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« Location Is The Speedbump on Mobile Highway - Understanding how futile 'Location' is as a driver of any mobile service concept | Main | Sherlock Holmes and the Hounds of the Basket Case: Clues on the trail of Elop, Ballmer and Nokia's Board »

June 18, 2013

Comments

Brian Stevens

Microsoft buying Nokia doesn't achieve anything as Nokia are already exclusive to Windows Phone and are doing exactly as they are told. Nokia are basically the mudguard for the Windows Phone platform.

Tester

>> I wonder who is the guilty party, the responsible for that weak position?

I'd say Elop. The Windows Phone strategy wasn't doomed by default but it was so sloppily and incompetently executed (yeah, destroy all the old assets first before rebuilding from the ground up) that a large part of the potential was wasted before WP even had a chance. Elop didn't even try to keep Nokia on top, he was dead set on eliminating everything non-Windows that he completely forgot that he needed all those customers he lost during the transition period.

Spawn

@Tester

> the name is probably the only thing of value that's left for Nokia.

Numbers in news currently are that Nokia is worth $14b. Patents are estimated $10b if I remember correct. That leaves $4b for everything else including brand.

> If any of these Chinese companies could get the name Nokia and release some quality Android phones under that name, it'd be a home run.

Agreed. Taken the $4b guesstimate and putting a random number like $1.4b to the brand means its 100% all-in vs 10% brand. That's what I mean with "for pennies". More so in that the other 90% include problematic fields like NSN, featurephones potential hard to resell, expensive to close.

@Brian Stevens

> Nokia are already exclusive to Windows Phone

Not tomorrow. Onky option to keep them in is buying them (Microsoft). Every other buyer or option will lead to abort WP. That for sure.

Spawn

@Tester

> Elop didn't even try to keep Nokia on top, he was dead set on eliminating everything non-Windows that he completely forgot that he needed all those customers he lost during the transition period.

Nailed to the point.

Yes, WP7 was not competative and WP8 still needs to catch up but that's not the reason Nokia is down. The reason is Elop decided to burn everything else, went all-in at a time Nokia was still far away from delivering. What was supposed to be a transformation became a black hole with customers having the choice to either stick to a bad mounded EOL dead product or switch to competition. Loyal customers found themself from one moment to the other moved from the trusted and known number 1 productline Symbian to a dead, no-future, worst-of-all, burning and unsupported product. Nokia promissed them something when those customers bought in and a day later it turned out Nokia sold them burning garbage.

Transformation means you keep the current productline running and custoners happy with it while offering an additional line and give reasons to switch to that OVER TIME. Elop destroyed all that with his burning memo in just 5 minutes one year before the very first Lumia for early adopters/switchers was even available. Transformation became abortion. The most stupid management-mistake ever done, what is now known as "the Elop-effect", was born.

Tester

>> More so in that the other 90% include problematic fields like NSN, featurephones potential hard to resell, expensive to close.


Those 'problematic fields' may have a large price tag attached to them - but you stated the problems yourself: They may be very expensive to get rid of and they may offer very little interest for anyone in the mobile phone business.
Which ultimately means that their actual value for a potential buyer is close to zero.

Louis

@Tester: "Which ultimately means that their actual value for a potential buyer is close to zero."

The rumors were just about the handset business, since nobody would actually try to buy the whole thing. Too complicated.

For some reason, the most obvious thing, which is Apple or Facebook buying maps, never seems to come up.

Spawn

@Louis

> The rumors were just about the handset business

Where they? I got the impression it was about a take-over of Nokia as a whole.

> since nobody would actually try to buy the whole thing

Agreed. Nokia as of today is to weak and troublesome. I think behind scene work on splitting Nokia and selling off the pieces happens since a while now. It may even be one reason why MicroNokia isn't going to happen. There is more in, read money, when split.

Tester

>> If Motorola and Sony (et. al.) can stay in the business...so can Nokia.

There's just one little difference:

Motorola is backed by Google and Sony (as well as LG) is a large corporation with different businesses.

Nokia is pretty much all handsets so in case of trouble it won't have any safety net.

Louis

@Spawn: "I got the impression it was about a take-over of Nokia as a whole."

I looked at Bloomberg headlines for NOK, and the Huawei rumor was on the whole thing, and MS one for just handsets, so we're both right. Either way, it seems like a regulatory and contract nightmare.

ejvictor

Nokia is like a Finnish beauty with herpes and a colostomy bag. Everybody wants to be seen with her but no one wants to consummate the proposal, because the drama and “bag”-gage are too problematic.

