
Microsoft almost bought Nokia - twidlit
http://www.unwiredview.com/2013/06/20/nokia-in-acquisition-talks-with-microsoft-so-thats-why-meltemi-had-to-die-and-elop-kept-his-job-after-2012/
======
mtgx
Nokia is doing so badly with WP8 even Microsoft doesn't want them. What does
that tell you about their current strategy?

I've always believed, and I still think it would be true - if Nokia would
adopt Android, they could probably even beat Samsung. It would've certainly
been true if they did it 2-3 years ago, before Samsung got a chance to become
the king of smartphones, but I think it can still happen if they do it now,
and wait 2-3 years for it to happen. Obviously it won't happen overnight, but
at least they have a shot at it with Android.

They'll _never_ do it with WP8. The math just doesn't add up. They'll always
be limited by the WP ecosystem and the WP market share. Samsung has 30% of the
smartphone market, which is about 40% of the Android market share.

Nokia will have at most 50% of the _WP market share_. It only has more now
because the market is very tiny, but that would change if WP market grew. That
means that for Nokia to beat Samsung, WP will need to get to 60% of the
smartphone market share, and it means beating Android in market share. WP will
never get that much market share, and even the most optimistic (and I believe,
unrealistic) predictions by research firms put WP at 20% - _5 years from now_.

So if Nokia wants to stop being more than a niche smartphone player in the
future, they'll have no choice but to at least also adopt Android. It's the
right strategy for the Nokia board to pick. They just seem to be very stubborn
about it, just like they were too stubborn to fire the Nokia CEO before Elop,
for _4 years_ after the iPhone launched. The Nokia board needs to smarten up
if they don't want to make an almost fatal mistake once again. Or the
shareholders need to overhaul the board. One of the two needs to happen.

~~~
pavlov
_So if Nokia wants to stop being more than a niche smartphone player in the
future, they 'll have no choice but to at least also adopt Android. It's the
right strategy for the Nokia board to pick._

This is exactly the same thing that everyone was saying about Apple in 1996.
Apple's board had to decide between several OS alternatives to replace the
failed homegrown Copland project. There were BeOS and NextStep that could be
bought outright, and they also considered licensing Solaris or Windows NT.

A lot of observers were saying:

"Microsoft has won. If Apple wants to be in the computer business, they have
to adopt Windows. It's the right strategy for the Apple board to pick."

Would Apple be around today if they had decided on Windows NT instead of
NextStep? Not likely. The obvious popular choice is often not the right one --
it's "skating to where the puck was".

~~~
molmalo
I think that's not a valid analogy. First, the last time I checked, Apple is
still a niche player in the global computer market. Their current success is
not because of their position in the computer market, but because of their
current position in the MP3-Player (iPod) and smartphone markets.

And second, because Nokia is not betting on their own OS (as Apple did), but
in someone else's OS. That means a different kind of pressure from their
investors, and a real submission to another company. And they put all their
eggs in the same basket. They did that in order to have something really
different to offer (they were afraid to compete without a real differentiating
element, and not just a different launcher). But that strategy is not working
and Microsoft is trying really hard to get other brands to use their OS.

So, if MS is not putting all their eggs in the same basket, why should Nokia
do it anyway? Just staying on the same road, knowing that there's a cliff
ahead, in hopes that something will happen... may not be the best strategy.
Even if they really believe that Windows Phone is the future, they could use
another line of smartphones, with a different OS (even using stock Android
could be considered a differentiating element...) just to get some cash that
gives them some air (especially from their investors).

~~~
ishansharma

        I think that's not a valid analogy. First, the last time I   checked, Apple is still a niche player in the global computer market. Their current success is not because of their position in the computer market, but because of their current position in the MP3-Player (iPod) and smartphone markets.
    

But this niche market saved Apple from bankruptcy. Had they not gotten
NextStep, they would have been bankrupt.

~~~
bergie
The Microsoft investment and their promise to port/maintain Office for Mac OS
were what bought Apple enough time to come up with new product categories like
the iPod.

