8 ms·

>Lowering Nokia's risk by doing an Android phone or two was a no-brainer Have you looked at Android OEM's financials lately? Samsung is the only one making any

>Lowering Nokia's risk by doing an Android phone or two was a no-brainer Have you looked at Android OEM's financials lately? Samsung is the only one making any profit, HTC is barely ekeing out one, LG, Sony, Motorola etc. are running in losses. And bringing out an Android phone would cut off the $1B/yr lifeline platform support from Microsoft, which Nokia knew it would need in the painful transition. Nokia did approach Google for a similar deal, but Google told them to take a hike. Also, they're licensing maps etc. to Microsoft for a huge amount too. Also, people seem to be ignoring that Nokia's signature cash cow feature phone business is collapsing because of ultracheap Chinese clones and white label phones being dumped into the market. Nokia trying to start their own ecosystem with QT would've been foolish in the face of entrenched competition. I don't understand the notion that QT is some magical technology that's so much leaps and bounds ahead of other GUI APIs like iOS, Android, WinRT etc that developer would automatically flock to it. QT is definitely nice though. In short, Nokia knew that they were going to go through extremely tough times for a couple of years regardless of what they pick, and they chose a partner with deep pockets($60B cash in the bank) rather than going solo.

biafra 14y ago
Since when is Nokia licensing Bing maps for their phones for a huge amount of money? Do you have a source for that? Nokia uses gate5 Maps and acquired gate5 AG in late 2006. According to this http://www.bing.com/community/site_blogs/b/maps/archive/2012/05/24/bing-maps-now-using-nokia-backend-services-for-traffic-and-geocoding.aspx http://www.bing.com/community/site_blogs/b/maps/archive/2012... there is a joint venture between Nokia and Microsoft/Bing with regards to maps.
- sorenbs 14y ago
  It's the other way around.
beagle3 14y ago
While I agree with your general sentiment, > they chose a partner with deep pockets($60B cash in the bank) Is only half the story. They chose a partner who has a record of being a horrible partner for companies in their condition -- which is in a lot of ways similar to both HP and SGI pre-Windows (good hardware, trying to get out of the OS business, rely on Microsoft). See http://en.wikipedia.org/wiki/Richard_Belluzzo http://en.wikipedia.org/wiki/Richard_Belluzzo So, this partner has a horrible relevant track record, twice. I don't see how Nokia can expect (or could have expected a couple of years ago) to fare better than SGI or HP's high end computing unit did.
- ConstantineXVI 14y ago
  The circumstances are a bit different from SGI and HP; Microsoft couldn't care less if SGI or HP sank, Windows already had a near-stranglehold on the market and there was no shortage of companies willing to produce Windows boxes. Now, WP is seriously behind in the market and they desperately need a first-tier vendor dedicated to them (Huawei is relatively unknown, HTC is struggling, and Samsung's are an afterthought to the money-printing Android based SGS line), so Microsoft needs Nokia's clout as much as Nokia needs MS's cash. Even assuming treachery, Nokia's worst case here is more then likely getting bought vs. being left for dead like SGI.
  - beagle3 14y ago
    ... Microsoft has recently disclosed that they are producing tablets. Phones are a short stride away. I don't think Microsoft is going to treat Nokia any better than SGI in the long run. > Nokia's worst case here is more then likely getting bought vs. being left for dead like SGI. ... for 10% what they were worth at the time Elop gave the "burning platform" speech. SGI was technically bought as well. That's really a bad resolution for Nokia, and is far from being a "worst case". If MS decides to produce phones themselves, it is likely Nokia will be left to whither and die. It might look unlikely now, but unless you were in the know, just a month ago it seemed very unlikely that MS will make their own tablets.
    - ConstantineXVI 14y ago
      Despite the internal similarities, it's much more difficult to get a cell phone on the market vs. a tablet. Unless you want to be resigned to the sidelines, you have to be able to convince the carriers to sell your phone. This is very difficult unless you: a) already have a good relationship with the carriers b) have someone like Steve Jobs Nokia at least has (a), Microsoft has neither (Verizon likely still has enough Kin that they won't be hurting for paperweights for quite a while). Microsoft can't afford to kill their only guaranteed in with the carriers.
