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back to article Russian rumor: Microsoft to buy Nokia for $30bn

Today's unsubstantiated but intriguing rumor: Microsoft will buy Nokia's mobile division – smartphones, feature phones, plain-vanilla phones – for $30bn, and the deal will be completed this year because "обе компании очень сильно торопятся." That last phrase is Russian for "both companies are very much in a hurry," and comes …

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Terminator

Title

Aaah!! So that's why they bought Skype!!

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Actually yes

Just read the article. Agree with him on most points, however you do not need to have sources in Nokia to guess that.

MSFT will either consume Nokia and spit out the bits it does not find to its taste or the alliance will go the same way as the Ericsson/MSFT alliance of old went.

Skype is a necessary figure in the 4G revenue bargaining chess game between vendors and operators. It gives Microsoft a bargaining position on par with Google and Apple when facing the operators which it clearly wants to do. It is a statement that it will not comply with operator ideas and can do OTT voice bypassing operator billing and it is money well spent.

Such a "you are a bitshifter, get lost" stance is not a natural position for Nokia. Nokia has always been on the operator side as far as charging models, revenue, VAS, etc (one of the many reasons for Ovi to be a total flop as it was necessarily half-hearted). In fact, it has written the book together with them in 3GPP and it has HUGE vested interests on its NSN side in the 4G financials being done the 3GPP envisioned way with all charging going through IMS and no apps, no app stores and no OS vendor supplied charging.

Sooner or later the interests of these two will collide. There is no other way as they are on the opposite sides of the table from the very start. At that point it will make more sense for Ballmer to eat Nokia and spit out the bits which have a distinct 3GPP financial model taste to them like NSN. Looking how 4G, Nokia market share, MSFT, etc are going this will happen in less than 1.5 years. So end of year prediction is not way off...

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Gates Horns

Actually no...

Why buy the cow when all you want is the milk?

Sorry bad analogy.

You do realize that such an acquisition will get a lot of scrutiny and face objections in Finland.

And not to mention some sort of share holder lawsuit...

Elop is now taking charge at Nokia and is making changes. ( This has already been reported on in the press. ) In order for any negotiations to take place, the dust has to settle.

IMHO I don't think that they are true and wishful thinking on the part of some people. But who knows. Microsoft just overpaid for Skype....

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Microstock

First: pretty sure Eldar is the son of Beldar, the father of the Coneheads family. He may blog in Russian, but he's from a small town in France. Remulak, I believe it was.

Second: any news that gets confirmation from a SoftSailor, LimpRudder or other flaccid nautical equipage must be viewed as suspect.

Etc: if those two companies do choose to mate, I don't want to see the baby pictures.

My title has nothing to do with anything I typed in this box.

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Bronze badge

It couldn't happen to a nicer company.

"Mission Accomplished" indeed, when those words were said the carnage hadn't even reached its climax.

It's going to be interesting to see two instead of one giant explode and die.

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Phishing in Finland

Pure logic mon capitan, if only for the reason that Microsoft have always been lame in the mobile device sector and need a massive leg up. If putting Elop in the top spot wasnt a big enough clue in the first place that this would happen eventually. Recession is a consolidator no?

I can only see this working out for the best in the end. The majority of folk like a cohesive computational experience that just works, see apple for the proof concept, for the rich at least. Now roll that out the the Windows userbase with hot coffee hardware from the Nokia people, add a dash of cloud based media storage and we have a winner, for the bean counters at least....

Sent from my Nokia phone

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Used a Windows phone? (not 6.x)

One really wonders what kind of PR magic it needs to convert 100M heavily multitasking, charging every 4 days, restarting only at movie theater userbase to Windows Phone.

The number Elop dreams is way higher, just couldn't dare to write myself.

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Stop

Come again?

"The majority of folk like a cohesive computational experience that just works"

And mashing two companies that have both had the chance to produce precisely that, but failed, is going to work how, exactly?

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There's a shock...

Well actually, it is a bit of a shock. I would have expected M$ to do it's normal trick of nigh on destroying a company completely before picking it up for $5, so they really must be in a hurry to be thinking of buying the company for some big cash before they have finished completely wrecking it.