------
skc
I'm pretty surprised by the fact that almost everybody in here is of the
opinion that Nokias Windows Phone strategy is not working.

Last I checked, selling more and more smartphones per quarter while slowly
growing marketshare, especially in Europe, is not the sign of a bad strategy.

It's amusing to me that people consider success to mean 50% marketshare
overnight. It's equally amusing to me that people fail to see that Android is
absolutley no guarantee of success either, see HTC for example.

Nokia made a bold bet, but because they chose a MS platform it's not
surprising that the HN crowd see this as failure. I mean we have people in
here saying they should even have gone with FireFox OS!

Wow.

My opinion, this is a slog, and Nokia is at least making a game of it and
walking in the right direction.

~~~
nikster
There are no slogs in business. Nokia is on the brink of death.

The problem with the WP strategy is and always has been the exclusivity. From
Nokia's perspective, why in the world would I want to exclusively sell WP
devices, and not _also_ Android devices?

Note that that's what the others do. They're selling WP. Should it become a
huge hit, Samsung and LG already have WP devices. Should it fail - well,
obviously they've got tons of Android devices / experience.

Why would you want to tie yourself to a single technological choice like that?
The answer is you don't want to, you never should, and Nokia is suffering
because of this decision. I know they got cash for it - it was a very bad
deal.

This bold bet idea - where did this come from? What's bold about limiting your
own choices? That's not bold, that's stupid.

~~~
Spearchucker
_There are no slogs in business._

Careful. That's a view that can burn badly. A slog is nothing more than a
strategy, which consists of _many_ discrete tactical steps [1].

Dig into Microsoft's acquisition history - they never acquire market leaders.
And the world is surprised when, 5 years later, that non-market-leading
acquisition is behind a market-leading Microsoft product. Not all work out
that way for sure, but those that do, do so spectacularly.

Microsoft's relationship with Nokia is not an acquisition but shows signs of a
similar strategy, nonetheless. mhomde's points above [2] are pretty accurate.

Microsoft are masters of the long game.

[1]
[http://en.wikipedia.org/wiki/The_Art_of_War#Chapter_summary](http://en.wikipedia.org/wiki/The_Art_of_War#Chapter_summary)

[2]
[https://news.ycombinator.com/item?id=5910708](https://news.ycombinator.com/item?id=5910708)

------
tkorri
The whole news about Microsoft buying Nokia is just a rumor. It's probably
something that might happen but it's still a rumor that has been circulating
since they announced their alliance in 2011.

So I think writing "And it explains so much about the disastrous strategic
choices Nokia made for its mobile phones division over the past year." is
pretty far fetched stuff.

The author also added "citations" from WSJ that don't appear in the original
article (for example "... in part because of the price and Nokia’s own
strategic predicament"). So I wouldn't give much weight on what this guy is
writing.

------
jacquesm
As long as Elop (ex Microsoft) is there Nokia will not move to Android.

Nokia makes super hardware though, they could still turn the ship around if
they wanted to and give Samsung and Apple a run for their money.

Microsoft got all the advantages of owning Nokia without having to pay for it,
windows phone is so rare I can't even find someone that has one in my circle
of friends. The only person that _owned_ a windows phone received it from her
employer, promptly bought an android phone and switched the sim over.

~~~
nestlequ1k
Agreed, I'll be instantly interested in buying a Nokia phone once they start
shipping the latest version of stock Android (ideally without any bloatware
and useless customizations that Samsung / HTC pushes).

Elop needs to go now. What an ass clown. It's been a while since we've seen
someone with such bad ideas making such horrible decisions, one after another.
He reaped what he sowed, and the board can thank him for decimating a once
fantastic phone company.

~~~
jad
> Elop needs to go now. What an ass clown. It's been a while since we've seen
> someone with such bad ideas making such horrible decisions, one after
> another. He reaped what he sowed, and the board can thank him for decimating
> a once fantastic phone company.

