Fun Topic: Microsoft buys Nokia (what's left for RIM?)

(via CNET article)

The news just came out that Microsoft is buying Nokia. Or pretty much all of Nokia. Basically the cellular business and patents, while absorbing 32K employees, about a 1/3 of the current ~100K workforce. This is interesting news as a few weeks ago I was talking about Samsung + Intel's investment in Tizen. It almost seems that to be successful today, you need both write the OS *and* build/sell the hardware, in Apple type of model. RIM and Apple are still the only vendors that exclusively write an OS for their own hardware.

So the articles say that board met over 50 times to discuss the purchase and that it had been in works since Feb 2013 @ MWC. Ironic, because I believe that Microsoft maybe then was trying to lower the cost of buying Nokia, since they marginalized Lumina users by not offering a Windows Phone 8 upgrade. John C Dvorak @ PCMag gave a pretty scathing article that finished with this quote:

"But it is not just as smart. Rolling out Windows Phone 8 and screwing over its only real partner proves that."

Google did purchase Motorola Mobility in August 2012, but said it's intentions weren't to dominate the cellphone market, but rather offer more features faster and cheaper and have more patents to defend itself. This was clearly a campaign to Android ODMs that Google was not abandoning them and that they should keep on pushing Android products. For he most part it has worked because by far the only real Motorola Android device I've seen of significance is the Motorola Xoom which was the first Android Tablet. For me, Android has been mostly a landscape of Samsung and HTC devices, but that may be changed as I discussed here.

Microsoft will likely have to also calm HTC, Samsung and other Windows Phone makers, but I am not sure they will be not so calming as Google. Ina Fried @ All Things Digital wrote this article on the topic.

Many knew something was coming. As I wrote before as reason #4 for creating Tizen, Samsung and HTC are already paying Microsoft for every Android phone they sell, which is big part of the $220 million Microsoft says it's makes in mobile. You can see in my Samsung makes Android, Windows Phone & Bada phones, Windows Phone from IDC only accounts for 2.6% of the 2012Q4 market. Sadly I believe very little of this was from direct Windows Phones licensing.

If Microsoft want to turn things around, they needed to do something, and that's what they did. They bought the biggest Windows Phone ODM and will put their marketing machine behind it. I heard many times that if Windows Phone had Nokia hardware engineering and Microsoft Marketing, it could succeed. We'll see how right (or wrong) they were.

As I said in my 'What happened to Surface RT' article, obvious something went wrong with Microsoft's last foray into mobile hardware. It will be interesting to see what happens now with Nokia. Seems like it's doubling down after Surface RT failed, so we'll see if it's "good money after bad" or it's what saved Microsoft post-Ballmer.

So bottom line, if anyone thought that Microsoft would buy Blackberry, I think they are having second thoughts, as they are about $7 billion poorer and 32K employees larger. With 1/3 more employees (and overhead) and having spent that much capital, Microsoft is really "betting the farm" on mobility. It will need to justify that investment quickly.

Microsoft must see the writing on the wall that you just can't *only* be tops in the desktop/laptop/server O/S and BackOffice/Tools markets. This ZDNet articles says it has some cash-cows, but it must see mobility is where it needs to be 'long term'.

Hope that helps...

Wayne Pau.

p.s. Just random thoughts, but if Samsung is teaming up with Intel with Tizen, Microsoft has purchased Nokia, has already been bought by Google and Apple is doing fine, I'm not sure there are suitors for Blackberry (as a whole). Maybe if an unlikely suitor like Oracle (or even IBM I guess) wants to get into the Mobile market? Dell seems have enough problems and HP/Compaq has had it's own share of issues. Maybe an Asian vendor like HTC, Huawei or ZTE will come up with the cash, as I was surprised when Lenovo purchased the personal computing business from IBM. The only other names out there are really Amazon and Facebook (who already has a pact with HTC, but it's reaper much reward from it...)? It will be interesting... I'll be paying close attention.

Here's Henry Blodgett @ Financial Post's take on the situation. Ironically #5 was bought by #6 on his list.