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Microsoft's Nokia Deal, Analyzed
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WKash
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WKash,
User Rank: Author
9/4/2013 | 8:11:39 PM
re: Microsoft's Nokia Deal, Analyzed
As former Microsoft mobile exec, Randy Siegel observes elsewhere on this site ( http://twb.io/1eftqBi ): Microsoft's Exchange platform may give Microsoft greater advantage in this deal than some suspect. He notes:

...both Apple and Google realized early on that if they were to meaningfully attack the enterprise market they would need to license and support the Microsoft's Exchange Active Synch (EAS) protocol.

Since EAS is supported or built-in to nearly all devices, Microsoft has an excellent chance of optimizing the Exchange mobile experience for its own products, especially in the management and security areas.
RobMark
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RobMark,
User Rank: Apprentice
9/3/2013 | 7:12:40 PM
re: Microsoft's Nokia Deal, Analyzed
MS got access to a lot of patents as well, but only for 10 years. That was the head scratcher there. Must be Nokia wanted too much money for permanent access to the patents.
RobMark
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RobMark,
User Rank: Apprentice
9/3/2013 | 7:10:25 PM
re: Microsoft's Nokia Deal, Analyzed
"Android is a cheaper and more popular option." Not really, how much does HTC, LG, Samsung, etc. pay Microsoft for each Android license sold? Windows Phone cost them $10. Not much difference. The biggest reason to not do WP is the cost of supporting multiple OS environments. However, since they are already setup to do that, most of the cost is negated. The biggest reason for them to stop making WP devices is if they do not sell. We will have to wait and see on that one, but WP is not going anywhere anytime soon, so more people will buy WP phones because of that and more developers will develop apps as well.
rradina
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rradina,
User Rank: Ninja
9/3/2013 | 5:46:16 PM
re: Microsoft's Nokia Deal, Analyzed
What about Nokia holding on to the feature phone business? This article claims what others don't. Although not clear, even your response implies Microsoft also has the feature phone business.... "...to use the Nokia brand ... on products based on certain feature phone platforms".

Did they split the feature phones with Nokia keeping some and Microsoft acquiring some? Another article claims Nokia cannot make mobile devices until 2016.

I'm still confused about this deal and what type of phone/mobile devices, if any, remain with Nokia and whether or not they have any future in this space.
zman58
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zman58,
User Rank: Strategist
9/3/2013 | 5:27:26 PM
re: Microsoft's Nokia Deal, Analyzed
Ballmer is going out anyway. To him, it is one more roll of the dice to try and set things straight for historical purposes? It looks like an extreme long shot to me. I don't see how this will make much of a difference except the $Billions that Microsoft will be out when it is all said and done.

Down the road when it finally all falls apart and the losses are again tallied, they can claim it was the other guy's decision, not the new current CEO. Businesses like to do that kind of stuff when business goes bad--blame the earlier leadership for bad decisions of the past.

So yea, it is a good time to roll the dice; 7, 11 or doubles! Nothing to lose except some more chump-change. The house is ready and willing to take your money.
zman58
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zman58,
User Rank: Strategist
9/3/2013 | 5:15:04 PM
re: Microsoft's Nokia Deal, Analyzed
Consider also what Google got with the Motorola deal; An impressive group of industry standard mobile communications patents, not to mention the utility patents that Motorola has on their products. A very deep set of patents that put Google in a position of protecting Android and partner Android device manufactures--such as Samsung. That was a great deal for both parties.

...I am not so sure about the Microsoft Nokia deal.
Michael Endler
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Michael Endler,
User Rank: Author
9/3/2013 | 5:01:08 PM
re: Microsoft's Nokia Deal, Analyzed
Investors seem to have mixed feelings on the "new" strategy, which is pretty predictable, considering the big gains and losses the company's absorbed over the last six weeks.

It's 1:00 on Wall Street, and Microsoft's stock is down 5.9%. It was worse a little earlier in the morning but the writing's still on the wall: A
number of investors looked at Microsoft's refortified commitment to
consumers and decided to jump ship. In retrospect, the ValueAct deal's
timing seems intended to allay the concern Microsoft knew investors
would feel when it purchased Nokia. Hard to know if a ~6% drop
qualifies as successful.

Microsoft will face a tough path under Elop or
whomever, but those who support the "one Microsoft" plan have to be
encouraged. The question for enterprise customers, of course, is whether
and when the consumer focus will help IT to be more secure and
productive.
Michael Endler
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Michael Endler,
User Rank: Author
9/3/2013 | 4:43:25 PM
re: Microsoft's Nokia Deal, Analyzed
It's a limited license option. Microsoft can continue to use the Nokia brand on all current products, and, for a limited period, on products based on certain feature phone platforms. It might be advantageous in certain markets, for example, for Microsoft to continue leveraging Nokia's name recognition in certain ways. But no future smartphones will use Nokia branding. The Lumia brand will live on-- but it will be Microsoft Lumia. I'll be curious to see if Microsoft juggles multiple smartphone lines--e.g. if there's Surface-branded smartphones AND a Lumia-branded family, or if the flagship Lumia is the de facto Surface equivalent. In any case, we ran an article a while back that described how Windows Phone fans were beginning to feel a little neglected. They must be pretty excited now.
rradina
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rradina,
User Rank: Ninja
9/3/2013 | 3:37:32 PM
re: Microsoft's Nokia Deal, Analyzed
Another site's article mentions that Microsoft will have the right to use the Nokia name on devices and in turn, Nokia cannot use the name on mobile devices until 2016. That information seems to be at odds with the information in this article. Can someone set the record straight on this? Did I misread this, the other or both articles?
Michael Endler
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Michael Endler,
User Rank: Author
9/3/2013 | 3:16:45 PM
re: Microsoft's Nokia Deal, Analyzed
At least one recent report notes that in certain markets, Windows Phone is the top draw among customers upgrading from feature phones. There's still significant growth potential in this market, so the recent progress is great move for Microsoft. The problem is, the people upgrading from feature phones aren't as likely to be the people who buy into larger ecosystems-- and Microsoft needs Windows Phone to feed the rest of the "one Microsoft" landscape, particularly Windows 8 and, to a lesser extent, Office, Bing, Xbox and the (soon-to-be-renamed) SkyDrive. Higher market share will serve some of these needs, but for others, Microsoft will need high-end customers-- a segment pretty much owned by Samsung and Apple. Microsoft will need to produce devices that show what the company can accomplish with tight hardware-software integration, but it will also need to walk a tightrope in targeting areas for growth. Buying Nokia helps, but there's a lot that still needs to be executed well.
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