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re: There's a shock...

the reason MIcrosoft has been able to drive companies into the ground before purchasing/settling cheaply later is because they could pilfer their technology and embed it into Windows thereby netting them lots of customers and the other company gets none.

They can't leverage Windows in this way with the phone and therefore they can't wait to kill Nokia's customer base. It's very much like the Hotmail deal. They need the customers to let the PR folks loose with numbers showing how great they are. If they'd run off all the Hotmail customers, they'd be starting with zero and it would have taken years to show Outlook and then Exchange had so many customers to the detriment of Lotus Notes. Nokia has one of the top channel distribution networks for their phones and also lots of users but the user base is falling fast. They need the distribution channels intact and they need the user base.

If Nokia market share wasn't falling so fast, I wouldn't think twice that this story was bogus. But seeing the recent numbers means that Microsoft and Nokia need to work faster or there'll be little left of Nokia by the timeframe originally laid out. A full blown purchase might move the Microsoftification of Nokia along much faster.

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sniff sniff

I think I smell bullshit.

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I remember saying the same

I really remember seeing rumor about windows switch months before it happened and saying similar thing. If it is Nokia and Finland, anything can happen. They let a national treasure rot in some trojans hands, basically handing Nokia to Redmond. Don't they have media? Secret service? What does EU do? Nokia is the only remaining European brand.

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and suddenly....

microsoft buying skype makes a little more sense!

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Black Helicopters

I believe

I welcome our new Phoney overlords..

Oh...

There is still a lot of Nokia that isn't phones. The ordinary Nokia phones are probably doomed by Samsung and the Chinese.

Best to get out..

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Black Helicopters

That would put Elop on the same train as Lenin, so to say.

I'm impressed.

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Won't be surprised a bit

After their phasing out Symbian and giving up one of the most advanced frameworks (qt), nothing can surprise me.

Unlike media and american bloggers, 100M people liked Symbian and still use it. People who knows how to develop for mobile has no problem shipping software for it and become successful too.

Anyway, they can also sell it for $1, I don't really care. It isn't Nokia anymore anyway.

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Anonymous Coward

So what would be left?

It makes sense in a twisted sort of way. nokia is quickly fading to a shadow of its former self, selling out to something they themselves defined themselves as not to be. They still know how to make decent hardware (which redmond does not) and convinced themselves their software was inferior to redmond's offering (debatable). As for management, well, if Danger is any yardstick, they're about on par. Going the redmond way was a bit of a leap of faith that many here (me included) think is more of a high jump. At any rate, the fall is pretty deep, even Elop admits that.

First thing I asked was: Suppose they do that, what would be left of nokia? Pardon my ignorance, but a stake in the nokiasiemens joint venture and a stake in symbian ("open for business, not open source") and then what? A couple too-hip-for-their-coffee Londoner designers? Spendy contracts with accenture? What?

And what would they be getting back? 30e9 USoA pesetas in cash? I think not. It'll be mostly stock in... something. Maybe a stake in that new patent troll redmond set up, who knows.

To redmond, it makes more sense. It's not cheap as a replacement ticket to mobile after the danger failure, but they've never been shy about splurging out the greenbacks to catch up after fscking up. They have lots of experience with both. And as a design house it's not bad. Even the management styles should match well already. Win-win baby.

And to the rest of us it would prove that our darkest projections were indeed correct. Elop would prove himself to be a Trojan Beluzzo after all. Oh well. I was pretty much done with the mourning anyway.

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Buying market share

Looks like Microsoft wants to buy market share. Hate to break it to them, customers will leave, If they wanted an MS powered device, they could have bought one. MS bought Danger, what have you heard from them lately?

If the current Windows Phone 7 manufacturers were smart, they tell MS, cease talks or we walk today. It would be a bit hard for MS to expand their user base and their ecosystem with no handset manufacturers shipping their phone OS. That would put a but of a kink in their plans. Users will forget about Windows Phone 7 and their ads would be fruitless. It would be in the best interest for the current manufacturers to take a stand. If they don't, what happens when MS has Nokia, the third-parties are ignored. Take the loss now, rather than later.

In Q1, 2.5 million handsets were shipped running Windows Phone 7. How Nokia thought that it could help them is beyond me. Even if they had 100%, that is 10 million a year. They sold 100 million Symbian handsets last year alone. Windows Phone 7 will never reach 100 million a year.

