

Rumor: Microsoft To Buy Nokia For $30 Billion - Garbage
http://www.softsailor.com/news/78888-rumor-microsoft-to-buy-nokia-for-30-billion.html

======
vtail
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...](http://lurkmore.ru/%D0%9C%D1%83%D1%80%D1%82%D0%B0%D0%B7%D0%B8%D0%BD).

~~~
kenjackson
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."

~~~
vtail
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.

~~~
kenjackson
But being a fairweather fanboy and knowing insider info aren't mutually
exclusive. In fact they quite often go together -- think Gruber.

~~~
podperson
Surely a "fairweather fanboy" implies you stop being a fan when things aren't
going well. Does that apply to Gruber?

~~~
kenjackson
I'd give Gruber the benefit of the doubt and call him an all-weather fanboy.

~~~
edw
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.)

~~~
podperson
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.

~~~
edw
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.

------
sethg
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.)

~~~
limmeau
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
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

~~~
limmeau
They could leverage best-of-breed synergies: there is already a Skype port for
Symbian.

------
ansy
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.

------
kenjackson
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.

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bad_user
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.

------
ebiester
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
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.

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jsnell
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.

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rmason
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...](http://www.mondaynote.com/2011/05/15/ballmer%e2%80%99s-latest-
acquisition/)

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

~~~
alimbada
For the beef, of course.

~~~
roc
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.

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darklajid
Seems unlikely - and already got a fast response..

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

~~~
nivertech
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.

------
ender7
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
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.

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IgorPartola
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.

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yalogin
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.

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ShabbyDoo
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.

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braindead_in
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.

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

~~~
nodata
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.

~~~
MatthewPhillips
Only if people buy the product.

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horatiumocian
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).

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evo_9
I'm surprised MS doesn't take a run at RIM, that would seem to be an ideal fit
for both companies.

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smallhands
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

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

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pdx
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.

~~~
patrickk
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.

~~~
podperson
Skype 6: "like groove for voip"

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

~~~
nivertech
<http://news.ycombinator.com/item?id=2553192>

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w1ntermute
Well, there goes Qt.

~~~
Luyt
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...](http://www.kde.org/community/whatiskde/kdefreeqtfoundation.php)

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flipbrad
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
anti-trust, how so?

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

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

------
ck2
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
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.

~~~
buyx
_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.

------
bb75
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....

------
lotusleaf1987
Then why would anyone bother licensing Windows Phone 7? It doesn't make sense,
they'd be directly competing with their own customers.

~~~
MatthewPhillips
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.

------
VB6_Foreverr
Well at least we won't have to listen to Nokia tune again

~~~
Luyt
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>

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

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

