Yes, it’s happening. It makes sense and it’s something that critics always told us was the game plan…
“Microsoft just sent Elop in to trash Nokia so that they can buy them on the cheap in a few years time”, they said.
However, even the biggest supporters started to think that it would be a good fit. Ask the regular man in the street to name a Windows Phone and his answer just won’t include HTC, Samsung or LG. Nokia is inextricably linked to Microsoft and vice-versa.
Nokia is Windows Phone
Windows Phone is Nokia.
Following this news, I’d think it insane for any other manufacturer to consider making a Windows Phone. Microsoft has effectively turned itself into BlackBerry in the sense that Windows Phone devices will be made by Microsoft themselves now. Although Microsoft pretty much already did, they’ll now control every tiny detail of the Windows Phone experience, both inside and out.
What once seemed so strange is now mainstream. I remember creating a new “Nokia (Windows Phone)” category when the two companies started working together. It felt weird and wrong, just like that time I tried gravy in custard.
The investors information is quite revealing. Nokia was purchased with off-shore cash so it won’t affect Microsoft’s dividends and Elop will be the EVP of Devices.
How is Nokia doing though? Well, figures have always been tricky to come by, but the investor information reveals that sales are about 30 million a year and it’ll take 50 million devices per-year just for Nokia to break even. They’ve projected a profit for 2016 and, when the deal completes next year, some 32,000 Nokia employees will transfer to Microsoft.
Nokia, as a company, has definitely gone through some immense growing pains, and we’ve seen Microsoft make mistakes with the Windows Phone OS. However, with BlackBerry failing to see the turn-around they’d hoped for, Microsoft could be in a prime position. The £4.6 billion deal also includes yet more mobile patents for Microsoft, plus the Here mapping technology.
How different things were just a few short years ago. Pocket PC’s and Microsoft Smartphones ruled the roost. Microsoft Chief Exec, Steve Ballmer, laughed at the iPhone whilst Nokia handsets dominated the featurephone market. Both companies hit problems though. Microsoft failed to keep pace with a rapidly-changing mobile market, and chugged along at a glacial speed. Meanwhile, Nokia switched from their burning OS and went all-in with the Windows Phone OS whilst their traditional consumer base moved to cheap Android handsets.
The Nokia name, which holds far less brand value than ever, will be retained by Microsoft under a 10-year licensing arrangement. Moving forward, Microsoft will continue to chip away at the almight coal-face of market-share.
Rumours continue to swirl about a Nokia tablet or Phablet, and this news will only add credibility to that.
Now, with Ballmer leaving and Elop changing roles, Microsoft have scooped a bargain price for what was once an almighty mobile brand. The battle will continue, and Microsoft will continue to lose soldiers, but they have an almighty army at their disposal.
Thoughts? I’d love to hear them. Give us your opinions on this below.
The Next Chapter: An open letter from Steve Ballmer and Stephen Elop
Microsoft to acquire Nokia Devices & Services, accelerating the Windows ecosystem
Nokia and Microsoft have always dreamed big – we dreamed of putting a computer on every desk, and a mobile phone in every pocket, and we’ve come a long way toward realizing those dreams.
Today marks a moment of reinvention.
Nokia has an identity spanning 150 years of heritage, innovation, excellence, and change which began and will continue in Finland and around the world. From humble beginnings as a paper mill factory, to manufacturing rubber boots and car tires, and then to mobile phones, reinvention is in Nokia’s blood.
Nokia will now write its next chapter, focused on enabling mobility through its leadership in networking, mapping & location, and advanced technologies.
For Microsoft as well, today is a bold step into the future, a huge leap forward on our journey of creating a family of devices and services that delight people and empower businesses of all sizes.
Our partnership over the past two and a half years, which combined our respective strengths to build a new global mobile ecosystem, has created incredible results: award-winning phones and amazing services that have made Nokia Windows Phones the fastest-growing smartphones in the world.
Building on this successful partnership, we announced some important news today: an agreement for Microsoft to purchase Nokia’s Devices & Services business, to deliver more choices, faster innovation, and even more exciting devices and services to our customers.
Today’s agreement will accelerate the momentum of Nokia’s devices and services, bringing the world’s most innovative smartphones to more people, while continuing to connect the next billion people with Nokia’s mobile phone portfolio.
With the commitment and resources of Microsoft to take Nokia’s devices and services forward, we can now realize the full potential of the Windows ecosystem, providing the most compelling experiences for people at home, at work and everywhere in between.
We will continue to build the mobile phones you’ve come to love, while investing in the future – new phones and services that combine the best of Microsoft and the best of Nokia.
Nokia and Microsoft are committed to the next chapter.
Together, we will redefine the boundaries of mobility.
Steve & Stephen
The transaction is expected to close in the first quarter of 2014, subject to approval by Nokia shareholders, regulatory approvals and other customary closing conditions. Read more here: http://www.microsoft.com/en-us/news/press/2013/Sep13/09-02AnnouncementPR.aspx