7 ms·
I don't really understand how this works. Microsoft bought Nokia for about $7B[1] and now Nokia pays more than twice that amount for Alcatel? Where is this mone
by vnglst 12y ago
I don't really understand how this works. Microsoft bought Nokia for about $7B[1] and now Nokia pays more than twice that amount for Alcatel? Where is this money coming from and why is Alcatel worth so much more?
[1] http://www.businessinsider.com/microsoft-closes-nokia-acquisition-2014-4?IR=T http://www.businessinsider.com/microsoft-closes-nokia-acquis...
- ghshephard 12y agoMicrosoft only bought the handset business from Nokia, they didn't purchase all of Nokia. In fact, as I recall, they only got the right to use some of the brand names for a limited period of time.
- vnglst 12y agoRight, that makes sense! And the Alcatel that Nokia is buying here, is much more than a producer of phones.
- yaantc 12y agoActually the Alcatel-Lucent they bought do not produce phones at all ;) A while ago Alcatel got with TCL, a Chinese company, to take care of the handset business through a joint-venture initially. Then TCL bought and integrated the JV, and kept the rights to the Alcatel brand for handsets. The brand is likely to stay but it's now fully TCL (with still some ex-Alcatel employees).
- Aoyagi 12y agoDon't forget that Microsoft('s lackey) took care of lowering their value as much as possible before buying the Devices and Services unit for some spare change.
- dagw 12y agoCome on. Nokia was doing a fine job of lowering the value of their handset business on their own.
- bitL 12y agoHe is absolutely right.
- bitL 12y agoFor those of you in the downvote mood please search about the hidden bonus given by NOKIA's board to Elop in his original contract for selling off phone division and then carefully evaluate the steps he did. His execution was almost perfect in the light of this "small part" of his contract.
- pavlov 12y agoYeah. It wasn't Elop who created one of the most dysfunctional software development units ever. He was brought in when the damage of previous bad management was just becoming fully apparent. Nokia in 2007-2010 was spending many times more than Apple on R&D. For that money, they got multiple infighting operating system teams each developing their own half-baked thing (Symbian, MeeGo, Qt, S40) and device teams that were building uncompetitive devices on top of 3-year-old software.
- mikegioia 12y agoFor anyone interested in this (very good) story, you can read about it here: http://taskumuro.com/artikkelit/the-story-of-nokia-meego http://taskumuro.com/artikkelit/the-story-of-nokia-meego
- josh2600 12y agoTwo words: burning platform. http://communities-dominate.blogs.com/brands/2012/06/the-final-reckoning-of-burning-platforms-memo-damaged-nokia-by-wiping-out-13b-in-revenues-and-destro.html http://communities-dominate.blogs.com/brands/2012/06/the-fin... There was just no reason to write a memo like that. It destroyed their business, almost singlehandedly, and no, I'm not exaggerating. The consequences of that memo were insane: Nokia's handset sales died all over the world all at once.
- 12y ago
- PopsiclePete 12y agoNokia were doing awesome right until then! I fricking loved Symbian, so much better than Android/iOS. Oh. wait, no, it actually was complete garbage. But yes, Elop ruined their kick-ass smartphones. Gimme a break.
- kpil 12y ago:-) I think that the truth is that: 1. The Finns got too cocky for their own good. 2. The forget to monitor the other guys. 3. Apple predictably made a smartphone (years after the ipod) and made a silly amount of money, and was dominating the high-end segment after a really short while. 4. Google decided to own the mobile ads market, and basically just not care about the hardware, and was starting to dominate virtually every other segment. 5. Nokia had a few platforms, some apps, and only the dying feature phone market, and they realized this. They would have had a chance (maybe) to go for Android, but judging by for instance Sony (that I think build the best phones. period. ) it is really hard to compete with high-end stuff against Apple.
- dagw 12y agoMicrosoft bought Nokia's handset division (roughly half the company) and the right to use the Nokia name for a limited time. They didn't buy the whole company.
- mrweasel 12y agoNokias handsets was a failing business, or at least seen as such, building networks is a growing business. There are still large parts of the world that does not yet have a mobile phone network, or where networks are still being upgrade. The "new" Nokia is Nokia Networks (http://networks.nokia.com/ http://networks.nokia.com/), so it's the company that supplies the ISPs with their infrastructure.
- digi_owl 12y agoAnd as more people go mobile, more towers and backbone is needed to further subdivide the cells to maintain bandwidth.
- Juha 12y agoNokia Networks has been very separate venture from the better known Nokia-mobile. It was previously a joint venture between Nokia and Siemens known as NSN (Nokia Siemens Networks). In 2013 Nokia bought rest of the stock from Siemens and renamed it Nokia Networks.
- pjmlp 12y agoYeah former Nokia Networks employee here, that whole NSN thing was a big mistake.
- ptaipale 12y agoI'm also former Nokia Networks: I would not say the "whole" thing was a big mistake. I could understand the business sense. Some parts of merger worked better and some were worse. Myself, I got a new boss from Siemens who was a good guy. Got laid off later on, though. Overall, the execution of that merger seems to have been better than the Alcatel-Lucent merger a year earlier. Nokia Networks is actually alive, which is much better than what I thought back in 2006. And not only alive, but actually doing rather well (at least until this). The bad feeling I have about this is that in the picture, Suri shakes hands with Hollande. That tells how political the deal is, and how wrong it can go (with all that protectionism etc). On the other hand JTB says this is not good, so I have the instinct reaction that it must be good.
- monkeyshelli 12y agoI remember that culturally Siemens saw itself as a oil-tanker plowing through, and Nokia saw itself as a nimble and agile fish school. No wonder it ended up where it did, if the cultural differences in the way of working was so different.
- masklinn 12y agoMicrosoft bought Nokia's consumer cell phones division. Nokia is also a telecommunication equipment designer and manufacturer (since long before cell phones even existed) similar to Ericsson, Huawei or Alcatel-Lucent. They also got into nav/geomapping after buying Navteq (then Ovi, currently HERE) but that's probably getting spun off.
- steamy 12y agoIt's shares only (all-stock) deal. No cash changing hands. Did you read the Recode article?