back to article That Microsoft-Nokia merger you've been predicting? It's no go

Microsoft's acquisition of Nokia's mobile phone business – the deal you probably assumed would happen sooner or later – has been scuppered before talks were even made public, according to a new report. On Wednesday, the Wall Street Journal wrote that Microsoft has been engaged in "advanced talks" to snap up the Finnish mobile …

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List of things to do after the acquisition

1) Move to Android.

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2) fire Elop

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Anonymous Coward

Market share

Windows phone market share is directly related to what a customer wants. In this case the customer does not want it therefore it has a poor market share.

How thick do you have to be not to see this ?

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Anonymous Coward

Re: Market share

As to buying Nokia why buy now when you can wait a year and get it for a bargain basement price.

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Re: Market share

"why buy now when you can wait a year and get it for a bargain basement price"

Because (as Huawei have indicated) there's other people who may be interested. So if Nokia's results are poor, and the share price falls, then you have a Dutch auction, and waiting for the price to fall low enough enables somebody else to make a deal.

Lots of potential buyers other than Microsoft: Paternt trolls, Private equity, any of the larger Chinese makers who haven't made headway in Western markets (probably about five or six companies in this category in addition to Huawei). Even industrial conglomerates who might want a piece of mobile action.

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why would MS buy now?

Nokia is basically doing everything MS says, taking the risk, burning their cash. MS just needs to wait them out if they want to acquire them. The cost will only go down, barring a miracle.

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Re: why would MS buy now?

You're right. It seems like Nokia saw a wolf in sheep clothing and decided to feed it their own sheep, as if it was wise. Can't really blame Microsoft I guess, Nokia is just too desperate.

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Anonymous Coward

Re: why would MS buy now?

People have short memories. Nokia were in freefall before Elop joined. Unfortunaltely for them they did not realise that Elop is a skydiver and is enjoying the ride down with them. What Nokia shareholders don't realise is that Elop has a parachute for himself but no one else.

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Facepalm

Re: why would MS buy now?

If Nokia fails with Windows Phone, Windows Phone will have failed, and Microsoft will have failed. Why would Microsoft want to add to that misery by buying a worthless phone company for too much money?

No, Microsoft needs Nokia to succeed. Microsoft buying Nokia's handset business will probably not make that handset business more successfull than it is now though.

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Anonymous Coward

Re: why would MS buy now?

Nokia was in free fall before Elop?

It seems the gravity constant must have increased significantly since then.

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Anonymous Coward

Freefall started after Elop

Tomi Ahonen has a detailed analysis of their sales and financials that shows the freefall didn't start until after the 'burning platform' memo. They certainly had trouble with a dated UI and inconsistent behaviourbetween models, but people were still buying them up to the point Elop anounced they were dropping everything and jumping into bed with MS.

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Re: Freefall started after Elop

"Tomi Ahonen has a detailed analysis of their sales and financials that shows the freefall didn't start until after the 'burning platform' memo."

But the damage was done before that. Apple (ptooh!) were defining what a modern smart phone was, and how an app store and ecosystem worked. Nokia brought us dogs like the 5800, and Ovi, with inconsistent user experience and patchy performance. Bright spots like excellent audio, "comes with music" (which could have been a Spotify) and mapping were never properly exploited. They were late to the party on capacitive touchscreens, they persisted with thick candybar formats when thin was the new black, and they never seemed to understand the importance of screen size (so very high dpi for the time on the 5800 screen, but screen diemnsions that were laughable). They persisted with feature phones (ie restricted smartphones) when the margins were to be made offering more expensive phones with higher capabilities. And despite an early lead in credible cameras they were too slow in upping the resolution to supplant compact cameras.

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@ Ledswinger

You aren't familiar with the N8 then.

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Anonymous Coward

Re: why would MS buy now?

"Nokia were in freefall before Elop joined"

I have a great memory and I can read a balance sheet.

