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.
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."
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.
Isn't it possible that Gruber, you know, actually has a mind, and that he uses it? In my experience there are more knee-jerk haters of companies or even ideas that there are unthinking "fanboys." While Gruber can be very hard on people who have a solid track record of irrationality or intellectual dishonesty, he doesn't write off anyone who disagrees with him as Android sheeple. And there are times when he's quite critical of Apple. Basically, he's a nuanced thinker who doesn't hide the fact that he has an affinity for Apple. It's not like he's one of our fellow Philadelphians who think's Michael Vick is evil…until he starts winning games for "us."
So chill out a litte with the hating. (Of course, given that I've owned and used almost exclusively Apple computers for the last thirty years, everything I write may very well be just as subject to the same "fanboy" well-poisoning gambit.)
Indeed. I'd suggest that, to paraphrase Colbert, "reality has a pro-Apple bias". The smarter Mac "fanboys" -- I would consider myself one -- are fanboys precisely because Apple has generally made good products for an awfully long time. Even its turkeys are generally made with good intentions, not as a way of screwing its customers.
At least since Jobs has been back. There was some fairly ill-conceived if not exactly malevolently-designed stuff coming out of Cupertino during the interregnum.
A recent linked piece nailed Apple's strengths and weaknesses: If Steve uses it, it generally rocks. If it doesn't, it could very well blow e.g. Ping.
To clarify: the fact that his prediction about iPhone future were wrong doesn't tell much - many industry observers were predicting that it's going to fail.
What matters to me is good vs bad journalism - ability to acknowledge one's mistakes, checking one's sources, not trashing one's opponents, etc. etc.
Maybe he's in touch with a Nokia insider that has knowledge of their intentions, and this is way he is so good at predicting Nokia-related news, but not other news.
> These two data points are impressive predictions indeed.
One of them is not. It's been long obvious Symbian was a dead end. Phones are getting more powerful and Symbian was targeted to very simple chips. As processors got more powerful, it became comparatively harder to scale Symbian up than to simply use Linux or other Unix like kernel that would be perfectly at home on a 32-bit, multi-megabyte RISC machine (more or less like the first Unix workstation I had on my desk).
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'.
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?
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
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
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.
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.
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.
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.
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.
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.
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.
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...
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Large user base; proven and useful technology. Most Skype users find a value in it (I do think there's more money to make than what has been made so far). In the end it's a technology that could help brighten Microsoft's image.
If they manage to integrate it gracefuly in their office & collaboration stack, without ruining it as a standalone product, it may very well be a winner for them.
Indeed the challenges are huge but I believe this is the right time for challenges at Microsoft.
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).
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
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.
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.
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.
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.
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."
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.
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.
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.
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.
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
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....
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.
"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."
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....