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Microsoft Buys Nokia Mobile

Posted: September 3rd, 2013 | Author: | Filed under: Microsoft, News From the web | Tags: , , , , , , | Comments Off on Microsoft Buys Nokia Mobile


Just a week after CEO Steve Ballmer spruked his retirement, Microsoft has announced it will buy Nokia’s mobile phone unit for almost $8 billion. The Finnish phone maker will grant Microsoft a 10-year non-exclusive licence to its patents, and will itself focus on network infrastructure and services ::::

Nokia makes Lumia brand phones exclusively for Microsoft’s Windows Phone 8 operating system. The phone maker described the deal, worth 5.44 billion euros/$AU7.98 billion, as “the best path forward” for Nokia and its shareholders. The company also announced the immediate departure of chief executive Stephen Elop. He will be replaced in the interim by Risto Siilasmaa, Nokia’s chairman of the board.

Nokia was long the global leader in making mobile phones but has been overtaken by rivals Samsung and Apple as it struggled to establish winning business models and mobile devices.

The transaction announced on Tuesday is expected to be completed in the first quarter of 2014, pending approval by Nokia shareholders and regulatory authorities. Some 32,000 Nokia employees are expected to transfer to Microsoft, including approximately 4,700 people in Finland, the company said.

The operations affected by the transfer generated approximately 14.9 billion euros in 2012, or almost 50 per cent of Nokia’s net sales, the company said.

Of the total purchase price of 5.44 billion euros, 3.79 billion relates to the purchase of Nokia’s Devices & Services business, and 1.65 billion relates to the mutual patent agreement and future option.

Last month, Nokia finalised the purchase of German engineering giant Siemens’ 50 per cent stake in Nokia Siemens Networks (NSN) for 1.7 billion euros. NSN, which is specialised in high-speed mobile broadband, was set up as a joint venture between the two companies in 2007, a partnership that expired in April.

The unit has posted stronger earnings than Nokia’s mobile phone business. NSN posted a net profit of 8 million euros in the second quarter of this year, compared to Nokia’s net loss of 227 million euros in the same period.

Last month Microsoft chief executive Steve Ballmer announced he would retire within the next 12 months.

Nokia Considered Android

It’s most likely unthinkable for the handful of die-hard Windows Phone users, but Nokia had once considered going the way of Android before it’s  Microsoft buyout.

The New York Times reported that Nokia had the schematics setup for an Android version of it’s Lumia phone before this month’s $7.2 billion buyout by Microsoft. The Android Lumia was apparently a fall-back for Nokia in case it decided to rescind its deal with Microsoft.

Simply porting from a Windows to Android based system probably wouldn’t have fixed many of Nokia’s problems, indeed it might just have created a few more.

The once mighty phone-maker would have come face to face with extreme competition, namely Samsung – current heavy weight in mobile sales – not to mention the plethora of Android phone manufacturers struggling to make any money, despite their solid hardware.

Ontop of  it’s hardware woes, Nokia is haemorrhaging dollars, posting a $AU200 million loss in the first quarter of 2013, and with a slurry if discontented shareholders – begging CEO Stephen Elop to take a different approach with its business – it’s little surprise that the company took up the Microsoft offer.

Tech-analyst Patrick Moorhead, of Moor Insights and Strategy, reckons “Nokia would be incredibly competitive if it moved to Android.” Mr Moorhead said. “With that great camera software, Nokia could definitely give Samsung a run for its money.”

Not to harp on but, we do hope the New Nokia MS phones target the RIGHT market: come on guys n gals, leave the coolkids behind, target the fast growing, macular degenareted over 55ers, they truly love your phones!


RELATED! Steve Ballmer’s Retirement

Microsoft CEOMicrosoft’s outlandish chief executive Steve Ballmer has announced he’s got his heart set on retirement. The gregarious CEO reckons he’s pensioning himself off within the coming 12 months.

It is the opinion of this blogger that Microsoft under Ballmer’s helmsman-ship has missed many obvious opportunities, leaving the once mighty company languishing in cyber-nomans land.

Ballmer’s retirement might just open a new chapter for Microsoft, while its Windows OS is used in the vast majority of personal computers. Microsoft during Ballmer’s 13 years of control has had little impact in the fast-growing mobile device segment.

The tech-behemoth has faced a slurry of criticism for not keeping pace with this fast-evolving tech-sector. A large part of Microsoft’s problem seems to be a huge lack of self-concept, 15 years ago the company quite willingly accepted that it wasn’t the cool-kid on the block, Mr Gates indeed embraced his uncoolness.

15 years ago the tech-galaxy seemed balanced. Apple had creatives covered, the NASDAQ had a bunch of competitors to fill each niche between Microsoft’s dullness and Apples glistening stardom. This was a plus-place for Microsoft to be, so long as it stayed away from Apples end of the market, so long as it stayed boring.

While Apple has gone from strength to strength, Microsoft’s continuous failure at recognizing what it does super-well, the dull stuff, OS and Office, and there isn’t a thing wrong with that. Unless of course you’ve become slightly insecure, forgotten who your buddies are and you’ve grown a need to play with the good-looking kids. Microsoft has sacrificed it’s solid image in a futile attempt at cornering the glamour-end of tech. I realise this sounds like a bit of hot air, but (I need to say this: old people love Microsoft)

Old people love Windows 8, the OS and amazingly the phone. The fastest – and most ignored – group of technology consumers LOVES WINDOWS 8! So who does Microsoft market Windows 8 to… clever little bumpkins, trendites and fashion conscious iPhone owners? :: Read the full article »»»»

source: afp

source: nyt

source: computerworld

image source: reuters

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