You repeating this oft repeated untruth will not make it true, because it is provably wrong.

take the troll somewhere else

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Re: why would MS buy now?

living in nokia land, former nokia enginers pop up here and there, the rumor is from them that Apple pays 25$ per iPhone to Nokia.

You know that settlement they made over Nokia Frand patents. Android was never a good option for Nokia. Nokia needed to differentiate themselves from the bunch. Android was a dead end, what they had to choose from was Meego and Windows Phone. The only options Nokia really had. What they did choose we all know.

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Anonymous Coward

Re: Freefall started after Elop

You are sidestepping the issue here. Clear statistics that the freefall didn't start until after the Burning Platform memo indicate that exclusive adoption of Windows Phone is the major contributing factor to Nokia's current state of affairs.

Nokia had a small but steadily spreading fire to deal with. They threw oil on it.

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Re: @ Jess

"You aren't familiar with the N8 then"

No, because like vast numbers of others I'd jumped ship by then. The N8 was released in Q3 of 2010 so was comparable to the original Galaxy. On many counts the N8 was better, but the Galaxy had a better quality, bigger, higher resolution screen, even though the phones were about the same size. Compared to the Galaxy S2 launched in Q2 2011, the N8 was laughable.

The N8 repeated the 5800 story - functionally it did what it said on the tin; good in so many ways, but not good enough where it counted.

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Re: Freefall started after Elop

Your problem is you are only going off sales figures to indicate the health of the platform - the real problem with Symbian is that it's a highly complex beast - Symbian Nokia uses is just one of many different flavours out there. As they developed it to further suit their needs (or the requests of the network operators) decisions were made with Symbian which meant overhauling it to make it touch friendly was a huge task. Simply put - on Symbian it would take almost 2 years (or longer) to get the OS updated to work with the new handset and multitudes of Nokia Symbian variants were made for particular handsets and led to screen resolution limitiations amongst other things...contrast this to Windows Phone 8 where one OS fits all and so a handset is out the door in less than a year from inception to delivery.

Symbian wasn't dead, but it was on its way. Nokia's inner workings weren't streamlined, differerent divisions did their own things, duplicated workloads, came up with different ways of doing the same things and never worked closely together enough to get their R&D developments incorporated into the OS.

Whether they made the right choice moving to WP is debatable depending who you talk to, but fact is that Symbian was proving too much of a time/cost black hole to try to modernise...the OS had backed itself into a corner with the way it was developed and was very unwieldy to try to tame.

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Re: Freefall started after Elop

I'd take my 5800 over any iphone of the time. The 2007 iphone couldn't even *do* apps - that came later. Of course Symbian wasn't perfect, but then iphones were playing catchup in lots of areas too (back then even copy/paste was yet to be mastered; poor screen resolution until 2010; free satnav didn't come until 6 months ago and we know how well that worked; ios 7 finally brings proper multitasking).

The modern smartphone was defined by many companies, more so than just Apple (who defined it as a phone that couldn't even run apps, and had dial-up speeds slower than feature phones). Consider how the biggest criticisms against WP in these forums are the things that it took IOS ages to do also, and were Symbian had them years earlier.

The damage was done? If the Symbian^1 era 5800 was so bad, I wonder why they were still number one until 2011 (when they were overtaken by Android - and still outselling iphone). (Note, although their market share was falling, sales were increasing - percentage market share isn't a good way to compare over time when you have different sized markets. The Android growth in that period was mainly coming from phones that previously weren't counted as smartphones, and not that Symbian was losing sales overall.)

"They were late to the party on capacitive touchscreens"

Resistive screens are good too - each have their own advantages (resistive work with pens too, and can be used with gloves - we now have capacitive that support these, but this wasn't around in 2008).

"they persisted with thick candybar formats when thin was the new black"

With 4 day battery life on the 5800, that was fine by me. Phones tended to be thicker then.

"and they never seemed to understand the importance of screen size (so very high dpi for the time on the 5800 screen, but screen diemnsions that were laughable)."