Shipping phones running Android is far from a guarantee of success. Indeed,
only Samsung is doing well with Android right now, and even then only in the
last year or so. Every single other Android handset maker is struggling.
Android turns your hardware into a commodity, just as Windows turned PC
hardware into a commodity. It's very hard to overcome this simple fact, even
if you do make great hardware (see the HTC One). Don't take my word for it,
ask HTC, ask LG, ask Motorola/Google, and so on.

Elop surely doesn't deserve to be dismissed as an "ass clown" for adopting
what almost every critic agrees is a first rate phone OS. If Windows Phone had
just a tiny bit of momentum, partnering with Microsoft would be a great
strategy for establishing differentiation from Apple and the various Android
phones.

~~~
leoc
Agreed that Android is not an easy gig for mobile-phone manufacturers; it
isn't intended to be, after all. But if you look at why Samsung has done well
with Android, the reasons appear to be 1) a fairly consistent record of
delivering strong hardware, in good time 2) decent public brand recognition
and loyalty and 3) not screwing around too badly with the Android software.
All of the Android also-rans seem to have had significant problems with at
least two of those. Nokia has 1) and 2) pretty much nailed, so if it could
only restrain itself on 3) it would be in a position to contest the top of the
Android pile with Samsung.

There's also Nokia's strength in featurephones and in the developing world; to
maintain that position it will need a smartphone OS it can take to the real
masses in the fairly near future. No-one is even suggesting that WinPho can
play that role. Android may or may not be the best candidate for the role, but
if OP is correct then Nokia's MS relationship hasn't just precluded it from
putting Android on entry-level smartphones, it has prevented Nokia from
deploying any other smartphone OS at all.

------
rurounijones
Nokia hardware is pretty legendary. I echo other comments that Nokia hardware
combined with Android would give Samsung a good run for its money.

Still annoyed about the N900 and Maemo/Meego/whatever it is called now.

~~~
kryten
This.

I'm writing this on a 2 year old Lumia 710. This replaced a 6303i. The thing
has had the crap bashed out of it but it has never faltered, not once. In that
time it has never crashed as well.

To be honest, the only bit I don't like about this as a Windows Phone is
Microsoft. If someone else came up with it, I'd be happy.

~~~
tomflack
What's the value of your anecdotal experience? I can add my own - my 6 month
old Lumia 920 has been back to Nokia for repair. Twice.

Nokia hardware may have been legendary, but it certainly isn't any more. Some
of the fit-and-finish on their stuff is weak now (sim tray on 920, dust
getting in the front facing camera on the 920) and the rest of the industry
has moved on.

The 710 isn't even two years old. It's at most, 19 months.

~~~
iamshs
What's the value of _your_ anecdotal experience?

~~~
tomflack
Exactly the same as the comments that I was replying to: zero. I posted it to
illustrate this, since they are exact opposite experiences and now we have two
statistically insignificant data points contradicting each other.

------
schuke
It looks Nokia is in the vantage position now. Nokia can afford walking away
from Windows Phone. But Microsoft can't. Nokia accounts for roughly 80%* of
all Windows Phones. If Nokia leaves, WP is basically doomed.

*[http://blog.adduplex.com/2013/05/adduplex-windows-phone-stat...](http://blog.adduplex.com/2013/05/adduplex-windows-phone-statistics.html)

~~~
josh2600
Correction, windows phone is doomed, irrespective of Nokia or Microsoft's
actions. People just hate windows; Microsoft should just change the name and I
swear they'd sell like gangbusters.

You have to understand, Nokia and Microsoft Both lost position in the market
as a result of working together. There's a big portion of the world that would
buy a decent nokia phone, just because of the history. Fuck Microsoft, make
the world's most badass android phone and they stand a chance. Standing with
Microsoft is killing them.

~~~
sliverstorm
_Microsoft should just change the name_

How about "Portals"?

~~~
josh2600
Numbers scare people. Windows phone 8 sounds scary. Why not Windows "Portal"
or Windows "Air" or simply "Air".

