Microsoft 'paid Nokia $1bn' for WinPho 7 deal
Nokia's jaw-dropping decision to adopt Windows Phone 7 as its handset operating system was juiced by an equally jaw-dropping payout from Microsoft of over $1bn, according to a report citing people with knowledge of the deal. Bloomberg reports that Redmond will ship that $1bn to Espoo, Finland, in support of Nokia's efforts to " …
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i,i,i,i..must follow...
enjoy your iphone...baaa!
(i wonder if you've spent more than 5 mins more with any other device, let alone a WP7, since u joined the 'i' club (presume 'i' is for i[am]sheep?!
surfin'
(also, i imagine there are many manufacturers of surfboard, some i guess, are considered very cool by the surf board community, others probably not so much...)
Short term net win for Nokia?
Although they pay a license per device, sales of windows phone 7 have been so poor that i doubt nokia will ever pay back that $1bn...
Just take the money and run!
The story... It's not true.
It's not even close to true. And it's not new either - it's been floating about since in the days after this trainwreck the market recoiled in horror. It's been "suggested" and "hinted". But the story is that it's a commitment to engage that level of engineering and marketing resources, not to transfer funds. Not the same thing at all.
And considering the scale of this mess, not a good value. Consider that according to El Reg's own reportage the announcement wiped over $17 Billion from Nokia's market value in ONE DAY and it has continued to decline in the month since.
No, not a good deal at all.
Headline should be...
Business with market but no money does deal with business with money but no market.
forecast
Today: "We forecast to do $1bn more this year!".
December 2011: "We met our target and cashed in $1bn more than last year!"
February 2012: "In view of the exceptional performance achieved in 2011, exec will get $50M bonus payouts".
April 2012: "We thank our exec board for their incredible performance and give them a massive (but will deserved) golden handshake as they take retirement".
Cynical? Me? Yeah, maybe just a bit.
$1Bn
That's peanut in the scheme of things.
The whole deal stinks of an MS inside man doing a favour for his buddies back at HQ.
MS will recoup that money back from Nokia in no time, plus a nice patent portfolio.
Selling out employees for a pot of gold
I guess this proves Nokia has the morals of American business.
Dumping all that talent and expertise so they can make the bottom line look better.
Sad end to Nokia as the innovator and leader in the mobile business.
WP7- So good they can't give it away
How much is a WP7 licence? 10 spondulicks? That means Nokia need to sell 100 million WP7 phones for Redmond to break even.
so which anti competition law(s)
Does this bribe fall into?
en.m.wikipedia.org/wiki/Anti-competitive_practices
But we all know Microsoft and Apple are untouchable, the have enough money and power to buy themselves out of any problem.
Makes sense to me!
I loved my first Nokia phone 15 years ago, when the slim little thing would go a whole day without recharge (when a Motorola brick needed two big batteries). It was soo much better than any other phone, and stole the march of 2G digital handsets. In truth Nokia’s advantage was that they designed a phone for Finland’s geography (dropping signal power in black spots), and as a side effect created power efficient phones that would go all day without recharge.
Nokia’s not this great market visionary company; it’s an Engineering company that produced some great products at the right time. Nokia would not have created the iPhone because (as a phone) it is not as good as the ones in the Museum.
Today’s “smart-phone” business is not about “phones”, it is about shiny gadgets that augment facebook & twitter where a big App store with $1 programs (that will be redundant when html5 goes large) is more important than being able to reliably make a phone call.
In glitzy app-world, Nokia is better hibernating for five years.. so the MS deal makes sense..
But You Need Great Engineering Companies as Well!
Nokia was visionary. It saw the smartphone market coming, just didn't execute it on it properly.
I still don't understand how it managed to drop the ball, it had years' on everyone else.
And Nokia CERTAINLY wouldn't have produced the iPhone4. The one with the antenna on the outside which can't make calls under certain conditions - who other than Apple could have made a phone like that?!
RE: But You Need Great Engineering Companies as Well!
"And Nokia CERTAINLY wouldn't have produced the iPhone4."
Dam right, that's why they've ended up in the mess! lol
Corruption
The EU shoudl investigate this sabotage of the european mobile industry by MS. History shows that MS destroys its partners. How is this good for anybody but Microsoft, oh, and the executives that take a slice of the bribe.
Elop was recently on the MS board and still owns copious shares of MS stock. This is a conflict of interests, and attack by MS on Nokia that will destroy the company, and indeed is already doing so. This must be investigated by regulators with teeth.
Not just sabotage of EU industry
It's the Bilderberg club deciding that people shouldn't have an OS that lets them control their own data like MeeGo or Symbian but one where everything must be in the cloud and easily accessible to the world government
Are you suggesting...
...That Skynet was developed by Denis Healey?
Whatever..
...Nokia would/wouldn't have done vis a vis the iPhone is not the point.
Years of experience in the IT world (well over 30 years) and watching the rise of certain companies make me believe that somehow Nokia has just been stitched up most royally.
Perhaps the gruesome details won't become apparent for a while, but a pound to a 32k SIMM says they've been conned...
No different to Apple...
...over 10 years ago, I remember a certain "bribe" from MS to Apple. Apple seem to have done well out of it, and hopefully Nokia will do. That was for far less than $1 billion, IIRC. To be fair, people moaned about that deal too, as they will do now...
The news is hardly a surprise - clearly MS have a lot more to gain from this, as someone trying to break into the market, with Nokia being the number one phone and smartphone company.
