Microsoft In Talks To Buy Nokia's Smartphone Division? 192
lightbox32 writes "Analyst Eldar Murtazin announced today that Microsoft chief executive Steve Ballmer was soon to meet his Nokia counterpart Stephen Elop to finalize the purchase of Nokia's smartphone division, which would see patents, staff, and some plants transferred to Microsoft, for an undisclosed price. From the article: '“Steve Ballmer, Andy Lees and Stephen Elop and Kai Ostamo will meet in Las Vegas to finalize agreement about Nokia smartphone unit. Bye Nokia,” he tweeted on Thursday morning."
Re:Apple? (Score:5, Interesting)
Microsoft was in the phone business before Apple, albeit only from the software side. Microsoft missed some huge, huge opportunities in that arena. If only they could've ditched the stylus-centric GUI design (ie itty bitty tiny controls and no gestures) they could've held at least some ground with Windows Mobile.
Re:Apple? (Score:5, Interesting)
> If only they could've ditched the stylus-centric GUI design (ie itty bitty tiny controls and no gestures)
That's right on the money, (from an ergonomic standpoint, how did anyone ever think a "start" button an eighth of an inch wide was a good idea?? [1]) although I'm not sure it's a complete explanation. My Windows 6 phone would fail periodically with a popup something like "the audio driver has encountered an unexpected error and will now terminate". If you didn't catch it when it happened and reboot the phone, on the next call the phone wouldn't ring.
Let's savor that for a moment.
The phone wouldn't RING!!
The second or third time I failed to get a call while on-call, due to the audio driver malfunctioning, I had to dump the phone or risk losing my job.
As a result, I will never, ever, EVER have another Windows phone. In my line of work it's just too risky to have a phone that may at some random time decline to RING.
Ok, so I could be the only one to ever have that problem or problems like it, but if not, Windows 7 has a huge uphill battle to gain acceptance in the business market.
[1] From a code reuse standpoint, it makes perfect sense.
Re:Not plausible (Score:5, Interesting)
On the first part, I would have no trouble believing that Nokia would sell themselves completely to MS. I wouldn't think selling their phones separately would ever happen, but Nokia is pretty well going to do anything that MS asks of them at this point unless their leadership changes away from the MS cronies in place now.
Which makes this story even less plausible, why would MS buy the cow while they get the milk for free? In Nokia they have a partner that is pretty well willing to bet their whole business on MS and do exactly what MS would have them do if they owned them, without the complications of an acquisition, particularly in fairly MS-hostile territory of EU.
In terms of other manufacturers being 'happy' with MS, I think the handset makers are likely not particularly pleased with how the WP7 ecosystem is set up anyway. By design, the hardware manufacturers are relegated pretty much to producing the exact same equipment with the same exact software, chips and screens as their competitors. There is pretty much zero room in the WP7 ecosystem for any differentiation, making it pretty much a pure commodity business with race-to-the-bottom margins. I think MS has most of them scared enough to at least participate by making a few handsets to hedge their bets in case of an Android collapse, but there seems to be pretty much no enthusiasm among manufacturers or carriers with MS and Nokia the only ones actively really *pushing* the platform.
Re:Apple? (Score:5, Interesting)
You are definitely not the only person to have that happen to them; I had the exact same issue, and made the exact same decision, including the promise to never buy a Windows Mobile product again.
I also had the fun error that my Windows phone would randomly end calls. I would be happily chatting away and the phone would just hang up. I would joke "Windows has found your conversation tiresome and no longer wishes to continue," (said in a German accent).
Try explaining to your boss why you almost never pick up when he calls, and then when he does call you, you hang up on him.
Windows Mobile was far and away the worst phone experience I have ever had, and it soured me on Windows phone products forever.
I'm not laughing... (Score:4, Interesting)
I'm not laughing.. but Microsoft is still a joke. First they pre-announce a super smart phone a year before it's said to be out and now they are trying to buy their way into the smartphone market from another company that can't compete with Apple. How many phones have they already tried to launch that all failed miserably? Yea.. good luck with that. I'm sure the next phone venture will be worth every penny.
Nokia Who's your daddy? (Score:4, Interesting)
Re:Not plausible (Score:5, Interesting)
Microsoft needs Nokia more than Nokia needs Microsoft.
This is not true. Microsoft spins off many billions of profit each year, mainly from Windows and Office. They could dump 5 billion a year into mobile just to keep the dream alive. They pour something like 2 billion a year just into Bing and their other online efforts. They could keep this up forever. I don't think doing so is going to do them any good, but they can.
Sendo had the same problem. It didn't work out well for them. [theregister.co.uk]
While doing research for this comment (sad but true, I do research for /. comments as if I were an actual credible analyst) I went to look at Nokia's financial statements to see how long they could hold out with a failing smartphone business. What I found is a grand surprise: I find that Nokia [google.com] has been hugely bulking up the cash portion of their balance sheet [zacks.com]. They now have $16B cash and equivalents - a level they haven't seen since 2008 when their market cap was 3x what it is now (Currently $20B), and $4B more cash than they had a year ago. The annual run rate on last quarter's profits is $10B. That means less cash you could buy the Nokia business for $4B net of cash - patents, employees, hardware, manufacturing, real estate, the whole magilla. This brings the price of Nokia's earnings as a business (about $10B/year) less cash to about 40 cents. For 40 cents a buyer could buy $1/yr of profits. $1 buys what the company is accumulating in cash each year. That's a screaming deal - and with that much cash to leverage lots of the '80's LBO kings could get financing on that deal. It's a hell of a lot better deal than $8B for Skype, who never made any profits ever.
After reflecting on the above paragraph, TFA becomes plausible. Somebody's probably buying Nokia because at this price it's like buying a money tree at the price of five months' harvest. I see that you can buy a call option with a 7/21/2012 strike price of $6 for $.71, or the in-the-money $5 call for $1.14. Both of these look like a good deal to me, and I'd probably take the in-the-money one in case there was no bidding war. Naturally takeovers usually buy a company at a premium over the day's stock price.
I am not an investment advisor - especially not yours. I don't hold a position in any of these companies. This is just for fun.
If Google can buy Moto Mobi and get away with it, why can't Microsoft buy Nokia - especially when it's such a screaming deal?
Despite what the market thinks of Elop's plans (and my own prognostications) his austerity program does seem to be bearing fruit even if his strategic choices seem to be lacking.
logical (Score:5, Interesting)
That really was the next logical step. They've already ruined any hopes of Nokia ever getting back into the game with their mole who turned them on windows mobile as the OS of choice, now taking official control of the mobile arm of Nokia really is nothing new, it's just going the whole nine yards.
Most likely future: MS will pour a couple billions into it, like they did with the xbox, bleeding money quarter after quarter. They will be waiting (and bleeding money) until their competitors make a blunder (like Sony did with the PS3) and then stand ready to take over market share with their 2nd rate product simply because it's there and it has marketing muscle. They will probably buy up a couple App providers along the way and make them windows-mobile-exclusive (hello, Bungie).
Why? Because Balmer has no vision and isn't the guy to come up with anything resembling a new strategy. We will see what we've seen them do virtually everywhere else.
Re:This story is a lie (Score:4, Interesting)