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FAIL

Being smart vendor

"If the current Windows Phone 7 manufacturers were smart, they tell MS, cease talks or we walk today."

IF they were really smart, they would walk away today, without telling MS anything! All of them already do also Android phones, so it would not be a big problem for them. On the other hand, staying aboard WP7 is now a risk, because of Nokia's role as the anointed hardware supplier, or possibly as integral part of MS. Other WP7 vendors will be second-class citizens - on a burning platform.

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Megaphone

"Windows Phone 7 will never reach 100 million a year" - Lance 3

That was a dangerous prediction but I've got you on the record now.

Nobody ever thought XBox would be as huge as it is. Nobody thought, for example, that MS stood a chance with Access (a hideous piece of crap but they make money on it anyway) when dBASE ruled the small database world. And yet, they do.

You might want to make a nice sauce to go with those words.

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FAIL

Contracts...

does the word mean anything to you?

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Windows Mobile 6.5 would replace Symbian

Windows Mobile had similar usage pattern down to developer style of coding. There are companies who only produced Symbian and Windows Mobile software since the software is only possible on these platforms which gives very deep level access to trusted developers/software houses.

Checking the stuff I normally use on my Symbian handset, there isn't a slightest chance that they can be reliably coded on Silverlight or being allowed to run without effecting OS performance. Typing this from Opera Mobile to begin with.

I mean it would be less crazy if they moved to Windows Mobile 6.x+ instead of Windows Phone.

Nokia owners loves utilities, resident apps, security solutions (how can one code kaspersky with sl?) and a very competitive market exists for built in device software replacements such as browsers.

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Silver badge

Such a teasingly tempting rumour to believe.

Hence, I won't believe it until it happens.

If it does happen though, I won't have needed this article to lower my surprise levels any further. Microkiasoft or whatever it's called will end up as the only company producing Windows phones if this happens. I mean, other manufacturers might theoretically be allowed to play but why in the HELL would they want to?

Unfortunately, Microkiasoft is not Apple, and only Apple really has the required fanbase to pull off such a vertical strategy. Could be good news for the more horizontally-inclined Droids all round, really.

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Pirate

After the Skype Madness 30B for Nokia almost looks sane.

almost...

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FAIL

Problem is

They will only really be buying the Nokia name, there is nothing left of the former company worth having anymore, Microsoft have already destroyed it.

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Elop also wasted Nokia brand so they waste their money

With Symbian given up, say bye to legendary battery life, stability,security and of course deep level running marvellous hacks (in real meaning) such as iOn battery meter/kaspersky/f-secure/Opera Mobile.

So what would be left out of Nokia? S40? Can MS actually develop something like that OS? The only other similar OS has been bought by RIM already, something that can scale that insane levels. (qnx)

I am sure if they have seen source of that OS running on more devices than PCs, they would do nothing but be amazed. As that company is known for their childish behaviour, S40's future may have been dangered too.

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Gates Halo

You've got it all wrong..

You've got it all wrong.. *This* is the secret memo with the $30bn:

http://www.mobilegazette.com/elop-ballmer-memo.htm

(Note: check the date carefully!)

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Anonymous Coward

Jokes frighteningly close to reality

Parrot - the common bytecode runtime for Perl and Python started as a 1st of April joke on Slashdot.

Never underestimate the power of a well placed joke.

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Terminator

His sources good they are...

Sith icon definitely required here!

About the Elop prediction: Elop, unlike his previous tenures, might have said that he's in it for the long game, but a sudden Microsoft acquisition would certainly give him an excuse to "change his mind". And he'd still get to pocket lots of exit cash.

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Legality?

If this is true, surely there must be some sort of legal investigation..

It must surely be seen that Elop was a plant from M$ to destroy and devalue the company so the assets that they were interested (core mobile phone patents) can be snapped up at a bargain price. It was too predictable from the start and to late to do much about it now :(

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Board

He is not chairman, really makes you wonder what the board of directors is doing.

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Anonymous Coward

Board?

Some ex- and current Nokians have been wondering that for a long time...