      - toyg 14y ago
hammersend 14y ago
It's still Elop's fault that he Osborned their Symbian business. And now Nokia's been Osborned by Microsoft with the Windows Phone 8 announcement. And Samsung makes the Android money because they make the best Android phones. That could be Nokia.
- Metrop0218 14y ago
  They knew about the plans when they even signed the deal. They sold a decent bit of phones and made a good name for themselves with WP7, with WP8 it looks like they're gonna release a bunch of new phones and go all in.
fpgeek 14y ago
First, it doesn't matter if Microsoft's "platform support" was contingent on giving up other options. There is one and only one circumstance under which a company like Nokia should be willing to give up their strategic flexibility like that. And that's if Microsoft were willing to acquire them (then-and-there not a few years later when they're cheaper). Nokia's market cap was over $38B at the end of 2010. It was just under $32B at the end of Q1 2011 (after the "burning platforms" memo). It is under $9B today. As you note, not all of that is Windows Phone, but plenty of it is. Microsoft's $1B/year is peanuts. To put it another way, how much was avoiding the "Nokia rejects Windows Phone" headline worth to Microsoft? Plenty more than $1B/year, I bet. Second, Nokia's feature phone business is one big reason to have an Android project going. Low-end Android phones are one of the big things eating feature phones. Until recently, Nokia had been spending plenty of effort (e.g. Meltemi) trying to create something to compete with Android at the low end. They shouldn't have been re-inventing the wheel. They should have picked up Android and leaned on some of their other strengths (e.g. manufacturing, distribution, etc.) to win low-end devices. Third, I don't think Qt is a magic elixir. Establishing a Qt ecosystem easily might not have worked. But it was a way to transition off Symbian without immediately deprecating those devices (and we saw how immediate deprecation turned out). And it was a decent story to tell developers: "Build with Qt and you can make your app available on every mobile platform you care about (except maybe Blackberry)". Of course the devil is in the details and it wouldn't be that easy, but plenty of developers want a cross-platform mobile story. It could have been the hook that got an ecosystem off the ground, so it was at least worth trying. And if it didn't work, you'd have been offering devices from each of the alternative platforms you could consider. It would be a lot easier to pick if you could see how those devices were doing in the marketplace. Fourth, the measure of success of including Android (and I'll emphasize again that I didn't say don't do Windows Phone, too) isn't whether they would have remained profitable while doing so. It is whether they would have had better options today and would they have lost less money along the way. I think the answer is obviously yes on both counts. If nothing else, being able to point to a more successful Android line and a less successful Windows Phone line would have driven up their eventual acquisition price.
- jbooth 14y ago
  The market cap measures sentiment, not reality. It's not that Nokia's underlying value went from 38 billion to 9 billion in that time, it's that people figured out they're only worth 9 billion and sold down the stock. The fundamentals affecting Nokia were already in play long before that 'burning platform' speech.
ashayh 14y ago
The problems of LG, Sony and Motorola are of their own making. One of the problems is clear marketing. Samsung has done a very good job with marketing the Galaxy brand so far. In 2012, you know the S III is the best Samsung phone. And SII is the second best. This is simple to understand, even though Samsung makes dozens of Android models. But if someone asks you which Sony phone should I buy: http://www.gsmarena.com/sony-phones-7.php http://www.gsmarena.com/sony-phones-7.php . Good luck with that. The consumer chooses to go with the simpler options of Samsung, Apple or even HTC. Sony in particular had(and has) some massive opportunities with deep Android+Google integration with their Playstation Network platform. But they continue to shoot themselves in the foot by throwing money at half baked phones. And dedicated gaming devices, which have taken a massive beating from smart phones.