Microsoft just sucks at marketing and so does Nokia; which is run by an ex-
Microsoft employee. I swear he went to Nokia to ruin them and put them in a
position where Microsoft could acquire them.

~~~
annnnd
Don't account to malice what can be accounted to incompetence. :) If MS
acquired Nokia it would sink only lower, and MS knows it, that's why they
killed the deal.

~~~
josh2600
I do think you're ignoring the market reality. Before elop, Nokia had a 12-15%
global market share and windows had 3. As a consequence of the migration away
from Symbian (the infamous burning platform memo) Nokia went from 12-15% to
3.2% in very short order, like 2 years. The lift to Windows phone? .4% market
share.

In short, Nokia burning 10-12% market share to boost Windows by .4%. It's one
of the worst business case studies ever: how to kill a manufacturer.

There's no way Nokia would be at 3% market share if they'd gone after the
future OS after Symbian. There's no way Nokia would be at 3% if they went with
Android. All of the mobile OS geeks knew Windows was doomed because in the 10+
years they've been releasing Mobile OS systems, every single one has been pure
crap. Why would WindowsP8 be different?

Seriously, Nokia was a sacrificial lamb on the altar of Baller with Elop as
high-priest.

~~~
thornkin
Blackberry went with the "future OS" and now has cratering market share (under
3%). HTC went with Android, and had a head start over Nokia, and it too has
less than 3% market share. Motorola is owned by Google and has virtually no
market share.

Everyone seems to assume that Nokia would do well if only it had used another
platform. Why? Most of it's competitors haven't.

------
bojan
I think most of the commenters in this thread are overestimating Nokia's
capability to beat Samsung were it to switch to Android. Samsung's marketing
budget is so huge that I don't see how Nokia could ever compete, unless they
would release a phone that is so much better than anything Samsung can come up
with that it compensates for marketing. And that is much easier said than
done.

~~~
camus
it is not about switching 100% to Android. It is about, like Samsung or HTC
diversification. What the h... were they thinking when they signed that
agreement with MS , short term profit ?

~~~
bojan
They were thinking about survival maybe? I am not sure how much money they
immediately received from MS for the deal, if any?

But even if they diverse, what would be their Android marketshare? Would they
have resources do build properly for both Android and WP? Lumias are made for
WP, even their design shows that, would that same design work for Android
phone?

------
mhomde
"First they ignore you, then they laugh at you, then they fight you, then you
win."

The common perception seems to be that WP & Nokia is failing but I actually
think they've managed to turn things around, there's a little inertia but
they're getting there

1) Major players has started developing and supporting windows phone apps.
Twitter, Tumblr,Facebook, WhatsApp, Foursquare all have quality apps. Maybe
they're not updated with the frenzy of the pace-leader Apple but what do
people expect when they're coming from behind. Compare that to blackberry
which is a true wasteland

2) Nokia has been stellar in its support of its Windows Phone users, pushing
out excellent updates, services and apps. Perhaps its partly because they're
fighting for their life but I'd argue that Nokia is one of the best phone
manufacturers there is right now from the users point of view.

3) Nokia/Microsoft is between update cycles. Nokia won't and can't push out a
major flagship phone before Microsoft has the next major version of its OS
ready. A major complaint of Nokia phones has been hardware specs (which I
think its a little retarted since WP performs as well or better than many
android phones on "less" specs), with the next update MS will probably up the
support for newer hardware and resolutions

4) Microsoft and Nokia has a very compelling ecosystem together, something
that even Samsung is hard to match. MS has Office/Yammer/Sharepoint/XBOX and
Windows. Nokia has a range of quality services within mapping, music, local
transit. While most are not pack leader they're certainly not that far from
it.

5) If anyone thinks Microsoft going to stop pouring money at the problem
and/or adapting & improving they're crazy, and their coffers are huge. Tablets
and Windows Phones are too important a segment for MS to ignore so they will
continue to claw themselves to the top until they're at least firmly top 3.

6) Windows Phone at its core is one of the most recent & modern OS's there is.
Android & IPhone have been around longer and has more bagage.

7) Windows Phone leads in user satisfaction so clearly they're doing something
right. The only thing that's holding them back is "lack of apps". But I think
what Windows Phone lacks is not quantity of apps, but what they need is a few
unique "flagship" apps to show its a contender and they will start to change
the impression of the platform around.

Also I think at its core WP is the only phone that has a UI paradigm that will
work in the long run. Its flabbergasting that people can spend so much time
arguing how the icons look in ios7 looks like and _not_ that its an outdated
limited paradigm. The future belongs with more glanceable / dashboard-oriented
UI's

Microsoft have however dropped the ball a little, they should have been doing
as good a job as Nokia: pushing out apps, updates and features more quickly.
But we'll see, WP8 was the first version using the new kernel so there
probably was some housekeeping to be done, once the behemoth gets rolling
we'll see what happens.

I think Nokia made a good bet although its hard to say. Look at the trouble
HTC is in now. Sure Samsung is up right now but all manufacturers are only one
missed cycle from being screwed. Android is so commoditized that's its hard to
differentiate. Meanwhile Nokia is owning a whole powerful ecosystem on its
own.

In the end however I think any company that doesn't have an app store is
pretty much screwed so that leaves Google, Apple, Microsoft and possibly
Amazon

