Rumor: Microsoft To Buy Nokia For $30 Billion

http://www.softsailor.com/news/78888-rumor-microsoft-to-buy-nokia-for-30-billion.html

by Garbage • 15 years ago

140 84 15 years ago

softsailor.com

levesque• 15 years ago

Was half expecting the website to be The Onion...

contextfree• 15 years ago

Man, this would make even less sense than the Skype acquisition.

AdamGibbins• 15 years ago

Seems a much more reasonable price though.

nakkiel2• 15 years ago

How so? Also, how isn't the Skype acquisition not making sense?

hyperbovine• 15 years ago

Many seem to be under the mistaken impression that the acquisition had something to do with the (rather commonplace) technology Skype uses, and not the bazillion people who use it routinely and treat it as if were synonymous with VoIP.

MatthewPhillips3• 15 years ago

To me the Skype acquisition is great for the industry but bad for Microsoft. I think they're probably going to just waste it; maybe put Skype buttons in Outlook or rename it Windows Live Chat or something.

It's good for the industry because maybe, finally, it'll be the factor that causes a cross-platform video solution to be adopted by the major players.

Best case scenario for Microsoft is they hold fort and just don't make any money off it. I'd love to hear why you think this is good for them.

nodata• 15 years ago

Apparently the future of computing is mobile.

With this purchase, along with the Skype purchase, Microsoft owns the hardware the user has, the operating system it uses, the calling software and user base.

All that's missing is a mobile network.

iam• 15 years ago

But will they have enough money to buy a mobile network after all this is said and done? Would be pretty interesting to see them buy someone like Sprint.

MatthewPhillips3• 15 years ago

Only if people buy the product.

sueders100• 15 years ago

I doubt it will happen, but in combination with each other the two acquisitions make more sense than on their own. Skype+Nokia+Windows Phone 7 would allow Microsoft a similar strategic position to Android+Google Voice. Owning everything short of a carrier allows for better integration of services. They've already got a superior content delivery marketplace with Xbox Video Marketplace/Zune. They've got most of the pieces of something special, but it hasn't coalesced into much yet.

darklajid• 15 years ago

Seems unlikely - and already got a fast response..

https://twitter.com/#!/DrPinball/status/70119002344660992

kenjackson6• 15 years ago

Odd that he didn't flat out deny it. Is he saying the price is way off or that the deal isn't going to happen?

nivertech3• 15 years ago

Only $30B? Right now NOK's market cap is $32B.

Assuming 90% of Nokia is mobile-related. But mobile is: 45% ($14.4B) handsets + 45% ($14.4B) networks. Then $30B for NOK handset business is more than 100% premium to market.

Ericsson sold their handset business to SONY and still has large networks business.

kenjackson6• 15 years ago

This would be a good decision for MS. I think they're seeing with Samsung that relying on partners for phones might be trickier than hoped. By controlling the full stack, ala Apple, they can probably deliver a much better experience.

And unlike PCs, since subsidies dominate much phone pricing, at least in the influential US, a race to the bottom in pricing means very little. The cost of the phone is dominated by the plan cost -- therefore a lot of OEMS competing on phone cost helps very little. And as Apple has shown, a single popular phone can demand better pricing in the supply chain.

yalogin• 15 years ago

They should have bought HTC a long time ago. Though this is just a rumor Microsoft needs to get into hardware in the Mobile space. Previously they feared alienating their partners, now that is not a problem anymore they should buy HTC or Nokia, even RIM would not be a bad idea.

qeorge• 15 years ago

This doesn't ring true to me. Why buy the (very expensive) cow when you're getting the milk for free?

alimbada• 15 years ago

For the beef, of course.

roc• 15 years ago

I don't know if you intended it that way, but that rings truest.

That MS doesn't care about the nominal OS fee they currently get (the milk) as, even accounting for FUD, Android has to be keeping very low.