biafra 14y ago

Since when is Nokia licensing Bing maps for their phones for a huge amount of money? Do you have a source for that? Nokia uses gate5 Maps and acquired gate5 AG in late 2006. According to this http://www.bing.com/community/site_blogs/b/maps/archive/2012/05/24/bing-maps-now-using-nokia-backend-services-for-traffic-and-geocoding.aspx http://www.bing.com/community/site_blogs/b/maps/archive/2012... there is a joint venture between Nokia and Microsoft/Bing with regards to maps.

sorenbs 14y ago
It's the other way around.

beagle3 14y ago

While I agree with your general sentiment, > they chose a partner with deep pockets($60B cash in the bank) Is only half the story. They chose a partner who has a record of being a horrible partner for companies in their condition -- which is in a lot of ways similar to both HP and SGI pre-Windows (good hardware, trying to get out of the OS business, rely on Microsoft). See http://en.wikipedia.org/wiki/Richard_Belluzzo http://en.wikipedia.org/wiki/Richard_Belluzzo So, this partner has a horrible relevant track record, twice. I don't see how Nokia can expect (or could have expected a couple of years ago) to fare better than SGI or HP's high end computing unit did.

ConstantineXVI 14y ago
The circumstances are a bit different from SGI and HP; Microsoft couldn't care less if SGI or HP sank, Windows already had a near-stranglehold on the market and there was no shortage of companies willing to produce Windows boxes. Now, WP is seriously behind in the market and they desperately need a first-tier vendor dedicated to them (Huawei is relatively unknown, HTC is struggling, and Samsung's are an afterthought to the money-printing Android based SGS line), so Microsoft needs Nokia's clout as much as Nokia needs MS's cash. Even assuming treachery, Nokia's worst case here is more then likely getting bought vs. being left for dead like SGI.
- beagle3 14y ago
  ... Microsoft has recently disclosed that they are producing tablets. Phones are a short stride away. I don't think Microsoft is going to treat Nokia any better than SGI in the long run. > Nokia's worst case here is more then likely getting bought vs. being left for dead like SGI. ... for 10% what they were worth at the time Elop gave the "burning platform" speech. SGI was technically bought as well. That's really a bad resolution for Nokia, and is far from being a "worst case". If MS decides to produce phones themselves, it is likely Nokia will be left to whither and die. It might look unlikely now, but unless you were in the know, just a month ago it seemed very unlikely that MS will make their own tablets.
  - ConstantineXVI 14y ago
    Despite the internal similarities, it's much more difficult to get a cell phone on the market vs. a tablet. Unless you want to be resigned to the sidelines, you have to be able to convince the carriers to sell your phone. This is very difficult unless you: a) already have a good relationship with the carriers b) have someone like Steve Jobs Nokia at least has (a), Microsoft has neither (Verizon likely still has enough Kin that they won't be hurting for paperweights for quite a while). Microsoft can't afford to kill their only guaranteed in with the carriers.
    - toyg 14y ago

hammersend 14y ago

It's still Elop's fault that he Osborned their Symbian business. And now Nokia's been Osborned by Microsoft with the Windows Phone 8 announcement. And Samsung makes the Android money because they make the best Android phones. That could be Nokia.

Metrop0218 14y ago
They knew about the plans when they even signed the deal. They sold a decent bit of phones and made a good name for themselves with WP7, with WP8 it looks like they're gonna release a bunch of new phones and go all in.

fpgeek 14y ago

First, it doesn't matter if Microsoft's "platform support" was contingent on giving up other options. There is one and only one circumstance under which a company like Nokia should be willing to give up their strategic flexibility like that. And that's if Microsoft were willing to acquire them (then-and-there not a few years later when they're cheaper). Nokia's market cap was over $38B at the end of 2010. It was just under $32B at the end of Q1 2011 (after the "burning platforms" memo). It is under $9B today. As you note, not all of that is Windows Phone, but plenty of it is. Microsoft's $1B/year is peanuts. To put it another way, how much was avoiding the "Nokia rejects Windows Phone" headline worth to Microsoft? Plenty more than $1B/year, I bet. Second, Nokia's feature phone business is one big reason to have an Android project going. Low-end Android phones are one of the big things eating feature phones. Until recently, Nokia had been spending plenty of effort (e.g. Meltemi) trying to create something to compete with Android at the low end. They shouldn't have been re-inventing the wheel. They should have picked up Android and leaned on some of their other strengths (e.g. manufacturing, distribution, etc.) to win low-end devices. Third, I don't think Qt is a magic elixir. Establishing a Qt ecosystem easily might not have worked. But it was a way to transition off Symbian without immediately deprecating those devices (and we saw how immediate deprecation turned out). And it was a decent story to tell developers: "Build with Qt and you can make your app available on every mobile platform you care about (except maybe Blackberry)". Of course the devil is in the details and it wouldn't be that easy, but plenty of developers want a cross-platform mobile story. It could have been the hook that got an ecosystem off the ground, so it was at least worth trying. And if it didn't work, you'd have been offering devices from each of the alternative platforms you could consider. It would be a lot easier to pick if you could see how those devices were doing in the marketplace. Fourth, the measure of success of including Android (and I'll emphasize again that I didn't say don't do Windows Phone, too) isn't whether they would have remained profitable while doing so. It is whether they would have had better options today and would they have lost less money along the way. I think the answer is obviously yes on both counts. If nothing else, being able to point to a more successful Android line and a less successful Windows Phone line would have driven up their eventual acquisition price.

jbooth 14y ago
The market cap measures sentiment, not reality. It's not that Nokia's underlying value went from 38 billion to 9 billion in that time, it's that people figured out they're only worth 9 billion and sold down the stock. The fundamentals affecting Nokia were already in play long before that 'burning platform' speech.

ashayh 14y ago

The problems of LG, Sony and Motorola are of their own making. One of the problems is clear marketing. Samsung has done a very good job with marketing the Galaxy brand so far. In 2012, you know the S III is the best Samsung phone. And SII is the second best. This is simple to understand, even though Samsung makes dozens of Android models. But if someone asks you which Sony phone should I buy: http://www.gsmarena.com/sony-phones-7.php http://www.gsmarena.com/sony-phones-7.php . Good luck with that. The consumer chooses to go with the simpler options of Samsung, Apple or even HTC. Sony in particular had(and has) some massive opportunities with deep Android+Google integration with their Playstation Network platform. But they continue to shoot themselves in the foot by throwing money at half baked phones. And dedicated gaming devices, which have taken a massive beating from smart phones.