seems like android is kind of weak here compared to iOS. If Win8 gets a big enough chunk of that and if WP8 is more or less compatible with win8 on an app level win8 powered tablets could pull windows phones along enough to get reasonable market share. Microsoft certainly has the reasources and cash to at least try that. As far as RIM is concerned, I see their future as kind of bleak...
- technoslut 14y ago
  Leveraging tablets to increase WP sales is the best path for MS to take but they are playing a dangerous game. Windows 8 on the desktop will be a serious adjustment for consumers and very early reviews seem to indicate that. The perception of Windows 8 on the desktop could adversely affect WOA.
  - hef19898 14y ago
    Sure it's a gamble, and a risky one for that. But continuing business as usual is IMO even riskier. Possible that Win8 could face the same fate on desktops like Vista did. How that wuld effect customer perception of Win8 on tablets, well good question. the main benefit I see in Win8-tablets is that you finally get a real computer for the price of a real computer and not an oversized smartphone you can't use to make phone calls for the price oy a computer. But that's just my opinion.
inoop 14y ago
Windows Phone is not something that stands on its own, Microsoft is building a powerful ecosystem comprising a desktop OS (win8), tablet os (win8), smartphone os (wp8/apollo), gaming platform (xbox), and tying it all together with a cloud infrastructure (skydrive, hotmail, bing, bing maps, etc.). Of course, the desktop/tablet OS and smartphone OS are going to be merged in the long run and it's possible (probable?) that eventually phones will even be able to run the full metro desktop when inserted into a dock, to act as a cheap computer replacement. Of course, Apple has had this for years, but I think that WP holds some pretty good cards for the long run ...
- tsunamifury 14y ago
  Windows 8 Phone has nothing to do with Windows 8 Tablet. You have to build from scratch for each. How in the world is that an 'integrated ecosystem'. I've been to the developers conferences and tried to build products for their launch devices. There is no grand plan, word on important issues come down the pipeline in real time, are later taken back or only addressed when a developers brings up a serious issue. At close range, it often appears as if the Windows 8 team has no idea what they are doing, and actually two silo'd communities of Mobile and desktop.
  - excuse-me 14y ago
    >How in the world is that an 'integrated ecosystem'. It is to the marketing dept. Suppose you are a huge and stupid corporate or government customer. Your users want to have smartphones. A MSFT rep convinces you that using Windows is the safe and reliable choice and with Windows 8 you have the same OS 'brand' on your desktop. The same argument has kept IBM's mainframe salesmen in new cadilacs for decades.

liotier 14y ago

Why buy them when you have already infiltrated and neutralized them ?

davidw 14y ago
As a channel to push your phone OS, of course.
- betterth 14y ago
  Looks like they didn't have to buy them to get those perks.
SlipperySlope 14y ago
Because Nokia will burn through its remaining cash within two years at the current loss rate and otherwise go bankrupt - perhaps fatally tarnishing Windows as a phone operating system.
Nelson69 14y ago
The belief is that with China and Nokia building middle classes, there will be a gigantic market for $25 phones. Not smartphones, but just phones, like Nokia is really good at making. Thing is, it's a telco company, they are all horrible.
- powertower 14y ago
  The only way they are going to make money in China on a $25 phone is if they tie it into a monthly or pre-paid plan. Otherwise, the margins are going to be slim, non-existent, or in the red on those phones.
- fpgeek 14y ago
  I wonder how $25 Nokia dumbphones will do against the $25 Android phones that are coming (a bit more than a factor of 2 to go - we've already $50 off-contract during the right sale).

mtgx 14y ago

"Elop has already halved the time it takes for Nokia to make a smartphone, simply by shifting to Windows." Yeah, that was because before that Nokia had double the time it takes to get a phone on the market compared to everyone else who has already joined Android. HTC, Samsung and Motorola can put a "next-gen" phone on the market within 10 months, maybe even 9. So can Apple, but they prefer to keep it on a 12 month cycle. Same goes for Sony Ericsson until more recently, but they've almost caught up with the others now. It's not a coincidence that the former 2 phone manufacturing leaders were the slowest. Nokia's "last good Symbian phone", the N8, took like a year and a half to get launched, maybe more. The "Meego based" phone, the N9, was also delayed a lot (had different name for a while). Does this mean they have caught up with everyone else now? I don't see it. Maybe it's because WP7's slow adoption rate for latest hardware, or it's Nokia's fault again, or maybe both. But I still see them using very old hardware in their phones, which means their development cycle for "current" phones started quite a while back. Otherwise they should be able to make phones with cutting edge technology, like most Android manufacturers and Apple can.