But they likely want some of the app/media marketplace, the usage data, the navigation services, etc.

podperson4• 15 years ago

rofl -- yes indeed, microsoft continues on its "buying dairy cattle for beef" acquisition strategy.

powertower• 15 years ago

So you can breed it with your male cattle and create a super-cow (with 2x more muscle). http://www.youtube.com/watch?v=rW54_vM9SF0

cppsnob• 15 years ago

$30 billion is less than Nokia's current value.

nivertech3• 15 years ago

http://news.ycombinator.com/item?id=2553192

ck22• 15 years ago

What is happening in this world when historically great mobile brands are being bought out by mediocre ones.

AT&T buying T-mobile. Microsoft buying Nokia. Ugh.

Quality obviously is not a guarantee of success.

Lewisham• 15 years ago

Have you been living in a cave for the past couple of years?

Nokia is not a "great mobile brand". It was a great mobile brand, that then couldn't realize that software was beginning to win the smartphone war, and lost. Badly. Nokia's entire survival has rested on budget phones to developing countries, and that's a market that is not going to win you margins (or loyal customers). I would like you to point me at what you perceive as Nokia's "quality" in the last five years.

Microsoft, on the other hand, developed a great mobile OS in WP7, have been screwed (as I think everyone expected) by their network/manufacturer partners, and placed in the Android-like position they were trying to avoid. A full buyout of Nokia would be win-win for both companies, and a win for consumers too, who get the very decent WP7 software, with Nokia's very decent hardware design.

ck22• 15 years ago

I only got my first smartphone this year so I am only used to nokia's non-smartphones and they were top-notch for things like reception and menu simplicity.

CamperBob2• 15 years ago

Microsoft, on the other hand, developed a great mobile OS in WP7, have been screwed (as I think everyone expected) by their network/manufacturer partners

That's rich.

buyx• 15 years ago

Nokia is not a "great mobile brand". It was a great mobile brand, that then couldn't realize that software was beginning to win the smartphone war, and lost. Badly. Nokia's entire survival has rested on budget phones to developing countries, and that's a market that is not going to win you margins (or loyal customers)

I pointed this out on another discussion: If we take South Africa as an example of this sort of developing market, then Nokia is in big trouble. BBM, coupled with "unlimited" BIS is wiping them out in the middle-lower end of the market. The very poor will continue buying their phones, for now.

lotusleaf1987• 15 years ago

Then why would anyone bother licensing Windows Phone 7? It doesn't make sense, they'd be directly competing with their own customers.

kenjackson6• 15 years ago

If this deal were to actually happen, which is speculation at this point, it probably means that licensing disappears or plays a much smaller role.

MatthewPhillips3• 15 years ago

The truth is no other vendor was taking WP7 seriously. Samsung and HTC merely dipped their toes in, in order to hedge against Android. No one has marketed a WP7 as a top-shelf phone the way HTC Evo or Samsung Galaxy S were promoted.

This could be a confirmation of the rumors that WP7 sales are poor, and they seek to pivot towards a closed arrangement.

flipbrad• 15 years ago

This would make the skype acquisition a great deal more interesting; from the synergies point of view, but also from the antitrust angle, too.

JonoW• 15 years ago

anti-trust, how so?

joshaidan• 15 years ago

Might as well buy Facebook and Google while you're at it. It will make it easier for Apple to acquire all three.

VB6_Foreverr• 15 years ago

Well at least we won't have to listen to Nokia tune again

deadmansshoes• 15 years ago

No just the Windows start up "fanfare" while the smartphones crash and reboot..

Luyt2• 15 years ago

I heard it too many times...

"The Nokia tune (also called Grande Valse on old Nokia mobile phones) is a phrase from a composition for solo guitar, Gran Vals, by the Spanish classical guitarist and composer Francisco Tárrega, written in 1902. [...]

The tune is heard worldwide an estimated 1.8 billion times per day, about 20,000 times per second."

http://en.wikipedia.org/wiki/Nokia_tune

smallhands• 15 years ago

what is exactly is the vision steve ballmer is pursuing ? this deal do not make any sense but you should never underestimate what this guy can come up with

CamperBob2• 15 years ago

The comment upstream about "buying dairy cows for the beef" pretty much nailed the Ballmer strategy. I'm definitely stealing that one.

vtail3• 15 years ago

The author of this rumor (Eldar Murtazin) is notoriously known in Russia for his low-quality journalism. I'm actually quite surprised to see him even being quoted by an English-language media.