~~~
mahyarm
On #1, half or more of these players have been directly paid by Microsoft to
develop for WP, and many other popular app makers are being courted if they
haven't said yes yet.

~~~
yajoe
Living in Seattle, I happen to hear through the grapevine that most of the top
100 apps are funded by Microsoft (it's a mix of contractors, in-house, and
revenue-sharing agreements). Spot on.

Recent, public example where it backfired:
[https://news.ycombinator.com/item?id=5715889](https://news.ycombinator.com/item?id=5715889)

------
wwweston
An MS buyout is exactly the end of the Nokia story I'd anticipated once they
set the Windows Phone course, so I guess the only thing I'm surprised about
was that it somehow fell apart.

Looking back, maybe I overestimated the value of Nokia's patents and
distribution reach -- maybe the patent war flamed up/out too fast, maybe
competition already made the distribution moot.

Or maybe it's hard to convince MS that Nokia really has much value to offer
them after they were essentially able to get Nokia to yield significant
control to them for almost nothing.

------
v0lta
A point that a lot of people don't see with WP8 is that it runs great
(compared to Android) on low-end devices. You can get a Lumia 520 for ~150€
where I live and it offers (theoretically) pretty much everything a Lumia 820
or 920 does, except Games.

------
surjithctly
Nokia can still control the market by releasing Android phones.

~~~
josh2600
But they suck and they won't do it.

I hate to put it that way, but how many years has this bullshit been going on?
I loved Nokia. They made amazing phones once upon a time, but it has been a
decade of crap. When's it gonna change? What's it gonna take?

I thought when marten from Eucalyptus and MySQL joined the board things would
change but that hasn't been the case.

~~~
orenbarzilai
Betting on microsoft wp was a bold move! unfortunately (for them) it didn't
pay off so far... They can still change their mind and start producing great
android phones improve their revenue and tag behind samsung & htc.

~~~
nikster
There's a fine line between bold and idiotic. The MS deal was probably one of
the worst business deals in recent history. Giving up all your choices for a
one time cash payment?! Putting all eggs in one basket, and at that, a basket
that never seemed very promising at all?

I sure hope Nokia is working on Android phones right now, and please for the
love of God kick out this idiot Elop, how much damage is he allowed to do?

Microsoft is the Titanic and Nokia has tied itself to it. Cut the ropes before
it's too late!

------
Ygg2
I have to wonder, why Android? Why not other alternatives? Like FxOS? Or both?

~~~
mtgx
Because those are just like WP8, strategy wise, but _worse_ (even smaller
ecosystems). They need Android to truly succeed.

~~~
iamshs
[https://twitter.com/asymco/status/309407743150784513](https://twitter.com/asymco/status/309407743150784513)

Ok.

~~~
vetinari
And it went back up in the May, when they started to sell the HTC One.

------
wedesoft
Maybe Nokia should consider Firefox OS.