Whilst I'd have liked a larger screen, it wasn't until Samsung started pushing larger sizes in 2010 that this changed; Nokia were no more guilty than Apple. Nokia did have higher end models that were 3.5" at that time. Also remember that Nokia were early adopters of 16:9 aspect ratio, which means thinner screens.

"They persisted with feature phones (ie restricted smartphones) when the margins were to be made offering more expensive phones with higher capabilities."

So Apple should stop making ipods? Samsung are in the wrong to make low end phones too?

"And despite an early lead in credible cameras they were too slow in upping the resolution to supplant compact cameras."

41MP not enough for you?

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Re: @ Jess

So your argument boils down to "I preferred a Galaxy S to an N8, therefore Nokia were doomed". Right. The statistics showing tens of millions still buying Symbian a quarter, enough to still outsell all Android phones together, is not relevant.

I liked things that the 5800 had over an iphone, I guess Apple were doomed too then.

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Re: Freefall started after Elop

"Your problem is you are only going off sales figures to indicate the health of the platform"

Yes, that's because this is a debate on when Nokia went into "freefall", presumably referring to sales.

There may well have been other technical or economic reasons why they preferred to switch to WP. However, that doesn't change the point that there was no freefall in Symbian until after it was dropped.

Also I'm not sure what you're referring to buy different versions - which phones ran which different versions of Symbian?

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Anonymous Coward

If anyone wants to buy Nokia they would be better off waiting until they file bankruptcy. This way they save money on the golden parachute for Elop. They also get them at a better price. Let the bidding war begin to the bankruptcy judge as the auctioneer.

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Boffin

That would be a long wait.

Nokia can limp along for a while.

There are some 'crown jewels' that certain fruity companies would want. Map Data and GPS tech is very important in the mobile phone / tablet market place.

If Microsoft becomes a handset manufacturer, you can kill Windows adoption goodbye.

Had Google bought Moto earlier, half of the handset makers would have bailed on Android because Google's phone would always have an advantage.

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Anonymous Coward

I'm guessing you missed the fact that they turned a profit last quarter?

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Re: That would be a long wait.

"Had Google bought Moto earlier, half of the handset makers would have bailed on Android because Google's phone would always have an advantage."

I doubt it. Where else would they have gone? Phone software only seems to be successful if it is built by a software-focused company. When a hardware-focused company tries to do software the results are invariably grim, whether we're talking smart phones of smart TVs.

Add in that Android is free, WP is expensive, and there were no other free phone OSes ar the time. The existence of the Nexus 4 doesn't seem to be putting third party manufacturers off, nor is there a big queue for Firefox or Ubuntu phones?

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Devil

Re: That would be a long wait.

They would have gone to a different OS.

The point is that if Google had introduced Android and then introduced their own handset, other phone manufacturers would have questioned why would they enter a market where Google's phone would have the latest and greatest and they would be a second tier phone.

Google can still do this via Moto Mobility.

They could do it and laugh all the way to the bank...

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Did they say that with a straight face?

What's more, Microsoft was said to be leery of Nokia's weak position in the smartphone market, where it currently trails behind Apple and Samsung (Blackberry, Motorola, ...).

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Re: Did they say that with a straight face?

Nokia are ahead of Apple. It's only when you compare them to just their WP sales that they're behind.

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Anonymous Coward

Don't fire Elop, sue him.

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impressive backflip

I was so disappointed that I would never see if the next Symbian OS up against the Android. I heard some great things about it and thought that it could be some great competition. Would it have the legs to keep up against google? If anyone could then nokia was an interesting bet.

Then when they announced the partnership that pretty much went out the window.

The MS OS is quite good, but its reputation with the Windows phone OS was really always going to put it on a back foot.

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Linux

Maemo

Personally, I think the best thing Nokia could do is resurrect their brilliant Debian-based phone OS Maemo.

There's still a huge community surrounding the n900, despite it being nearly 4 years old. It'd be brilliant if Nokia could take that and put it on a modern phone (a Huawei one, perhaps, if Nokia haven't got the cash to be making their own phones anymore)

Despite its age, the n900 is still the most powerful (in terms of things you can make it do) phone I have ever known. (mobile SSH terminal complete with agent, port and X11 forwarding, anyone?)