For those who can read Russian, check out his blog at http://eldarmurtazin.livejournal.com/ or even http://lurkmore.ru/%D0%9C%D1%83%D1%80%D1%82%D0%B0%D0%B7%D0%B....

kenjackson6• 15 years ago

But wasn't he one of the first people to say that Elop was joining Nokia and later that they'd be dropping Symbian and moving to WP7.

This is a quote from Engadget: "We're inclined to believe there's at least some semblance of truth to Eldar's words because of his track record. Way back in December of last year, when nobody believed Nokia would deviate from its Symbian strategy, Eldar reported the similarly incredible-sounding news that Microsoft and Nokia were in discussions about the latter using Windows Phone as its main smartphone OS. That turned into reality this February, and more recently, the Russian mobile spy managed to also accurately predict Nokia killing off the Ovi brand in favor of an eponymous naming scheme for its services. And that's all on top of Eldar's knack for obtaining Nokia prototypes way ahead of release."

vtail3• 15 years ago

These two data points are impressive predictions indeed.

Still, to me his track record also includes numerous cases where he was plain wrong and/or heavily biased - e.g. he was well known for trashing iPhone/iPad and praising Nokia until some time ago when he suddenly changed camps and now does the complete opposite thing.

shrikant• 15 years ago

FWIW, his mobile phone review is fairly stellar in depth of review coverage (at least for all Nokia phones), and I've followed it for many many years now. I'm surprised that someone would call his work 'low quality', but then again I wouldn't know too much about his 'journalism'.

ShabbyDoo• 15 years ago

Although I doubt the rumor, Nokia's ownership of Navteq makes this even more interesting. What benefit does Google's independent ownership of map data provide in the mobile advertising space? If nothing else, it allows Google to do whatever it likes geospatially w/o a marginal intellectual property licensing cost.

sethg• 15 years ago

I don’t see why MS would do this—at least, not now. The MS-Nokia partnership agreement has just been finalized and it will be another year, at least, before the market can pass judgement on Nokia Winphones. So why would MS dump an eleven-figure sum right now on another Nokia transaction?

(Disclaimer: I work for Nokia.)

limmeau2• 15 years ago

Invest the European branch's cash in the EU instead of paying the taxes for taking it home to the US?

(Disclaimer: I don't work for an international tax avoidance consultancy)

seabee• 15 years ago

Do you have to spend it right away?

Making a bad investment for the sake of investment strikes me as foolish. It's not clear how good an investment it would be, but it should be clearer a year or two down the line

mey• 15 years ago

Also one of the theories on why the bought Skype. Apparently MS has a lot of cash internationally that they need to dispose of...

evo_9• 15 years ago

I'm surprised MS doesn't take a run at RIM, that would seem to be an ideal fit for both companies.

pdx2• 15 years ago

I predict, based on the skype and nokia licensing deal (and this of course, if it's true) that MS will remove skype from the IOS and Android platforms, forcing anybody who wants mobile skype onto MS phones. This would cause a large reason for customers who are on the fence to choose MS phones.

I suspect desktop skype will stay free and unchanged, but IOS and Android skype will be gone soon.

SeveredCross• 15 years ago

I suspect that they wouldn't be that stupid. That would alienate sizable parts of the Skype userbase. Microsoft is stupid, but not that stupid. This seems like pure paranoia to me.

pdx2• 15 years ago

Not paranoia. I don't care. If anything, I want it to happen, as I have a few VOIP ideas that can't compete with a free Skype everywhere.

The reason to buy skype is for it's name, not for it's tech, as everybody agrees it's tech is not worth $8B. The name is only important if it gets you something. It will get you phone sales if you're the only one offering it on a phone.

patrickk• 15 years ago

I doubt they will remove Skype from iOS and Android. That would be incredibly shortsighted, limiting the total amount of people who could potentially use Skype. Those who use Skype currently would switch to Facetime/Google Voice/some new service.