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Gates Horns

Ballmerokia

MS obviously figures:

1) That Nokia customers (and Skype users) are a fixed quantity that can be bought and paid for with the almighty dollar, and

2) That people -- customers -- are just a bunch of automatons who will naturally purchase the most heavily-advertised products, and happily hook their wallets up to the Microsoft Milking Machine.

Unfortunately, Microsoft is the most unpopular major company on the planet in mobile, and nearly all companies and governments (and many consumers) are now beginning to look into open source options for servers, desktops, phones and so on. People do not seem to like to be controlled (except for Apple users, but even many of them are beginning to smell something bad about proprietary lock-in...and I think a lot of people use Apple just to avoid Microsoft). So Microsoft can keep spending its last remaining billions in large, desperate chunks on companies that sink under its own titanic corporate bulk. They have lost the battle, and unfortunately are dragging down others with them, while causing loss of good-paying jobs in the process. Too bad that all they care about are the dollars they are hemorrhaging.

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Customers...

The frightening thing is that your second point is actually true in most cases. There are more heavily advertised products that succeed than there are heavily advertised products that fail regardless of how good they actually are.

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Well...

** 1) That Nokia customers (and Skype users) are a fixed quantity that can be bought and paid for with the almighty dollar, and**

-- Outside of those of us who are interested in IT matters, no one cares about "lock in" and which company is felt to be "evil" by drooling morons who think that any corporation run for profit can ever be anything else but... so all in all I think that too many users *are* a fixed quantity. Most of them won't care who owns skype or how their nokia phone works as long as they can do the things they want to do.

** 2) That people -- customers -- are just a bunch of automatons who will naturally purchase the most heavily-advertised products, and happily hook their wallets up to the Microsoft Milking Machine.**

-- Again: The evidence strongly suggests that anyone who believes your 2nd statement is... absolutely correct. The majority of people *are* sheep, sad to say.

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Stop

Absolutely.

"2) That people -- customers -- are just a bunch of automatons who will naturally purchase the most heavily-advertised products, and happily hook their wallets up to the Microsoft Milking Machine."

I have tried to play out the "why do people play games on Xbox and pay to play on Xbox Live" conundrum, and it always comes back to this. The TV told them to... The gaming media told them to (and Microsoft pay the gaming media handsomely)....

If you have unlimited money like Microsoft, you can buy yourself out of ANY hole you want.

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Or maybe people just enjoy the experience?

Why do you think people pay to play WoW etc.?

You're being too paranoid.

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Gold badge

Re: Absolutely.

The Xbox question has a really easy answer; Sony shot themselves in the foot.

Sony marketed the PS3 as some sort of integrated, all round entertainment device thingy, which appeals to certain adults but took a stonking kick in the nuts as a strategy when decent standalone BD player prices dropped significantly lower than the PS3 price (as anyone with half a brain knew they would). The only slight eyebrow-raiser here is that leading the pack stomping on that strategy with good product were, er, Sony's own standalone player division.

MS marketed the Xbox as a games console, which appeals to kids.

There are more adults buying consoles for their kids than for themselves. Who knew?

I was considering buying a PS3, but got told in no uncertain terms that it had to be an Xbox because "everyone else is on it already". Considering their previous addiction to the PS2 and the amount of Sony gaming paraphenalia floating around the house, I knew right then that Sony had dropped a bollock somewhere.......

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PS3

Sony screwed it two ways - they were late with the PS3, and it cost too much. Both due to Sony wanting to push BD.

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Happy

Pleasepleaseplease

Please be true. This would be so awesome.

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Put it this way...

... if you were a handset maker other than Nokia, how much effort would you be putting into your next Win Phone release?

In a way it is like a self fulfilling prophecy or positive feedback loop.

Everyone says handset makers are crazy to put resources into WP7 because Nokia has a 'special relationship' with MS. This means MS has no option but to further back Nokia as the 'leading' handset maker. This distances MS from everybody but Nokia and pushes them closer....

Yeah, it isn't the stupidest thing I've heard this week.

Jack

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Flame

TF for that

Maybe I can get a W7 phone which can actually make telephone calls, rather than this HTC POS.

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Samsung already got their lesson (if they learn)

seek web for "don't buy samsung windows phone" or "don't update". They were hit very badly in tech sites, review sites just because some trendy idiot at MS didn't test update process on actual shipping device rather than simulator.