As we can see Elop has not fixed execution and Nokia has hired retired Porsche designers, who only know how to draw one design (and just like Porsche designers, Nokia designers are mimicking a design created in the “golden age” of the company). The “services” aspect of Nokia is now a mess. Here can’t even find addresses in the USA and the Yahoo driven e-mail is a PITA with constant lags and failed logins.

It’s not so much that Elop is pissing in his pants for warmth, more like he is pissing up a rope with his mouth open.

Spawn

@Louis

> MS one for just handsets

The failed negotiation is big news then. Either Microsoft switched to plan B, WP without Nokia, or they don't expect anybody to bring a better offer to the table. Its all pointing to a bigger strategy-shift within Microsoft. A strategy without Nokia. Bill Gates statement, the public announcement of failed negotiations, Huawei's offer and wording, all inline.

Surface Phone? What other surprising and promissing options are left for Microsoft?

Also what reasons are left Elop isn't fired right now?

Spawn

http://www.tech-thoughts.net/2013/06/failed-microsoft-nokia-deal-strategic-missteps.html

"Now that Microsoft has reportedly walked away, Nokia finds itself in an unenviable position. Even though they may draw acquisition interest from other companies, the company's strategy has ensured that the valuation offered will be even lower than the one from Microsoft. If Nokia's financials don't show marked improvement over the next few quarters, Nokia's board may have to answer some difficult questions."

Could please somebody wake the Nokia BOD up? They need to answer some calls.

Tester

>> Surface Phone? What other surprising and promissing options are left for Microsoft?

Would that be a promising option? I've said it before and I say it again: The only reason WP sold as much as it did is Nokia's brand recognition. If that goes away there won't be much of the market left - maybe those few who own a Lumia and actually like it - and are willing to ignore that there's no healthy ecosystem behind it.

Kenny

@Stoli89
>As for Nokia...they are at the cusp of a recovery, post major restructuring (more to come, but the corner has been turned), so why sell at a discount(?)...even with a reasonable control premium it's not very interesting IMO.

There is as yet no evidence that Nokia is on the cusp of a recovery or the corner has been turned. The modest profit made for Q1'2013 was due to a one-off sale of their HQ and stopping dividend payment. We shall see in Q2'2013 if the corner has indeed been turned.

jbernardo

@Kenny - it seems that Nokia is again stuffing the channel, their sales in Q1 have decreased, but shipments have increased - http://www.tech-thoughts.net/2013/05/Windows-Phone-Inventory-Build-Up-Nokia-Lumia-Shipments.html
That should point to a very negative Q2 and 3, unless they can sell another HQ.

chithanh

Who else is going to be interested in buying Nokia? Agreements between the companies ensure that Nokia patents cannot be used against Microsoft, which decreases their value significantly.

According to the FT article about Huawei, its CEO stated that Android is free for them already, so no royalty payments that could be averted by increasing WP business through Lumia.

Asko

It seems something is happening. Microsoft's Windows Phone boss Joe Belfiore is on quick visit at Nokia HQ when all Finns are on national midsommer holiday. Nokia is not commenting. More on Finnish Broadcasting Corporation YLE's web pages (News in English).

oli

Yes, though Joe is in holiday but he's visiting Espoo. There must be something important to discuss there.

We have two possibilities:
1) MSFT will acquire Nokia handset business or
2) No deal at all with MSFT due to NOK's higher price and Nokia will prepare to go for Android.

Spawn

@Tester

>> Surface Phone? What other surprising and promissing options are left for Microsoft?

> Would that be a promising option?

Lets say its the most promising option left. That Surface wasn't exactly a success or even modest is clear. That a Surface Phone will not change there fate is clear too. But...

> The only reason WP sold as much as it did is Nokia's brand

Define "much". Nokia's brand not helped and so we are down to: can plan B (Surface) keep Microsoft in the game with 2% market share or is even that not possible any longer? That's the level of "maximum success" Microsoft is aiming for now: stay in the game.

The alternate is to give up on WP / smartphones. They have enough fronts to fight at, like Surface tablets and consoles and even desktop, and resources are limited.

Spawn

@Asko

https://mobile.twitter.com/joebelfiore

His tweets:
yesterday Helsinki, today Espo. The whole week in Finland and will not be at build next week.

He's executive and Nokia is still there channel number 1. I doubt its related to the takeover-announcement which is/was done by other people.

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