No-one would switch to WP7 just for Skype either. I suspect that MS will try to capitalise on the users on other platforms by attempting to up-sell them on other services. Perhaps a premium service for business users.

podperson4• 15 years ago

Skype 6: "like groove for voip"

nivertech3• 15 years ago

For the contrary MSFT will install Skype to every mobile device possible (maybe even feature phones).

Then MSFT will use Skype for extortion.

It will threaten cellular operators to pay them to disable Skype or make it WiFi-only.

rmason• 15 years ago

How about the possibility that he is a reader of Jean Louis Gassee's blog http://www.mondaynote.com/2011/05/15/ballmer%e2%80%99s-lates...

w1ntermute• 15 years ago

Well, there goes Qt.

Luyt2• 15 years ago

No, there is a free (as in freedom) version of Qt:

"The KDE Free Qt Foundation is an organization with the purpose of securing the availability of the Qt toolkit for the development of Free Software and in particular for the development of KDE software. It was originally founded by Trolltech and the KDE e.V. in 1998. After Nokia bought Trolltech, statutes were updated accordingly."

http://www.kde.org/community/whatiskde/kdefreeqtfoundation.p...

nwmt• 15 years ago

At the risk of going off topic here, with some of the new things Qt is planning (getting away from its C++ roots), maybe it would be best if Qt 4.7 (which is in my opinion one of the best platforms to dev Windows programs, never mind cross-platform) was left as it is, and put into an open-source maintenance mode instead of trying to innovate.

ebiester• 15 years ago

To me, if true, this would be more evidence that Microsoft doesn't understand its core value proposition anymore. XBox excluded, what Microsoft does well is software that helps get business done. It's what makes them the money, and nearly every expansion into other markets has lost them money.

The strategic alliance wasn't with Nokia -- it was with RIM. RIM was the company who understood how business people thought, and imagine a .NET binding for Blackberry development. Build your backbone on Windows, a .NET view for the desktop, and one for the blackberry, using the same interfaces easily.

Now, small moves (such as Bing defaulting as a search provider and better Exchange integration) have been announced this year, but not the big money sunk into Nokia.

pyre• 15 years ago

With RIM in a downward spiral, maybe MS wants to have full control of the mobile phone stack, and then market it heavily to the corporate sector (i.e. make Nokia+WP7 the next Blackberry).

As others have mentioned, this is also a way of keeping their money in Europe and avoiding taxes by exporting it. RIM might have been a better strategic alliance, but they are a Canadian company, so it would be hard to buy them while keeping the money within the EU.

ender7• 15 years ago

I'm not sure I see the point of this. Nokia is already signed on to the WP7 platform. Moreover, most of the phones that Nokia makes are not smartphones. Microsoft would be paying a lot of money for a market they're not really interested in.

On the other hand, what if Microsoft bought HTC? They've worked with Windows Mobile phones in the past, they make some of the better non-Apple smartphone hardware, and they'd be a lot cheaper than Nokia. Android would lose a big manufacturer (no more Evo phones), and Microsoft would gain one. I don't know enough about corporate acquisitions to know if this is a practical option though...

sunir• 15 years ago

Compare this to Apple whose cash reserves (~$66B) exceed the market capitalizations of RIM (~$22B), Motorola Mobility (~$9B), and Nokia (~$32B) combined. That's pretty amazing any way you think about it.

http://www.asymco.com/2011/04/26/2895/

P.S. Microsoft has ~$49B cash on hand.

ansy• 15 years ago

This seems highly plausible given

1) Microsoft's $42 billion cash balance in Europe, $33 billion after Skype purchase

2) Microsoft's success with the Xbox model

3) Microsoft's looming failure with its current WP7 strategy

4) Nokia's patents and Navteq are incredibly valuable for the fight ahead.