As we speak about Nokia here, there is a company who provides remote access to real nokia devices. I guess Nokia themselves do that too. MS could ask their new puppet "why you spend all that money to test things on real hardware?" before blindly shipping updates.

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Anonymous Coward

but

they already own them

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Alert

Patents

Nokia is the king in mobile related patents. Worth B$30? Don't know. But, the playing field is going to change for all the rest of the vendors.

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Anonymous Coward

title

With their man inside already doing their bidding why do they need to bother buying it? much cheaper to just let him get on with it.

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Grenade

Why do they need to bother buying it?

Patents. You may not have noticed but the last year has been all out patent war in the mobile space. If WP7 is to stand any chance at all, it needs an arsenal of mobile patents.

Still, this story seems like nothing more than a dodgy rumour.

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FAIL

Mystic Eldar... and about as accurate

Yes, he predicted that Nokia would produce a full range of Windows Phones, but right before the announcement, he also predicted confidently that Nokia WOULDN'T replace Symbian+MeeGo with Windows Phone.

Nowadays, his "predictions" consist of spewing every conceivable outcome as a leak, then crowing after the event about the one that came closest.

These days, he's got a vendetta against Nokia*, and claims to be acting as a "consultant" to Samsung. He's evasive on the issue of whether this "consultancy" carries a charge, but you can be sure that every device review these days carries a reference to the Korean company's equivalent offering.

In fairness to Eldar, at one time he did have good contacts within Nokia, and once upon a time (up to about four years ago), he did very good, detailed and unbiased reviews about a range of phones.

I suppose it's the problem of being an "independent" journalist. You can't afford to do it for free, and sooner or later, someone will pay you for a good word here and there. At least with The Reg, you know that everyone gets paid out of a larger pool of bribes, without knowing where they've come from ;)

Personally, I think there's an outside chance that MS would buy Nokia's smartphone business, but it's hard to see what it gains them. They've already got what they want from the deal: a household-name handset maker exclusively making WP7 devices. What would buying into the €40 device market benefit Microsoft? Unless it's to avoid being flip-flopped by Nokia the way Nokia's developers have been ("Oh, did we say 'exclusively'? sorry, that's old information: this line of Android/Meego devices is the NEW plan...")

*The Eldar/Nokia thing is a long story, and I can't find the article anymore, but appears to have started a couple of years ago when his personal company was passed over by Nokia for some kind of paid partnership/blogging/promotional gig in Russia. The row over the "stolen" hardware last year was just the public culmination of many minor disputes. He's most definitely persona non grata within Nokia these days.

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Black Helicopters

Echoes of Digital?

Seems like the Digital (DEC) story all over again. Market-leading high-tech company loses its way, suffers infighting verging on civil war, gets infiltrated by the worst sort of top-level managers, is sold out to loser(s) / competitor(s) that chiefly want a customer base, and to kill off all the great technology that wasn't invented by them.

With Digital there was the added spice of Kenneth Lay (later of Enron infamy) on the board. I've always wondered whether there was an active conspiracy within the company's board, to destroy the company. We'll probably never know.

And now Nokia treads the same path to oblivion. What a shame.

I'll be hanging on to my fairly ancient Nokia candy-bar phone that I kept as a spare. Like certain DEC microcomputers, I expect it to last for a decent approximation of forever. It was all downhill from there.

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Unhappy

Yep ..... nokia are lost....

This is probably true, the end for Nokia I think was when HTC who have just 10% ! again TEN PERCENT ! of Nokia's employees equalled Nokia's market cap, and then exceeded its profits, their upward trajectory is going one way only. The low end will be gobbled up by the cheap Chinese\indian makers, the high end is HTC\Apple\Sammy\LG\RIM not Nokia. and the mid range has gone.

Me thinks HTC SAMSUNG LG will drop WP7 also due to their low sales in comparison with android, why invest in this exactly ??

Ballmer is getting his ass kicked due to the amount of profit apple is coining in, so thats who they are going to try to be, and with the recent phone 'upgrade' issues they need to make this internal.

Dear God Nokia, what have you done, they are going to have to let go 100,000 people - at least :(

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