And good news about Qt ( http://www.theregister.co.uk/2011/03/07/nokia_qt_bye/ ):
Firstly let's not forget what Nokia have done - most importantly, making Qt open source (before it was some odd license, that wasn't available for free use on Windows IIRC).
They've continued development, supporting desktop platforms, and also adding support for the number one smartphone platform.
But this move is also good news - with the recent Nokia/MS news, they're passing it to another company, rather than letting it drop (of course being open source, someone could always fork it as a last resort...) This potentially opens the way for other mobile ports, to Android, Blackberry - and even Windows, to keep Qt on Nokia. (Even if Nokia had stuck with Symbian/Meego and Qt, it's unlikely they would have developed Qt for other mobile platforms.)
"The Nokia brand (trademark) is worth something, but that will be dealt with by the rise of the OS brands. If I wanted a phone now, I'd look for an Android one, I wouldn't be looking for a particular manufacturer."
Ah, a survey of one anecdote!
Nokia are still the number one company. And they advertise under the name "Nokia" - they've never advertised terms like "Symbian".
Meanwhile, the Iphone is advertised by product - how many people go looking for an "IOS phone"?
Android is a special case, as an OS that runs on many manufacturers' phones, though even there, I'm not sure how many people in the mainstream care about the OS.
"I hope Nokia enjoy there 1 billion as there market share in 5 years will prolly be somewhere around the size of the employees of microsoft plus the employees of nokia."
This is the new "Apple are going bust", which we've been hearing for years since *their* deal with MS. People have been saying it for Nokia for years too, yet they still consistently outsell everyone else.
No different to Apple?
"I remember a certain "bribe" from MS to Apple"
<cough>
Were apple forced to scrap their own software development enmasse and to replace it with selling Microsoft Windows on Macs under a licence per device arrangement?
Did Microsoft gain access to apples patent portfolio?
Did Microsoft simply *give* money to apple, or did they *purchase* a block of non voting shares and then sell them back later?
No, this is nothing like Microsoft and Apple.
Not a member of The Register?
The FUDy shills are out in force today. *sigh*
Well done Nokia Execs
Get paid 1 billion dollars for the right to flog WinPhones then lose 25% of the 30 billion that the company is worth almost overnight.
Wow - I bet the shareholders are tickled pink over that lovely little deal!
Ritual Suicide
Sybase, Novell (twice), and now Nokia ... when will they learn?
How is this news? .. or even rumour
Elop did a stand-up press conference the day after the big announcement. There's video of it on YouTube. Quotes off the top of my head (hey, you don't research, why should I have to..):
Asked a question by a journo: "will there be a net transfer of value from Microsoft to Nokia for this deal. I mean not just licencing discounts, but actual asset value transfers?"
Elop's reply: "Yes, there's a significant transfer. In the billion range. To clarify, that's billion with a 'b'."
So, MS paid Nokia at least $1 bn as part of the deal. Confirmed, at the time, from the horse's mouth.
So, it's not news, cos it's about a month old. And it's hardly rumour, unless there's also a rumour going round that the sky got bright this morning...
Re: How is this news? .. or even rumour
"So, it's not news, cos it's about a month old."
It's news because it isn't about a hand-waving "transfer of value" where everybody can backpedal and claim that no money will actually change hands, and that it's all about support "in kind" or increased opportunities leading to higher revenues, or that Microsoft will lend a division to Nokia to do the work or issue coupons for Windows Phone licences, or whatever "asset value transfers" can be made to mean. It's news because it means that upon closing this deal, an actual cash payment will be made. Which means that Nokia will have to write this up as revenue and/or answer to their shareholders and the market regulators.
Small word that I bet investors are mulling now...
Short.
Nokia drifting on a bobbing, floating, burning oil platform? About €6 now? Short to €3. Make a mint.
As another commentard used to write: "TO TEH MOON!" (SCO)
When I read about the $1Bn, then I knew without doubt Elop's job was Embrace, Enhance, Extinguish.
Even Ollilla endorsed it. He built the bloody company into a worldwide success story to match no other, and now (it seems) he's happy to - in a joint venture, naturally - to have his hand on the 'flush-handle' and watch his child swirl down the pan.
I think I wrote once here "Ollilla come back, all is forgiven!"
Not any more.
Our daughther is ugly
but we'll pay you a billion $ to marry her. Now we hope you bring us many grandchildren!
I'm not sure I can spell "assilimated"...
...but that's what's going on. Its effectively a takeover of Nokia by MSFT. The deal was logical; it allows Nokia to dump all that expensive in-house development and MSFT finally gets a major outlet for their otherwise redundant windows phone stuff.
Know it, Snot
Nokia employees + shareholders can tell they've been rudely 'ass-silly-mated'
Their stone-cold vengeance will be to drag M$ down with them to NoWinFone oblivion.
thats all?
the way i see it ms has just bought nokia, i can only assume the billion went straight to whatever halfwit board members brought in elop. not that i ever liked nokia phones but it will be a shame to see them go.
best billion ms may have ever spent though
Re: That's all?
@Mark2410 best billion ms may have ever spent though
To be money well spent Microsoft would have to see a net benefit from the spend, and they would actually have to spend it. This is more like the "ecosystem" marketing numbers for Windows Phone, where they net spend is $500B, but that includes makers and carriers sharing some of the burden. And it's a five year deal. Since there's likely no phones at all for the first two years of the deal, it's likely there'll be no Nokia to pay for the last two.
But there's no benefit to Microsoft here. They get some phone IP. They know no more what to do with that than my toddler does an arc welder. It may as well be 47 tons of soybean husks.
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