Such a purchase would fundamentally change the landscape though. And that may come back to bite Microsoft by pushing everyone else even closer to Google. But maybe that's a moot point. Everyone has already made a broad strategic shift to Android and was only making a small hedge with a WP7 device or two.

EDIT: Looks like there's a half-denial from Nokia's Mark Squires

http://twitter.com/#!/DrPinball/status/70119002344660992

But as a 'Comm Director' he's in the business of spin and not necessarily with the deal makers. No doubt it's easy to dismiss the rumor. It's so big you have to approach it with skepticism even for the people involved.

bb75• 15 years ago

Let's see... Jobs is on his way out of Apple, depending on what kind of disciples he has, Apple may or may not survive without him. He's just too important for Apple, at least in my view.

RIM just announced a recall of Playbook. They're going downhill fast - perhaps if they get DalvikVM running flawlessly, that can be their lifeline until they can get their Flash based apps going/ported - IMHO, a long time in the making before any of this happens, so I think they're due for a downhill roll for a while before they come up, if at all ...

Android and Apple are pretty much eating everyone's lunch for now. Android's strength is its 'openness' (however ill-perceived that may be) and Linux. Apple's is its control over hardware and software.

MS could be looking to become like Apple here... control the hardware as well as the software. It might work - but in my view, they are at least 2-4 years away from having a platform as stable as iOS or even Android, which is relatively new.....

It's a tough call. Probably money well spent, but they can't afford to fuck up the execution. It's gonna require Ballmer to not sleep at night and lose whatever hair he's got left....

bad_user• 15 years ago

Nokia is still the biggest phones maker and it still dominates the market for low-end mobile phones ... the brand itself is still very valuable, with subsidized Nokia phones selling like crazy in Europe. They are also full of patents related to mobiles, being the one company that can kick Apple's ass in that area (does anybody know what happened with Nokia versus Apple?)

If Microsoft purchased Nokia and they would play their cards right, they could build a really credible competitor to the iPhone, with total control of the stack. They could also sell these phones through their huge network of partners, subsidized (as they did with the XBox), but without a 2-years contract.

Basically - subsidized high-quality WM 7 phones without 2 year contracts + Skype preloaded == the bomb, and if Microsoft did this ... holly shit !

BUT, I'm not seeing Microsoft doing it. And if they'd do it, chances are they are going to screw everything because of internal politics.

fauigerzigerk• 15 years ago

That's beyond ridiculous. Not even Ballmer is _that_ stupid.

braindead_in• 15 years ago

It's going to be a nightmare. Its not easy to seamlessly assimilate a company as big as Nokia. It takes time, at least 2-4 years before you see any ROI. Remember Alcatel Lucent. They haven't still recovered.

horatiumocian2• 15 years ago

Is it possible for Microsoft to buy only the smartphone unit from Nokia, and let Nokia manufacture and sell feature phones? That would make more sense for Microsoft, but I am not sure it is possible for a lot of reasons (legal, patents, competition, brand dilution).

IgorPartola• 15 years ago

If this is true... MS has failed. They know that WP7 is dead in the water. They cannot turn around and improve it quickly enough. They have no advantage and every month Android and iOS edge them out. But wait! They have cash! It is all so clear now! They can just buy themselves a successful smartphone platform. Take Nokia's hardware. Add Skype as a built-in killer feature. Mix in some cloud magic and viola! You have the iPhone/Android killer. I imagine that this will drag down everyone involved.

jsnell• 15 years ago

While this would have been unthinkable six months ago, it does seem awfully plausible at this point. Elop has already run the company into the ground, somebody might as well pick up the pieces for cheap.

The part I don't understand is how NSN is supposed to survive without the dumb/smart phone divisions to support it. Ever since the Siemens merger the network business has struggled, and it's hard to see how buying the remains of Motorola's network business is going to help them. Meanwhile Huawei is eating both Ericsson and NSN alive.

ujjwalg• 15 years ago

Buying RIM made more sense in my mind given RIM's penetration in enterprise market.

Rumor: Microsoft To Buy Nokia For $30 Billion

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