Absolute brilliance by Nokia, but it was exactly what the trojan horse Elop was (successfully) deployed to assassinate.

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Mushroom

Re: Maemo

Yes, because everyone who owns a smartphone thinks "well, this thing is great, but it'd be much better if I could display an Xterm on it that's running on my desktop."

Give it a rest. Maemo is and always was garbage. Maybe if they'd ever got the next-gen Qt UI up and running it might have amounted to something, but as it was everything about the platform and the hardware they shipped it on sucked.

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WTF?

Re: Maemo

Yeh, hilarious, give it Debian and see the market share slide further.

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Re: Maemo

> I think the best thing Nokia could do is resurrect their brilliant Debian-based phone OS Maemo.

Nokia are in investor in Jolla, which use Maemo's spiritual successor, Sailfish. If it does well, there is always a chance that Nokia will just completely buy Jolla.

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Anonymous Coward

Re: Maemo

Totally agree. Have picked up an S4, but it's no replacement for the N900. I've picked up a second hand one following a problem with my original, and I'll get the old sim card reenabled scrapping the S4 ...

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Time to grow some balls.

Microsoft should have bought Nokia, just as it should have bought Yahoo. Somebody needs to grow some balls over there, or put the bean counters in their place. A company without vision, or risk, goes nowhere.

Time to shake things up -- from the top down.

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C 7

Yes, because...

...the company has such a great success rate with acquisitions under Ballmer. Maybe it could be as successful as Aquantive, or destroy its own revenue stream like Skype. Fantastic. Microsoft can burn up more cash reserves while running a couple once great companies the rest of the way into the ground... What could go wrong?

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Anonymous Coward

Re: Time to grow some balls.

... because nothing says "Vision" louder than the ability to buy up the ideas and work of people who clearly know better than you.

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Coat

Re: The MS takeover of Nokia already happened

I can't believe I'm doing this, but I actually agree with Eadon.

If Nokia had continued to control it's own destiny, then it would not be faring so poorly in the smartphone market. Sure, it might not be doing as great as Android and iOS, but I dare say it would be giving Blackberry a serious run for their money.

By ditching Symbian and going exclusively for WinPhone, they effectively told their loyal customer base (which included me) to go sodomise themselves. If we were going to be forced to learn a brand new mobile OS, most people would look elsewhere and make an informed choice of what to learn, instead of blindly bendnig over and giving two deep coughs for MS.

<- Coat, cos thats what most of Nokia's customer base grabbed before leaving.

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Re: The MS takeover of Nokia already happened

I do not.

Nokia had a nice overview of its 10 topmost markets in its annual income statement. Things were going very well indeed in all of those markets, until 2008 or so. At that time, Nokia's key markets in Europe started to collapse, curiously timed with the introduction of iPhone and later Android. 2009 was worse as key markets outside Europe started to collapse too. There was however still global growth as Nokia was making inroads in some other big countries. But the collapse in the UK, Germany, France, Indonesia continued

By 2010-2011 or so global growth stalled to, the collapse became to big to hide.

Nokia had already lost its "loyal" Symbian OS customer base by then in Western Europe.

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Re: The MS takeover of Nokia already happened @Eadon

Nokia, a cautionary tale to Dell as to what awaits them ...

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Anonymous Coward

Re: The MS takeover of Nokia already happened

Anectodal evidence: I was a Nokia customer from 1998 until 2011. I would have continued to be one had I been able to buy an N9. Elop killed that model and I went elsewhere.

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Anonymous Coward

Re: The MS takeover of Nokia already happened

I was always a Nokia user from ~1997 until the xPress music 5800 (or was it 5900?). I wasn't too happy with my previous nokia, but the 5800 was utter crap, buggy software, it crashed too often, the backup/sync software just didn't work properly and it had a soft as butter resistive touch screen. At that point I went to HTC, now I'm back with a Nokia 820 and I'm fairly impressed.

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