solnyshok 14y ago
I find it strange that you tie adoption of latest hardware as a sign of ... whatever. Good user experience has only very little to do with adopting latest (multicore) chipsets. Polished software is far more important. On the other hand, I see SGS2 and SGS3 dying in 3-4 hours under load. Just my 5c.
- mtgx 14y ago
  Polished software is important. But Nokia has outsourced most of that to Microsoft now. The SGS2 and SGS3 dying in 3-4 hours? What do you mean? Like playing a 3D game? The SGS3 is one of the most battery efficient phones on the market now. Are you saying a WP7 phone can outlast it? In Anandtech's benchmarks I've only seen WP7 phones with mediocre battery life and very poor Sunspider performance. I've seen nothing that shows that overall WP7 phones are more battery efficient than Android so far.
- huggyface 14y ago
  On the other hand, I see SGS2 and SGS3 dying in 3-4 hours under load. Just my 5c. The current crop of Windows Phone devices have miserable battery life, where the SGS2 and moreso the SGS3 have excellent battery life. I am profoundly confused by what you are claiming.

junto 14y ago

I love elreg. They have the best articles title ever!

superxor 14y ago

> Microsoft has time to generate an "ecosystem", the clunky technology buzzword for what the rest of the world calls "markets". That was arrogant! Ecosystems are more than just markets.

pwang 14y ago
Of course they are - but Microsoft only knows how to make platform plays. It seems to have forgotten that platforms are bootstrapped on the basis of killer products, and sustained by interop between a continuous stream of great products. For so long, its platform play was based on extending the Windows platform ("windows everywhere"), and it seems to have institutionally forgotten that the only reason this worked is because WORD AND EXCEL ARE KILLER PRODUCTS. If Word ceased to be the way that 99% of business users interfaced with text of any significance, and if Excel ceased to be the way that 99% of business users capture and analyze data, then the Windows platform "advantage" would evaporate overnight. So, Microsoft's DNA is to attempt to create "ecosystems" because it considers itself a platform company, whereas most smaller or saner companies look to build great products. Heck, even Apple has to do this. Could it have created an iOS ecosystem if the iPhone was a dud? (An aside: Android might seem to be an exception to this, because it's not a killer product in the way that iPhone and iPad were. But that's only if you think that phone subscribers are the customers of Android. They're not - the carriers are. Which is why Google's acquisition of Motorola is so interesting and yet so expected at the same time. They've gotten as about as far as they can get on the back of an "OK" product, and need to make a stellar product in order to build an ecosystem of users instead of partners. The carriers don't have it in their DNA to deliver stellar software, and the hardware guys don't either, so Google has to buy a hardware company so it can build a great integrated device.)

saturdaysaint 14y ago

Buying a major phone company would have been a pretty risky strategy shift. Google's Motorola acquisition is one of Microsoft's best selling points for getting HTC/Samsung/etc. to take Windows Phone seriously, perhaps more seriously than Android. With Windows 8, Samsung and others will have unique incentive to push Windows Phones over Android - they'll have a full lineup of modern phones, tablets and enterprise-ready PCs. Acquiring Nokia would soured a lot of partners who are just as capable of delivering great hardware without taking on the risks of a hardware company.

gnaffle 14y ago
If Nokia has blockbuster sales with WP7, or other companies with Win8 tablets, expect those companies to be on board pretty quickly. So far, though, it's not happening. Also, those companies know that Microsofts strategy can (and will if needed) change overnight just like it did with PlaysForSure (replaced by the Microsoft-made Zune).

chris_wot 14y ago

Uh... perhaps I misread this story, but nowhere do I see Microsoft "mulling" a Nokia buyout. Nice headline, but seems very misleading.

Jabbles 14y ago

There is no evidence to distinguish between "running away screaming" and "eventually deciding not to buy".